Kingdom of Bhutan: Farm Roads to Support Poor …...Kingdom of Bhutan: Farm Roads to Support Poor...

Grant Implementation Manual

Project Number: 43279 JFPR Number: 9146 BHU March 2012

Kingdom of Bhutan: Farm Roads to Support Poor Farmers’ Livelihoods (Financed by the Japan Fund for Poverty Reduction)

TABLE OF CONTENTS Map Currency Equivalents i Abbreviations, Glossaries and Notes i Grant Processing History ii

APPENDIXES ............................................................................................................................ 3

GRANT PROCESSING HISTORY ............................................................................................. ii

I. GRANT DESCRIPTION .................................................................................................... 1

A. Grant Approval Number and Grant Period ...................................................................... 1

B. Grant Area and Location ................................................................................................ 1

C. Objectives, Outcome and Outputs .................................................................................. 1

D. Innovative Features ........................................................................................................ 1

E. Grant Components ......................................................................................................... 2

II. COST ESTIMATE AND FINANCING PLAN ..................................................................... 7

A. Cost Estimates ............................................................................................................... 7

B. Financing Plan ................................................................................................................ 8

C. Allocation of Grant Proceeds .......................................................................................... 8

D. Reallocation of Grant Proceeds ...................................................................................... 9

III. IMPLEMENTATION ARRANGEMENTS ..........................................................................10

A. National Level ................................................................................................................10

B. Coordination with Dzongkhag, Geog and Communities .................................................10

IV. IMPLEMENTATION SCHEDULE .....................................................................................11

V. PROCUREMENT .............................................................................................................11

A. Planning ........................................................................................................................11

B. Goods and Services ......................................................................................................11

C. Use of Consultants ........................................................................................................12

VI. DISBURSEMENT AND FLOW OF FUNDS ......................................................................12

A. Flow of Funds ................................................................................................................12

B. Grant Withdrawal Application ........................................................................................13

C. Disbursement Procedures .............................................................................................13

D. Use of SOE for Reimbursement and Liquidation ...........................................................15

VII. REPORTING REQUIREMENTS ......................................................................................15

A. Progress Report ............................................................................................................15

B. JFPR Grant Status Report .............................................................................................15

C. Audited Grant Accounts .................................................................................................15

D. Implementation Completion Memorandum (ICM) ..........................................................16

VIII. GRANT MONITORING AND EVALUATION ....................................................................16

A. Contract Awards, Commitments and Disbursement Projections ....................................16

B. Grant Reviews ...............................................................................................................16

C. Monitoring Indicators .....................................................................................................16

IX. MAJOR ASSURANCES ..................................................................................................16

APPENDIXES

1. Design and Monitoring Framework 2. Summary and Detailed Cost Estimates 3. Implementation Schedule 4. Procurement of Goods and Related Services 5. Coordination with Small Scale Capacity Development Technical Assistance for Impact

Evaluation 6. Consulting Services 7. Guidelines for the Preparation of the Progress Report 8. Structure of Quarterly Progress Report 9. Guidelines on Calculating Project Progress 10. Form of JFPR Grant Status Report 11. Summary of ADB’s Audit Requirements 12. JFPR Implementation Completion Memorandum (ICM) 13. List of Publications Relevant to Project Administration

JFPR 9146 BHU : FARM ROADS TO SUPPORT POOR FARMERS’ LIVELIHOODS

Map Not to Scale

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CURRENCY EQUIVALENTS (as of 26 July 2010)

Currency Unit – ngultrum (Nu) Nu1.00 = $0.0212 $1.00 = Nu46.86

ABBREVIATIONS ADB - Asian Development Bank BDFC - Bhutan Development Finance Corporation DADM - Department of Aid and Debt Management DBA - Department of Budget and Accounts DOA - Department of Agriculture DOR - Department of Roads EFRC - environment friendly road construction EMP - environment management plan FY - fiscal year GIM - Grant Implementation Manual GIU - Grant Implementation Unit GNHC - Gross National Happiness Commission IEE - initial environmental examination IFAD - International Fund for Agricultural Development JFPR - Japan Fund for Poverty Reduction JICA - Japan International Cooperation Agency LCS - least-cost selection MDG - Millennium Development Goal MOAF - Ministry of Agriculture and Forests MOF - Ministry of Finance NEC - National Environment Commission NCB - national competitive bidding OCO - Office of Cofinancing Operations, ADB PAR - poverty analysis report RAA - Royal Audit Authority RMA - Royal Monetary Authority RNP - Road Network Project RNR - renewable natural resources SNV - Netherlands Development Organization SSS - single-source selection

GLOSSARIES

dzongkhag - Administration unit of Bhutan, District geog - A group of villages forming an administrative unit (block) under

a dzongkhag (district) in Bhutan

NOTES (i) The fiscal year (FY) of the government and its agencies starts on 1 July and

ends on 30 June of the subsequent calendar year. (ii) In this report, “$” refers to US dollars.

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GRANT PROCESSING HISTORY

1. Issues in Bhutan. Mountainous terrain and consequent geographic isolation of the largely rural population is a major contributor to poverty and underdevelopment in Bhutan. Half the country's population lives more than a half day's walk from the nearest motorable road. Almost 80% of the population lives on subsistence farming on far-flung and isolated villages. Limited access to markets contributes to high marketing costs and deters the commercialization of agriculture. The Poverty Analysis Report (2007)1 indicates that 98% of the poor live in rural Bhutan and that the incidence of rural poverty is about 31% as compared to only 1.7% percent in urban areas. 2. The Tenth Five-Year Plan, 2008-20132 (Tenth Plan), therefore, gives importance to rural and agriculture sectors in its approach to poverty reduction. The Tenth Plan also aims to promote accessibility through the extensive development of farm roads and power tiller tracks3 in rural areas, thus ensuring better access to and from markets and economic and social services, including facilitating the delivery of essential inputs to farmers. The Asian Development Bank (ADB)’s Country Strategy and Program for Bhutan (2006-2010) also recognizes that geographic isolation is a major cause of poverty and underdevelopment in Bhutan. The strategy includes support to the Government in improving rural access, with a focus on reducing the walking time to the nearest road and integrating remote areas and communities into the national transport network. 3. ADB Support to Road Network Improvement. The ADB-funded Road Network Project is being implemented to improve transport efficiency on the trunk road network and expand accessibility in rural areas. The Road Network Project Phase I upgrades the national highway and constructs four feeder roads (secondary roads), mainly in Eastern Bhutan with its higher poverty incidence, but also in the western region. The Royal Government of Bhutan (the Government) requested ADB for grant assistance for rural roads to enable linking of scattered farms to the road network. 4. The Farm Roads to Support Poor Farmers’ Livelihoods Project funded by the Japan Fund for Poverty Reduction (JFPR) grant will provide farm roads connecting remote rural communities and farms to feeder roads being constructed under the ongoing Road Network Project. Improved road access will allow poor rural households that depend upon agriculture to grow larger marketable surpluses and increase their incomes. Farm roads will also enable better access to economic and social services, which usually do not reach these remote and sparsely populated areas. 5. Project Processing. An ADB’s reconnaissance mission visited Bhutan from 11-14 June 2009 to understand the requirement and to explore the possibility of preparing a JFPR grant proposal. A project design mission fielded Bhutan from 1–15 October 2009 to (i) confirm the main focus of the proposed farm roads project through discussions with stakeholders; (ii) reach consensus with the Government on the objectives, scope, implementation arrangements and time-schedule of the proposed project; and (iii) finalize the project design. The mission held discussions with the Department of Agriculture (DOA), including their Engineering Division. The

1 Government of Bhutan, National Statistics Bureau. 2007. Poverty Analysis Report. Thimphu.

2 Government of Bhutan, Gross National Happiness Commission. 2009. Tenth Five Year Plan, 2008–2013. Thimphu. 3 The power tiller track classification has been abolished, and only farm roads will be developed, in accordance with

the 2009 Guidelines for Farm Road Development.

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mission also visited proposed project sites in Trashigang, Mongar4 and Chukha dzongkhags, and held consultations with local government stakeholders and target beneficiaries. Further, the mission coordinated with related externally-assisted projects, as well as to draw upon their experiences. 6. The grant proposal for JFPR funding was approved by the Government of Japan on 31 May 2010 and by the ADB Board on 14 as show in the following table.

Processing History

Sl. NO Milestone Events Date/Period

1 Reconnaissance Mission visited Bhutan 11-14 June, 2009

2 Project Design Mission 1-15 October, 2009

3 Date of Submission of Application 23 November 2009

4 ADB Staff Review Committee Meeting 19 November 2009

5 Government of Japan Approval of JFPR Grant 31 May 2010

6 ADB’s Board Approval 14 July 2010

7 Letter of Agreement Signing and Grant Effectiveness 2 August 2010

4 A farm road in Mongar dzongkhag was one of candidate project sites at appraisal, but was not included in the final

three project sites.

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I. GRANT DESCRIPTION

A. Grant Approval Number and Grant Period 1. The Farm Roads to Support Poor Farmers’ Livelihoods Project (the project) was given a grant approval number of JFPR 9146-BHU. All correspondences between the Asian Development Bank (ADB) and the implementing agency should quote the grant approval number and the project name in the subject before the title of the correspondence. 2. The project became effective on 2 August 2010. The project completion date is 2 August 2013 and the period of utilization of grant proceeds is up to 13 January 2014. B. Grant Area and Location 3. The grant covers the following three selected poor blocks (geogs1) in two districts (dzongkhags). The locations of the project area are indicated in the preceding map.

Table 1: Grant Area

District (Dzongkhag) Blocks (Geog)

Chukha Bongo

Trashigang Kangpara Thrimshing

C. Objectives, Outcome and Outputs 4. The objective of the project is to provide improved and sustainable access to economic and social services in the project area, and so improve livelihoods and reduce poverty for at least 288 households2. 5. The outcome of the project will be improved and sustainable access to economic and social services in the project area. 6. The output will be:

(i) selected priority farm roads developed; (ii) community management and maintenance of these farm roads institutionalized; (iii) small marketing infrastructure for and equipment to the subsistence poor and

vulnerable groups, including women provided; and (iv) skills of beneficiary households improved to enable them to access financial and

technical services to support agricultural marketing.

7. The Design and Monitoring Framework in Appendix 1 summarizes the project objective, outcome, and outputs. D. Innovative Features 8. In addition to providing farm roads to connect remote communities to the road network,

1 A geog is a group of villages forming an administrative unit (block) within a dzongkhag (district) in Bhutan's

decentralized structure of government. 2 As per Baseline Survey 2011

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the JFPR Project is designed to take an innovative approach to support poor farmers’ accessing the opportunities that will become available once the roads are completed, enabling them to increase their incomes from agriculture. The project will assist in group formation, identifying the specific needs of the groups for marketing infrastructure and equipment, and providing the required infrastructure and equipment. The project will thereby help to enhance rural livelihood opportunities. 9. The project is also designed to provide support for sustainable road maintenance by assisting in the formation of road-users’ groups to routinely maintain the farm roads constructed under the project. This will include training beneficiary communities and dzongkhag / geog staff and formulating road-maintenance plans. 10. The project will support the training of Department of Agriculture (DOA) and dzongkhag / geog engineers in survey, design and environment friendly road construction (EFRC) techniques, as well as provide survey equipment and technical guidance for construction supervision and the implementation of environment management plans. This will build capacity of engineering staff to further develop farm roads in these dzongkhags in a sustainable way. E. Grant Components 11. The project has five components:

(i) Component A: Develop Selected Farm Roads (ii) Component B: Institutionalize Community Management and Maintenance of

Farm Roads (iii) Component C: Provide Small Marketing Infrastructure and Equipment for the

Subsistence Poor (iv) Component D: Improve Skills of Poor Farmers to Access Financial and

Technical Services and (v) Component E: Grant Management, Monitoring and Evaluation

1. Component A : Develop Selected Farm Roads

12. The major outputs of this component will be; (i) at least 25 kilometers of farm roads constructed in 2 geogs, (ii) providing survey equipments for each of two dzongkhags, (ii) at least 16 DOA and dzongkag/geog engineers trained in EFRC techniques, and (iv) At least 10 DOA and dzongkhag/ geog engineers trained in detailed survey and design. 13. Farm roads are defined as roads that link farmland areas and villages to an existing road of equal or higher classification to enable the transportation of inputs to the farm and agricultural produce to the market. Originally the project had planned to provide about 40 km of farm roads in three project geogs to connect remote farm lands and communities to feeder roads (secondary roads) which have been or being constructed under the ADB funded Road Network Project. However, after the commencement of the project, the survey, design and construction of the farm road in Kangpara geog was transferred to other available fund. Therefore, the JFPR project will finance the construction of two project farm roads. Temporary alignments of farm roads were studied by dzongkhags/ geogs and the implementing agency before the commencement of the grant. The farm roads length to be constructed was finalized in the course of the project, based on results of detailed survey and design.

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Table 2: Selected Farm Roads

Dzongkhag, Geog

Length of road (km)*

Beneficiary Households (number)**

Remarks

Chukha, Bongo 11 70 The farm roads will link to the feeder road being constructed from Meritshimo to Jungley.

Trashigang, Trimshing

14 168 The farm road will connect to the Trashiyangphu-Phegpari feeder road

Trashigang, Kangpara

- (50) The farm road is constructed by another financial source, while the components B, C and D remain under the project.

Total 25 238 (288)

NOTE: * : Approximate length. **: Households along the proposed road, directly benefited. Households in further villages are indirectly

benefited by walking time being reduced.

14. Farm roads development includes (i) identifying alternative proposed alignments; (ii) marking out proposed alignments in the field; (iii) conducting pre-investment studies (including a geotechnical study, site survey, socioeconomic study, and environmental study) in-house, by geog and dzongkhag staff with technical backstopping by the DOA engineering division; (iv) community consultations to determine the preferred alignment in light of the effect on land belonging to socially vulnerable people; (v) recommending the best option, taking into account technical, social, and environmental factors; (vi) detailed survey and design using consultants, including detailed cost estimates, and preparing drawings and draft tender documents; (vii) preparing initial environmental examinations (IEE) and environmental management plans (EMP); and (viii) construction supervision, mainly by dzongkhag / geog engineers supported by Technical (Rural Roads) Expert. EFRC discourages impinging on environmentally sensitive areas and promotes improved survey and design, proper drainage to avoid storm damage, minimizing slope cutting, and revegetating cut slopes. Evidence suggests that using EFRC increases upfront investment costs but minimizes environmental damage and significantly reduces maintenance costs. This was reflected in the estimated construction cost in the approved grant fund, and should also be reflected in unit costs of the civil works. 15. Given the limited number of engineers in DOA, dzongkhags and geogs, DOA, the implementing agency of the project, will contract out the detailed survey, design, IEE and EMP preparation to consultants, and construction of the roads to contractors. Communities are expected to benefit as hired laborers for construction. 16. To support engineering capacity development, the component will provide (i) survey equipment for each of the two dzongkhags; (ii) training for dzongkhag / geog engineers in detailed survey and design techniques, may be at the College of Science and Technology in Phuentsholing; and (iii) training for DOA and dzongkhag/ geog engineers in EFRC. At present, few engineers and agricultural extension officers have specialized knowledge or expertise in road construction in hilly areas. Training will enable them to contribute to better planning, design, implementation, and supervision of farm road development. 17. Design, construction and maintenance will follow the government’s Guidelines for Farm

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Road Development (May 2009) and the EFRC method institutionalized by the Department of Roads. Maintenance procedures will follow the DOA Farm Road Maintenance Manual (May 2009).

2. Component B : Institutionalize Community Management and Maintenance of Farm Roads 18. The major outputs of this component will be (i) at least 10 staff 3 from each of the two dzongkhags trained in implementing farm road maintenance, (ii) road-user groups established and trained in 3 geogs, (iii) maintenance plans prepared with stakeholder participation, and (iv) community and geog funds mobilized for implementing road maintenance plans.

19. Routine maintenance for farm roads refers to simple activities that need to be attended to frequently. The following are considered routine maintenance: (i) clearing obstructions, including minor slides of less than 5 cubic meters per 20 meters of road; (ii) clearing culverts and other cross-drainage structures; (iii) cleaning structures; (iv) clearing and maintaining side drains; (v) repairing scour checks and drain lining; (vi) collecting, transporting, and stocking material for road surface repair; (vii) road surface repair with collected materials; (viii) masonry works; (ix) maintaining carriageway cross-falls and cambers; (x) maintaining shoulder cross-falls; (xi) clearing vegetation; and (xii) bioengineering.4 The work can be done by manual labor, using basic hand tools. No special skills are required, and all materials should be readily available. However, although it is simple, it does require proper organization and regular implementation according to a plan. Delayed routine maintenance can quickly fall into serious damage of roads. 20. This component will, in accordance with the Farm Roads Maintenance Manual, assist in forming road-users’ groups from among the direct beneficiaries of the roads, prepare road-maintenance plans, and provide the training needed for routine maintenance. The DOA will, with the support of the Technical (Rural Roads) Expert to be recruited under component E, provide trainers’ training to geog extension staff on farm road maintenance. 21. Social mobilizers could be employed for (i) facilitating the formation of road-users’ groups in each of the three geogs; (ii) organizing workshops, led by geog staff, to orient road-users’ groups on the basic tasks of routinely maintaining farm roads; (iii) assisting in preparing road maintenance plans that will set out the responsibilities and schedules for maintenance; and (iv) helping in identifying the cash and labor resources needed. The budget for the routine maintenance of farm roads and bridges will be allocated to geogs based on DOA norms. As part of preparing maintenance plans, the groups will be assisted in mobilizing funds from the community as well as the geogs and prepare a roster of community-provided labor according to requirements. Where appropriate, communities may consider levying small tolls on road users.

3 Originally 20 participants were anticipated, but the number of participants was reviewed, in consideration of the

actual total number of relevant staff. 4 Government of Bhutan, Ministry of Works and Human Settlement. 2009.

Guidelines on Road Classification System

and Delineation of Construction and Maintenance Responsibilities. Thimphu.

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3. Component C : Provide Small Marketing Infrastructure and Equipment for the Subsistence Poor

22. The major outputs of this component will be (i) at least 6 groups5 of 10–12 members in each group formed, with at least 50% of members being women, in two dzongkhags, and small marketing infrastructure and equipment needs identified, (ii) Identified equipment procured and installed, and (iii) at least three small marketing infrastructure, such as marketing sheds or post harvest structures, constructed. 23. This component will, with the support of social mobilizers/ facilitators, (i) organize users’ groups with a focus on the subsistence poor, including vulnerable groups such as households headed by women in the project area; (ii) help these groups to identify their needs for small marketing infrastructure and equipment; (iii) identify infrastructure locations to be constructed and establish norms for group use of both infrastructure and equipment to be provided under the project; and (iv) construct small infrastructure such as roadside platforms and sheds for marketing, and provide equipment such as chili-drying machines, maize-flaking machines, and power tillers according to the needs identified. To the extent possible, local labor will be employed for small infrastructure works. Power tillers will help groups to transport their produce. This additional group income can go towards maintaining the equipment and infrastructure. 24. The Social Development and Gender Specialist, to be recruited under component E, will provide guidance and support to the social mobilizers/ facilitators, particularly on issues of gender equity and social inclusion. S/he will ensure that the socially weak, including women, are consulted equally with others in setting priorities and that they get equal opportunity in training and using equipment and small marketing infrastructure.

4. Component D : Improve Skills of Poor Farmers to Access Financial and Technical Services

25. The major outputs of this component will be (i) at least one6 workshop organized in each of three geogs to link farmers with financial and technical service providers, traders, and processors, and (ii) seed capital provided for two farmers’ groups in each of three geogs to enable the expansion of agricultural processing and marketing. 26. The Rapid Impact Assessment of Rural Development in Bhutan7 has noted a difference between access to a service and the use of it. Poorer households in particular lack the capacity to take advantage of opportunities offered by road access. This component will provide training and support to communities so that they could be better able to use the new economic opportunities that will become available once road access is improved. Financial and technical services already exist, and the project will enable and empower communities to access them. 27. The project will facilitate interactions with financial institutions like the Bhutan Development Finance Corporation Ltd. (BDFC), government extension staff, and agricultural technology and extension experts, as well as linkage with traders and other private sector players who could be the main buyers of farmers’ marketable surpluses. Social

5 Workshops were originally planned to be held separately for each of three service types. (i.e. financial,

government extension support, and processing and other private business.) However, the plan was reviewed in. 6 Due to difficulty in access where beneficiaries have to walk for many hours to attend a workshop, it was decided

that as far as appropriate similar topics will be combined, instead of holding many small workshops 7 Government of Bhutan, Planning Commission. 2007. The Rapid Impact Assessment of Rural Development in

Bhutan. Thimphu.

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mobilizers/facilitators will work with geog extension staff and organize training workshops to support interaction between farmers and service providers. These workshops will facilitate the marketing of cash crops, and enable group marketing for better prices. It will be ensured that there is no overlap with the activities of other projects, such as the EU funded “Agriculture Sector Support Project”, the World Bank’s “Decentralized Rural Development Project” in Chukha dzongkhag or the “Agriculture, Marketing, and Enterprise Promotion Program” assisted by the International Fund for Agricultural Development, and that the activities are well coordinated with the geog and dzongkhag plans for supporting agriculture. 28. A major program of the Ministry of Agriculture and Forests (MOAF) under the Tenth Plan is “one geog, three products,” developed by extension agents at the geog level based on their understanding of the needs of the communities they support. Geog extension agents will continue to provide regular support to farmers in terms of technology, guidance, and agricultural inputs such as seeds, which will be facilitated by easier access. A higher level of support will be available from the regional centers when required. 29. One of the main weaknesses of agricultural marketing by small farmers in Bhutan is that they take their produce to market individually. Even where groups are formed, they do not have the capital to initiate any substantive group activities. The experience of other development partners and the needs expressed by beneficiaries during stakeholder consultations indicated that some initial capital could jump-start group activities for marketing and processing. This component will provide seed capital for farmers’ groups and cooperatives in each geog to support the expansion of agricultural processing and marketing. It is envisaged that the seed capital will be provided as a grant. However, if baseline surveys and group mobilization show the groups have the capacity to repay the capital, a revolving fund could be considered and modalities (including an exit strategy) worked out accordingly. 30. The Social Development and Gender Specialist, to be recruited under Component E, will provide guidance and support to the social mobilizers/ facilitators, particularly on issues of gender equity and social inclusion. S/he will ensure that the socially weak, including women, get equal opportunity in training and access to services, including seed capital.

5. Component E : Grant Management, Monitoring, and Evaluation

31. The GIU will lead grant management, monitoring and evaluation. Component E will support GIU activities to facilitate appropriate delivery of Components A to D. 32. A Technical (Rural Roads) Expert will be recruited to provide training and guidance to engineering staff. This expert will support as technical backstopping for detailed survey and design, and for construction supervision, to supplement the limited engineering capacity available in the dzongkhags and geogs. The expert will also guide the preparation and implementation of environment management plans, and monitor and guide construction supervision according to EFRC methods. 33. The Social Development and Gender Specialist will ensure the implementation of the gender action plan. The baseline surveys will inform the detailed design and delivery of inputs for Components A, B, C, and D. The baseline and end line surveys will be undertaken to measure project benefits and impacts.

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6. Change in Grant Objectives, Scope or Implementation Arrangements

34. Any deviations from what is stated in the Grant Assistance Report or Grant Implementation Manual require: (i) IA's prior consultation with the ADB's project officer; (ii) IA's official request for changes; and (iii) ADB's approval. The processing in ADB requires sufficient justification as outlined in paras. 35 and 36. 35. Change in Scope or Implementation Arrangements. Changes in scope and implementation arrangements are considered with respect to their impact on the Project. Making changes in scope and implementation arrangements require ADB’s approval. Major changes will require an approval of higher authorities within ADB. A major change materially alters or fundamentally affects the scope and project outcome as approved by the Board. The IA should consult with ADB’s Project Officer prior to making changes in scope or implementation arrangements. 36. Change in Grant Objectives. For significant changes in the grant development objectives, the Government of Japan (GOJ) approval may be required along with ADB’s approval. Amendment of the Letter of Agreement requires clearance from OGC. The IA should consult with ADB’s Project Officer prior to making changes in grant objectives.

II. COST ESTIMATE AND FINANCING PLAN

A. Cost Estimates

37. The total project cost is estimated at $3.329 million equivalent, of which $3.0 million is funded by ADB from JFPR as in the table blow. Costs presented in Appendix 2 were estimated based on locally tendered prices and preliminary quantity estimates. 38. The first cost reallocation approved on 23 August 2010 shifted $30,000 of contingencies to consulting services under Component E as shown in the following tables. The originally approved budget in the Grant Assistant Report for Technical (Rural Roads) Expert under the Consultancy Services of Component E was $ 160,000. However, a review of the cost estimate revealed that the original estimate was not adequate for total cost including out-of-pocket expenses, such as per diem and air fare. To cover the required cost for this position, funds were reallocated from contingencies

Table 3: Project Investment Plan

(a) Original Approved Budget (in Grant Assistance Report)

Component ADB from JFPR Governmenta Communities

b Total (‘000)

Component A 2,509 209 49 2,767

Component B 21 4 2 27

Component C 81 8 0 89

Component D 68 3 22 92

Component E 237 32 0 270

Contingencies 85 0 0 85

TOTAL 3,000 256 73 3,329

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(b) First Reallocation

Component ADB from JFPR Governmenta Communities

b Total (‘000)

Component A 2,509 209 49 2,767

Component B 21 4 2 27

Component C 81 8 0 89

Component D 68 3 22 92

Component E * 267 32 0 * 300

Contingencies * 55 0 0 * 55

TOTAL 3,000 256 72 3,329

Note: a

Land for roads, salaries for government staff, provision of project office, participating in workshops and meetings, etc.

b Mostly in-kind contribution (land for roads, participation in all training and community development, in-kind

labor contribution etc.) * Amount changed after re-allocation Figures are rounded.

Source: Asian Development Bank estimates. B. Financing Plan

39. ADB will finance $3,000,000 on a grant basis through the Japan Fund for Poverty Reduction (JFPR) excluding taxes and duties. The Government contributions are estimated at $256,314 and community in-kind contributions worth at $72,579. The funding from government and communities includes in-kind contribution.

Table 4: Financing Plan

Funding Source Amount ($)

ADB from JFPR 3,000,000

Government 256,314

Other sources (communities) 72,579

Total 3,328,893

Source: Asian Development Bank estimates.

C. Allocation of Grant Proceeds

40. Allocation of the JFPR grant amounting to $3,000,000 is shown in Table 5.

Table 5: Allocation of Grant Proceeds

(a) Original Approved Budget (in Grant Assistance Report)

Components A B C D E Total

Categories ($)

Civil Works

2,410,680

-

30,000 -

-

2,440,680

Equipment and supplies

20,000

1,500

43,000 -

3,000

67,500

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Categories ($)

Training, workshops and public campaigns

30,000

12,000

-

18,000

-

60,000

Consulting Services

48,000

7,500

7,500

7,500

201,250

271,750

Grant Management -

33,000

33,000

Other Inputs: Seed Capital -

42,000

42,000

Contingencies

73,214

613

2,349

1,970

6,924

85,070

Total

2,581,894

21,613

82,849

69,470

244,174

3,000,000

(b) First Reallocation


Categories ($)

Civil Works

2,410,680

-

30,000 - -

2,440,680

Equipment and supplies

20,000

1,500

43,000 -

3,000

67,500 Training, workshops and public campaigns

30,000

12,000

-

18,000 -

60,000

Consulting Services

48,000

7,500

7,500

7,500

*231,250

*301,750

Grant Management -

33,000

33,000

Other Inputs: Seed Capital -

42,000

42,000

Contingencies

*50,138

613

2,349

1,970

*-

*55,070

Total

*2,558,818

21,613

82,849

69,470

*267,250

3,000,000 Note: * Amount changed after re-allocation Source: Asian Development Bank estimates. D. Reallocation of Grant Proceeds 41. As a result of a change in scope or cost overrun, the grant proceeds allocated to one category may experience shortage, and the other categories may have surplus or savings. Any changes in the allocation from what is provided in Table 5(b) require (i) IA’s prior consultation with the ADB’s Project Officer, (ii) IA’s official request through MOF for changes, and (iii) ADB’s approval. The processing in ADB requires sufficient justification. 42. For reallocation up to 30% of the amount of an approved expenditure category or component, or for reallocations involving amounts of less than $20,000, regardless of the percentage of category of expenditure or component, the Project Officer should request approval from the relevant Division Director and provide a copy of the approved memorandum to ADB’s Controller’s Department (CTL), Office of the General Counsel (OGC), and Office of Cofinancing Operations (OCO). 43. Increases or decreases above 30% of the amount for an approved expenditure category

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or component, or dropping or adding new categories or components involving amounts of at least $20,000, require OCO approval. The request, endorsed by the Division Director and the Director General of the Regional Department, should be submitted to Head, OCO using the standard Reallocation Request Form. The Grant Status Report needs to be current and finalized before OCO approves the Reallocation. OCO will furnish copies of its approval to OGC and CTL for their information.

III. IMPLEMENTATION ARRANGEMENTS A. National Level

44. The Department of Agriculture (DOA) , through its Engineering Division, is the grant implementing agency. DOA is responsible for the overall management of the project. Director of DOA, who is Project Director, will represent the Project, and have authority to approve project documents, staff assignments, contracts, and payments. 45. The Grant Implementation Unit (GIU) will be established under DOA and the Project Manager will be appointed. The Project Manager, who leads the GIU, will supervise the day-to-day implementation activities. The Project Manager will coordinate 3 geogs, 2 dzongkhags (districts) administrations, training institutes, Ministry of Finance (MOF), Department of Roads, and other agencies concerned. The Project Manager will be the authorized signatory for the payment and disbursement of the grant fund. The Sr. Accounts Officer will be the co-signatory for the payment and disbursement of the grant fund. The GIU will (i) manage the overall project activities, (ii) prepare the annual work plan and budget, (iii) manage recruitment and procurement issues, (iv) coordinate inputs from the consultants, (v) make necessary arrangements for training and workshops, (vi) maintain project accounts and complete grant financial records for auditing the project, (vii) prepare progress reports, and (viii) maintain communication with ADB. B. Coordination with Dzongkhag, Geog and Communities

46. A participatory approach is an integral part of decentralized planning in Bhutan. Geog communities participate in identifying and prioritizing development requirements. Rural access plans are developed at the geog and dzongkhag level through consultation. Hence, dzongkhag and geog staff have acquired extensive knowledge and experiences of communities. The GIU and consultants will work with dzongkhag / geog staff for implementing and monitoring the Project, including the construction supervision and identification of community needs. Meanwhile, the procurement of services, goods and works will be conducted by the GIU. 47. The project formulation and preparation of this JFPR project also involved consultations with affected communities at each of the proposed project sites. Stakeholder consultations confirmed that a participatory process had been followed in preparing the development needs of each geog. Consultations helped to define the ancillary needs that will be addressed through project Components B, C, and D. These will be further defined through participatory workshops during project implementation.

Table 6: Types of Beneficiaries

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Primary Beneficiaries and Other Affected Groups and Relevant Description

Other Key Stakeholders and Brief Description

The primary beneficiaries of the project will be about 238 (288) rural households in 11 villages that will be served by the project farm roads. People currently have to walk 3–6 hours to reach the nearest road head. The main source of income for these households is agriculture. The project will enable them to increase their incomes through improved access to markets for their products. Households headed by women and other vulnerable groups will benefit from group formation, training, and support for marketing. They will have improved access to health services. Children will benefit as farm roads will make it easier for them to go to school.

Another 250 households in 8 villages will be indirect beneficiaries as their walking time to the nearest road will be reduced. Local government officials will benefit by being able to provide better access to economic and social services for the target population. One of the dzongkhags is in an earthquake-prone area. Forest fires are also a hazard in the area. With farm roads, government departments will be better able to provide emergency relief to remote settlements in the event of a disaster. Engineering and extension staff will benefit from training to enhance their capacity for survey and design, preparing initial environmental examinations, implementing environment management plans, supervising construction, and maintaining roads.

48. The Guidelines for Farm Road Development provide for community consultations in defining the preferred road alignment and obtaining agreement in principle for voluntary land contribution. Restrictions on alignment as imposed by the community members to minimize land contribution are noted, and possible mitigating solutions such as realignment and the provision of retaining walls are considered. Communities may decide to restrict the percentage of land lost by an individual household or the minimum acreage remaining to a single household. The Farm Road Maintenance Manual defines how communities participate in the management and routine maintenance of farm roads. These guidelines and manual should duly be considered during the project implementation.

IV. IMPLEMENTATION SCHEDULE 49. The project is to be implemented over a period of 3 years, including the baseline and end-line surveys that will enable evaluation of the project outputs and outcome. The project is being implemented as per existing GIM. The implementation schedule was reviewed and revised reflecting actual project progress and the latest implementation plan. The revised implementation schedule is provided in Appendix 3.

V. PROCUREMENT

A. Planning 50. The GIU will develop a procurement plan covering the next 18 month period which will be regularly updated by GIU, and recorded in the quarterly progress report. The detailed procurement plan is in Appendix 4. B. Goods and Services

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51. All procurement to be financed from this grant will follow ADB Procurement Guidelines (2010, as amended from time to time). Procurement includes (i) civil works packages for road construction, which is planned as one package per road; (ii) civil works for small marketing infrastructure at the geog level; (iii) survey equipment for the dzongkhag engineering sections; (iv) small processing and marketing equipment for farmers’ groups; (v) vehicle hire for project management; and(vi) workshop materials and supplies. The Project will use four procurement methods, namely, international competitive bidding (ICB), national competitive bidding (NCB), shopping and direct purchase. Details are provided in Appendix 4. The Grant Implementation Unit (GIU) will procure goods and related services in consultation with ADB. C. Use of Consultants 52. A Technical (Rural Roads) Expert (17 person-months) will be recruited as an individual consultant by ADB, to support the GIU on implementing, and monitoring the project with management and technical guidance.. The IA will recruit consultanting firms for (i) detailed survey and design including IEE and EMP, (ii) baseline survey8, (iii) Social Development and Gender Specialist and Social Mobilizers / Facilitators,9 and(iv) end-line survey. The recruitment will be done in accordance with ADB’s Guideline on the Use of Consultants by ADB and its Borrowers (2010, as amended from time to time). Appendix 6 provides outline terms of references.

VI. DISBURSEMENT AND FLOW OF FUNDS 53. All disbursements for eligible expenditures will be made in accordance with ADB’s disbursement guidelines following ADB’s Loan Disbursement Handbook (2007, as amended from time to time). A. Flow of Funds 54. The Department of Public Accounts (DPA) will request ADB to release funds and credit the requested amount in the Royal Government Budget Account Fund maintained by the Royal Monetary Authority (RMA) in Bhutan. When the RMA receives a request for the release of funds from DPA, the RMA will write to the Bank of Bhutan to credit the said amount in the budget account fund of the Department of Budget and Accounts (DBA). The DPA will then write to the DBA to release the funds to the DOA10. These steps will be followed for every release requested. The project accounts will be audited annually, as per government rules, by the Royal Audit Authority (RAA), which (i) is independent of the line agencies, (ii) has adequate knowledge and experience in international accounting practices, and (iii) is acceptable to ADB. 55. Fund flow for the JFPR project is schematically shown in Figure 1.

8 International and national consultants for the ADB’s approved Small-Scale Capacity Development TA for Impact

Evaluation of Selected Projects in South Asia could work for advising and supervising design and implementation of the baseline survey. Social Development and Gender Specialist should work in close coordination with the TA consultants. Appendix 5 describes coordination with the Small-Scale TA.

9 Originally the Social Development and Gender Specialist and Social Mobilizers were planned to be recruited as

individual consultants. However, the recruitment was changed to be through a firm for more effective implementation of activities.

10 The DOA will open an account exclusively for the project, which will receive funds from the DBA.

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Figure 1: Fund Flow Arrangements for JFPR Project

Requests Requests

Requests

Department of Agriculture

(Grant Implementing Agency)

Project Director

Asian Development

Bank

Component A: Develop Selected

Farm Roads

Component B: Institutionalize

Community Management and

Maintenance of Farm Roads

Component C: Provide Small

Marketing Infrastructure and

Equipment for Subsistence Poor

Component D: Improve Skills of

Farmers in Project Area

Contingencies

Component E: Grant Management,

Monitoring and Evaluation

Department of Public

Accounts

Royal Monetary Authority

of Bhutan

Bank of Bhutan

Budget Fund Account of Department

of Budget and Accounts

Grant Implemention Unit

Project Manager

Source: Asian Development Bank estimates.

B. Grant Withdrawal Application

56. For all withdrawals, ADB must receive a withdrawal application in the prescribed form. A withdrawal application is a written request from the recipient to ADB to pay funds against the borrower’s grant account. Instructions for preparing withdrawal applications as well as forms are in ADB’s Loan Disbursement Handbook and can be downloaded from ADB’s website http://www.adb.org/documents/handbooks/loan_disbursement/loan-disbursement-final.pdf. The final application must reach ADB before the grant closing date. 57. Typically, a withdrawal application consists of:

(i) the application itself in letter form; (ii) summary sheet(s) for each category claimed; and (iii) supporting documents, if required.

58. To promote efficiency in processing disbursements and to the extent possible the minimum value of withdrawal application is set at $100,000 equivalent. The IA should consolidate claims and submit withdrawal applications after its amount has exceeded this limit. C. Disbursement Procedures

59. There are three kinds of disbursement procedures which are envisaged to be relevant to the Project, namely, imprest account procedure, reimbursement procedure and direct payment procedure. Each procedure requires different sets of supporting documents.

http://www.adb.org/documents/handbooks/loan_disbursement/loan-disbursement-final.pdf

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60. Imprest Account Procedure. To facilitate disbursements, DPA will establish, immediately after the date of grant effectiveness, an imprest account at RMA. The imprest account will be established, managed, and liquidated in accordance with ADB’s Loan Disbursement Handbook. The statement of expenditures procedure may be used for reimbursing eligible expenditures and liquidating advances from the imprest account for individual payments not exceeding $20,000. The amount to be deposited into the imprest account will be based on 6 months’ estimated expenditures to be financed from the imprest account or 10% of the JFPR grant, whichever is lower. 61. As eligible expenditures are incurred and paid from the imprest account, the recipient requests liquidation/replenishment of the imprest account by submitting a withdrawal application and the applicable summary sheet using the form in (i) Appendix 8 of ADB’s Loan Disbursement Handbook if individual payments exceed $20,000, or (ii) Appendix 22 to 25 of ADB’s Loan Disbursement Handbook for the statement of expenditures (SOE) procedure, if individual payments do not exceed $20,000. The corresponding bank statement and reconciliation statement (see Appendix 30 of ADB’s Loan Disbursement Handbook) should also be submitted with the application. Withdrawal application must be prepared in the currency of the imprest account. 62. As confirmed by the Government of Japan, use of the interest earned on the JFPR imprest account requires ADB's prior approval. Any unutilized interest earned on the JFPR imprest account will be returned to the JFPR account maintained at ADB, upon the completion of the project and before the closing of the account. 63. Reimbursement Procedure. ADB pays from the grant account to the recipient’s account or, in some cases, to the project account for eligible expenditures which have been incurred and paid for by the recipient or the IA out of its budget allocation or its own resources. Supporting documents for reimbursement include:

(i) 2 copies Signed Withdrawal Application (ADB-DRP/RMP, Appendix 5 of ADB’s Loan Disbursement Handbook );

(ii) 2 copies Summary Sheet (AND-DRP-SS, Appendix 8 of ADB’s Loan Disbursement Handbook );

(iii) Supporting documents; (iv) Contract or confirmed purchase order; (v) A copy of the invoice/bill/claim and delivery receipt; and (vi) Evidence or receipt of payment showing the amount paid, the date of receipt, and

the payee. 64. Direct Payment Procedure . ADB pays the designated beneficiary, at the request of the recipient, from the grant funds. Direct payment procedure may be suitable when the level individual payments exceed the capacity of the IA and the imprest account. Supporting documents for direct payment include:

(i) 2 copies Signed Withdrawal Application (ADB-DRP/RMP, Appendix 5 of ADB’s Loan Disbursement Handbook);

(ii) 2 copies Summary Sheet (AND-DRP-SS, Appendix 8 of ADB’s Loan Disbursement Handbook);

(iii) Contractor-confirmed purchase order, indicating amount and due date;

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(iv) For payment of goods: supplier's invoice and the bill of lading or other similar documents; and

(v) For payment of services: consultants’ claim or invoice; (vi) For payment of civil works: claim or invoice from the contractor and a work

progress certified by the project engineer and approved by the authorized representative of the Borrowers

D. Use of SOE for Reimbursement and Liquidation

65. The statement of expenditures (SOE) may be used for reimbursement of eligible expenditures for the Project and to liquidate advances provided into the imprest account, in accordance with ADB's Loan Disbursement Handbook (2007, as amended from time to time) and detailed arrangements agreed upon between the recipient and ADB. Any individual payment to be reimbursed or liquidated under the SOE procedure shall not exceed the equivalent of $20,000. Any individual payment exceeding the equivalent of $20,000 will require supporting documents for the respective procedures, as described in the previous paragraphs.

VII. REPORTING REQUIREMENTS

A. Progress Report

66. The project manager will prepare quarterly, semi-annual and annual progress reports on project implementation, the form and content of which will be approved by the Asian Development Bank (ADB). The Project Director will officially endorse these reports to ADB. Guidelines for preparing the progress report are in Appendices 7 to 9. 67. Suggested timing for submission of reports: (i) April and October of each year (quarterly progress reports) (ii) July of each year (semi-annual progress reports) (iii) January of each year (annual progress reports) B. JFPR Grant Status Report 68. A JFPR grant status report will be attached as an executive summary of each progress report prepared by DOA. After receipt, the JFPR grant status report will be submitted to ADB’s Office of Cofinancing Operations (OCO) by an ADB staff, and OCO will inform the Government of Japan about the progress and issues of the Project on behalf of ADB. Format of a JFPR grant status report is given in Appendix 10. C. Audited Grant Accounts 69. DOA shall (i) maintain or cause to be maintained separate accounts for the JFPR project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied by independent auditors acceptable to ADB; (iii) furnish to ADB as soon as available, but in any event not later than 6 months after the end of the fiscal year (i.e every 31 December of each year), certified copies of such audited accounts and financial statements and the report of the auditors relating thereto, including the auditor's opinion on the use of JFPR funds as well as on the use of the imprest account and statement of expenditures provided under the project, all in the English language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and

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the audit thereof as ADB may from time to time reasonably request. 70. ADB requires timely submission of audited project accounts and financial statements. Non-compliance may cause suspension of grant disbursements. A summary of ADB’s audit requirements is in Appendix 11. D. Implementation Completion Memorandum (ICM) 71. To facilitate post-evaluation of the Project, the IA will provide an implementation completion memorandum to ADB, with the support of the project manager, within 3 months of physical completion of the Project. The guides and format are in Appendix 12.

VIII. GRANT MONITORING AND EVALUATION

A. Contract Awards, Commitments and Disbursement Projections

72. Consistent with the project schedule, the disbursement of the Japan Fund for Poverty Reduction (JFPR) fund is spread over the implementation period, in which the first quarterly report details the corresponding disbursement amount for each year. B. Grant Reviews

73. To determine the efficiency and effectiveness on the use of grant, grant reviews will be conducted by the IA and ADB alongside with the project review missions – that is, semi-annually for the first year and annually for the following years. Such reviews will ensure that the grant is used prudently in each stage of the project implementation. C. Monitoring Indicators

74. The monitoring indicators will be comprised of two; (i) component output indicators, and (ii) project benefit indicators (key performance indicators). These indicators have to be mentioned in all the required reports. The project manager will be assisted by consultants in conducting baseline survey, and project monitoring and evaluation. These indicators are summarized in the Design and Monitoring Framework as presented in Appendix 1.

IX. MAJOR ASSURANCES (Excerpts from the Letter of Agreement Signed by MOF on 2 August 2010)

Para 3. The Government shall carry out the JFPR Project with due diligence and efficiency, in accordance with the arrangements described in the Grant Assistance Report, and as provided below.

Para 4. ADB shall administer the JFPR pursuant to an agreement ADB has entered into with the Government of Japan, and as provided in the Grant Assistance Report and as otherwise described below.

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Para 5. The Government shall make available, promptly as needed, the funds, and other resources which are required, in addition to the funds to be provided under the JFPR Assistance (the JFPR Funds), for the carrying out of the JFPR Project.

Para 6. Except as ADB may otherwise agree, the Government shall apply the JFPR Funds and any interest or the income earned on the imprest account to the financing of expenditures specified in the Grant Assistance Report.

Para 7. Except as ADB may otherwise agree, the Government shall ensure all goods, services and other items of expenditure financed out of the JFPR Funds are used exclusively in the carrying out of the JFPR Project.

Para 8. The procurement of any goods and services (excluding consulting services) financed under the JFPR Assistance shall be carried out in accordance with the ADB Procurement Guidelines (2010, as amended from time to time). The engagement of any consulting services financed under the JFPR Assistance shall be carried out in accordance with the Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers (2010, as amended from time to time).

(a.) Consultants engaged by ADB (hereinafter called "Consultants") shall have the status of experts performing missions for ADB and shall be entitled to the privileges, exemptions, and immunities conferred upon such experts by the provisions of the Agreement Establishing the Asian Development Bank. Without limiting the generality of those provisions,

(i) the Consultants shall be immune from legal process with respect to all acts performed by them in their capacity as Consultants in connection with the JFPR Project for which they were retained, except where ADB shall otherwise agree;

(ii) the Consultants and their families (if they are not citizens or nationals of the Kingdom of Bhutan) shall be exempt from immigration restrictions, alien-registration requirements and national service obligations of the Kingdom of Bhutan; and

(iii) the Consultants may bring into the Kingdom of Bhutan reasonable amounts of foreign currency for the purposes of the JFPR Project or for their personal use and may withdraw from the Kingdom of Bhutan similar amounts of foreign currency together with any amounts earned therein by the Consultants in connection with the JFPR Project.

(b.) The Government shall promptly:

(i) provide the Consultants and their families with any entry and exit visas, residence permits, foreign exchange permits and travel documents required for their stay in the Kingdom of Bhutan;

(ii) provide the Consultants with work permits and any other documents necessary to enable them to perform their work on the JFPR Project for which they were retained; and

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(iii) clear through customs any equipment, materials or supplies required for the JFPR Project, and any personal effects (including any automobiles if required) and household goods of the Consultants and their families.

(c.) The Government shall exempt Consultants from, or bear the cost of, any taxes, duties, fees or other impositions levied under the laws and regulations in effect in the territories of the Kingdom of Bhutan in respect of:

(i) any payments made to the Consultants in connection with the carrying out of the JFPR Project;

(ii) any equipment, vehicles, materials and supplies brought into the territories of the Kingdom of Bhutan for the purpose of carrying out the JFPR Project which will be consumed therein or withdrawn therefrom or which will become the property of the Government; and

(iii) any personal effects (including automobiles if required) of the Consultants and their families brought into the territories of the Kingdom of Bhutan which will be consumed therein or withdrawn therefrom.

(d.) If any of the items referred to in subparagraphs (c) (ii) and (iii) above are, upon completion of the JFPR Project, not to be withdrawn from the Kingdom of Bhutan and not to become the property of the Government, the Government shall allow such items to be disposed of locally in accordance with any applicable Government regulations, or subject to such terms as are agreed upon between the Government and the Consultants. If any such items are financed by ADB under the JFPR Project, they may be transferred by ADB to the Government on terms and conditions satisfactory to the Government and ADB.

Para 9. No local taxes or duties payable by public entities (whether the central government, any local government or any public institution) shall be financed under the JFPR Assistance.

Para 10. The Government shall maintain, or cause to be maintained, records and accounts adequate to identify the goods, services and other items of expenditure financed out of the JFPR Funds, to disclose the use thereof in the JFPR Project, and to record the progress of the JFPR Project (including the cost thereof).

Para 11. (a) The Government shall (i) maintain or cause to be maintained, separate accounts for the JFPR Project; (ii) have such accounts and related financial statements 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 accounts and financial statements and the report of the auditors relating thereto (including the auditors’ opinion on the use of the JFPR Funds, compliance with the financial covenants of this Letter of Agreement, and the operation of any imprest account and the application of any statement of expenditures (SOE) procedure authorized under the JFPR Project), all in the English language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request.

(b) The Government shall enable ADB, upon ADB’s request, to discuss the Government’s financial statements for the JFPR Project from time to time with the

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Government’s auditors, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB.

Para 12. The Government shall enable ADB’s representatives to inspect the JFPR Project, and the goods, services and other items of expenditure financed out of the JFPR Funds, and any relevant records and documents.

Para 13. (a) The JFPR Funds shall not be disbursed by ADB after 13 January 2014, or such other date as ADB may agree.

(b) The Government shall follow, or cause to be followed, procedures acceptable to ADB to facilitate disbursement of the JFPR Funds under the JFPR Project. These provisions shall include detailed arrangements to be agreed upon between the Government and ADB on applications for withdrawal, evidence of authority to sign such applications, evidence to support such applications, and sufficiency of such applications.

(c) In the event that the Government and ADB agree to the establishment of an imprest account under the JFPR Project, the Government shall establish, immediately upon its confirmation of this Letter of Agreement or such later date as ADB may agree, an imprest account at a bank acceptable to ADB. The imprest account shall be established, managed, replenished and liquidated in accordance with ADB’s Loan Disbursement Handbook (January 2007, as amended from time to time), and detailed arrangements agreed upon between the Government and ADB. The initial amount to be deposited into the imprest account shall be US$100,000.

(d) The statement of expenditures (SOE) procedure may be used for reimbursement of eligible expenditures for the JFPR Project and to liquidate advances provided into the imprest account, in accordance with ADB’s Loan Disbursement Handbook (January 2007, as amended from time to time), and detailed arrangements agreed upon between the Government and ADB. Any individual payment to be reimbursed or liquidated under the SOE procedure shall not exceed the equivalent of $20,000, or an amount agreed upon by the Government and ADB.

Para 14. (a) The Government shall furnish, or cause to be furnished, to ADB all such reports and information as ADB shall reasonably request concerning (i) the use of the JFPR Funds; (ii) the goods, services and other items of expenditure financed out of the proceeds of the JFPR Funds; (iii) the JFPR Project; and (iv) any other matters relating to the purposes of the JFPR Assistance.

(b) Without limiting the generality of the foregoing, the Government shall furnish, or cause to be furnished, to ADB quarterly reports, as agreed by ADB, on the carrying out of the JFPR Project. Such reports shall be submitted in such form and detail as ADB shall reasonably request.

(c) Within three months after physical completion of the JFPR Project, the Government shall prepare and furnish to ADB a report, in such form and detail as ADB shall reasonably request, on the accomplishment of the purposes of the JFPR Assistance.

Para 15. The Government shall cooperate with ADB to ensure that the JFPR Project is carried out promptly and effectively, and for this purpose, shall issue appropriate instructions to its officials, agents and representatives.

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Para 16. The Government and ADB shall, from time to time, at the request of either party, exchange views on the JFPR Project, and consult on any reports prepared by consultants or others and the implementation of any recommendation made in those reports.

Para 17. ADB may use any reports prepared by consultants for any purpose which ADB may consider appropriate, and those reports may be made public unless otherwise agreed by the Government and ADB.

Para 18. The Government may at any time request ADB in writing to terminate the JFPR Assistance.

Para 19. (a) ADB may at any time suspend or, after consultation with the Government, terminate the JFPR Assistance if any circumstances arise which, in the opinion of ADB, interfere or threaten to interfere with the successful implementation of the JFPR Project, the accomplishment of its purposes, or the execution of the JFPR Project in accordance with the terms and conditions of this Letter of Agreement.

(b) ADB may cancel the JFPR Assistance if implementation of the JFPR Project and related disbursements do not start within six months after the execution of this Letter of Agreement.

(c) ADB may cancel the JFPR Assistance if any ADB loan operations related to the JFPR Project are cancelled.

(d) If at any time ADB determines, (i) after consultation with the Government and the Department of Agriculture, that any amount of the JFPR Assistance will not be required for the purposes of the JFPR Project, or (ii) that corrupt, fraudulent, collusive or coercive practices, as determined by ADB, were engaged in by representatives of the Government, the Department of Agriculture or any beneficiary under the JFPR Project during the implementation of the JFPR Project or as part of the procurement or consultant selection, or the execution of a related contract, for the JFPR Project, without the Government having taken timely and appropriate action satisfactory to ADB to remedy the situation, or (iii) that the procurement of any goods and services, and recruitment of consultants to be financed out of the JFPR Assistance is inconsistent with the procedures set forth or referred to in this Letter of Agreement including the Annex, ADB may by notice to the Government terminate the right of the Government to make withdrawals from the JFPR Assistance. Upon the giving of such notice, the JFPR Assistance or the relevant portion thereof may be cancelled by ADB.

Para 20. Upon completion of the JFPR Project, (i) any equipment financed under the JFPR Funds may be transferred by ADB to the Government or any agency designated by the Government on terms and conditions satisfactory to the Government and ADB, and (ii) any remaining balance in the imprest account, including interest of the income earned thereon will be returned to ADB.

Appendix 1 1

REVISED DESIGN AND MONITORING FRAMEWORK

Design Summary

Performance Targets/Indicators

Data Sources/Reporting

Mechanisms

Assumptions and Risks

Impact Increased incomes of rural population in project area

Poverty incidence of rural population in 2013 reduced from 30% in 2007 baseline to 20% in 2013. Proportion of households suffering hunger reduced to less than 3% by 2013 from 5.9%.

Population and housing census Relevant government survey and census Government Progress Reports on Millennium Development Goals

Assumptions Farmers will produce greater marketable surplus. Market demand exists.

Outcome Improved and sustainable access to economic and social services in 3 geogs

Proportion of population in project area living more than 1 hour's walk from a road reduced to 20% or less. Average time taken to reach nearest basic health unit reduced from one hour to 30 minutes Average time taken to reach the nearest school reduced from one hour to 30 minutes At least 50% of the female adult population in the geogs are organized into women’s collectives to increase their access to economic and social services.

Baseline and end-line survey reports

Assumptions Roads will be well maintained. Risk Roads are damaged by unexpected scale of natural disasters.

Outputs 1. Selected farm

roads developed

At least 25 km of farm roads constructed in 2 geogs by end of year 3. At least 16 DOA and dzongkhag engineers trained in EFRC techniques. Survey equipment procured, one set for each of 2 dzongkhags.

Project monitoring reports Project review missions

Assumptions The supply of local construction contractors is sufficient. Engineering capacity is sufficient to undertake timely contracting for civil works. Risk Fragile ecosystems will be damaged.

2 Appendix 1

Design Summary



Mechanisms


At least 10 DOA and dzongkhag engineers trained in survey & design.

2. Community management and maintenance of farm roads institutionalized

Road user groups established and trained in 3 geogs. At least 10 staff trained in implementing farm road maintenance procedures in each of 2 dzongkhags.

Maintenance plans developed in each of 3 geogs, including sources of funding, and agreed between geogs and beneficiaries.


Assumptions Sufficient funding for road maintenance can be mobilized.

3. Small marketing infrastructure and equipment provided for the subsistence-level poor

At least 6 groups of 10-12 members in each group formed in 2 dzongkhags, and their infrastructure and equipment needs identified. At least 3 marketing sheds or other post harvest structures constructed. At least 3 power tillers or farm machines and 12 items of processing equipment procured and provided to groups by end of year 3. At least 50% of beneficiaries of this output are women.


Assumptions Government land is available at sites identified for marketing infrastructure. Groups are able to operate and maintain small marketing infrastructure and equipment.

4. Improved skills allow farmers in project area to access financial and technical services

At least 1 workshop organized in each geog in year 3 to link farmers with technical service providers, financial service providers, and processors/ traders. At least 50% of beneficiaries of this output are women. Seed capital provided for 2


Appendix 1 3

Design Summary



Mechanisms


farmers’ groups in each geog in year 3 to enable expansion of agricultural processing and marketing.

5. Grant management, monitoring, and evaluation

Project staff and consultants recruited and mobilized in months 1–3 and 32. Gender training provided to all project staff. Detailed implementation schedules developed in months 1–2. Project activities completed. as scheduled


Assumptions Pre-project activities are completed in a timely way. Consulting services are recruited in a timely way.

Activities with Milestones 1.1 Recruit consultants for survey and detailed design, and for IEE and EMP

(months 4-8). 1.2 Complete detailed survey and design of selected farm roads (month 14). 1.3 Complete IEE and EMP and obtain clearances for road construction

(months 17). 1.4 Tender for and award construction contracts (months 15-17). 1.5 Procure survey equipment for dzongkhags (months 3-4). 1.6 Train DOA and dzongkhag engineers in EFRC techniques (month 19). 1.7 Train DOA and dzongkhag engineers in survey and design (month 6). 1.8 Construct farm road (Chukha, Bongo) (months 17–33). 1.9 Construct farm road (Trashigang, Thrimshing) (months 18–36). 2.1 Train dzongkhag/geog staff in implementing guidelines for farm road

maintenance (months 22, 24). 2.2 Establish and orient road-users’ groups (months 23-26). 2.3 Prepare road maintenance plans with stakeholders (months 24-26). 2.4 Mobilize community and geog funds for road maintenance (months 25- ). 3.1 Identify community equipment and infrastructure needs and locations

(months 23–25). 3.2 Organize users’ groups and norms for community-based equipment and

infrastructure (months 25–26). 3.3 Build required marketing infrastructure (months 26-31). 3.4 Procure and install required equipment (months 27–31). 4.1 Conduct workshops and provide training on accessing financial services

(from existing financial service providers like BDFC) (month 27). 4.2 Conduct workshops and provide training on accessing technical services

(from DOA, RNR centers and dzongkhag/geog extension staff) (month 27). 4.3 Organize workshops for interaction of farmers with processors and traders

(month 27). 4.4 Provide seed capital for 6 groups (months 29–30).

Inputs ADB $3,000,000 Government $256,314 Beneficiaries $72,579

4 Appendix 1

Design Summary



Mechanisms


5.1 Establish grant implementation unit (month 1). 5.2 Recruit consultants (months 1–3, 7-12,15-21, 28-32). 5.3 Conduct baseline surveys (months 13-19). 5.4 Supervise construction according to EFRC guidelines (months 17–36). 5.5 Provide periodic accounts and progress and monitoring reports to ADB

(every 6 months). 5.6 Conduct end-line surveys (months 33-35).

ADB = Asian Development Bank, BDFC = Bhutan Development Finance Corporation, DOA = Department of Agriculture, EFRC = environment friendly road construction, EMP = environment management plan, IEE = initial environmental examination, RNR = renewable natural resources.

App

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ix 2 1

Appendix 2 SUMMARY AND DETAILED COST ESTIMATES

Table A2.1: Summary Cost Table (First Reallocation)

Component A

Develop Selected

Farm Roads

Component B

Institutionalize

Community

Management and

Maintenance of Farm

Roads

Component C

Provide Small

Marketing

Infrastructure and

Equipment for

Subsistence-level

Poor

Component D

Improve Skills of

Farmers in Project

Area

Component E

Grant

Management,

Monitoring and

Evaluation

Total

(Input)Percent

1. Civil Works 2,410,680 30,000 2,440,680 81.4

2. Equipment and supplies 20,000 1,500 43,000 3,000 67,500 2.3

3. Training, workshops, seminars, public campaigns 30,000 12,000 18,000 60,000 2.0

4. Consulting services a 48,000 7,500 7,500 7,500 231,250 301,750 10.1

5. Grant management 33,000 33,000 1.1

6. Other inputs: Seed Capital 42,000 42,000 1.4

Subtotal JFPR grant financed 2,508,680 21,000 80,500 67,500 267,250 2,944,930 98.2

7. Contingencies b (0–10% of total estimated grant fund):

Use of Contingencies requires prior approval from ADB.50,138 613 2,349 1,970 0 55,070 1.8

Subtotal JFPR grant financed (including contingencies) 2,558,818 21,613 82,849 69,470 267,250 3,000,000 100.0

Government contribution (land for roads, salaries for government

staff, provision of project office, participation in workshops and

meetings etc.)

208,914 4,000 8,000 3,000 32,400 256,314

Community contributions (mostly in kind): land for roads,

participation in all training and community development; in kind

labor contribution etc.)

48,979 2,000 0 21,600 0 72,579

Total Estimated Costs 2,816,711 27,613 90,849 94,070 299,650 3,328,893

Inputs / Expenditure category

Grant Components

a The first re-allocation increased Consulting services for Component E from $201,250 to $231,250 to cover the required cost for Technical (Rural Roads) Expert.

b The first re-allocation reduced Contingencies from $85,070 to $55,070 (for Component A from $73,214 to $50,138, and for Component E from $6,924 to $0)

ADB = Asian Development Bank, JFPR = Japan Fund for Poverty Reduction. Source: Asian Development Bank estimates.

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Table A2.2: Detailed Cost Estimates (First Reallocation) ($)

Code Supplies and Services Rendered Unit Quantity Cost TOTAL

Units Per Unit US$

AmountMethod of

ProcurementComponent A. Develop selected farm roads Subtotal: 2,766,573 2,508,680 * to be specified 208,914 48,979

in the procurement plan

1.1 Civil works

1.1.1Preparatory work (installing labor camps, opening, running, and restoring

quarries)kilometer 40 281 11,240 11,240

1.1.2 Site clearance (clearing of jungle and felling of trees) kilometer 40 871 34,840 34,840

1.1.3 Earthworks (collection of top soil, excavation of road formation, excavation of

road trenches, transport of loose soil, dressing of dump sites, plantation of

vegetation after dumping)

kilometer 40 22,633 905,320 905,320

1.1.4 Structures (masonry walls, hammer-packed dry stone, etc.) kilometer 40 3,065 122,600 122,600

1.1.5 Concrete (providing and laying plain cement concrete) kilometer 40 19 760 760

1.1.6 Water management structures (drains and causeways) kilometer 40 6,523 260,920 260,920

1.1.7 Barriers (log barriers, boulder barriers, trench barriers) kilometer 40 532 21,280 21,280

1.1.8 EMP implementation kilometer 40 2,000 80,000 80,000

1.1.9 Pavement (preparation of subgrade, laying hammer-dressed stone, sub-base,

stacking binding materials)

kilometer40 24,343 973,720 973,720

1.1.10 Land for roads hectare 23.46 10,440 244,893 0 195,914 48,979

1.2 Equipment and supplies1.2.1 Survey equipment set 2 10,000 20,000 20,000

1.3 Training, workshops, seminars LCS

1.3.1 Training of DOA engineers in EFRC techniques (training costs, site visits, per

diem), duration 10 days

participant 16 1,500 24,000 20,000 4,000

1.3.2 Training of dzongkhag engineers in road survey and design, and EFRC

techniques, (training costs, site visits, per diem), duration 14 days

participant 10 1,250 12,500 10,000 2,500

1.4 Consulting services CQS

1.4.1 Survey and design kilometer 40 1,000 40,000 40,000

1.4.2 Preparing IEE and EMP kilometer 40 200 8,000 8,000

1.5 Management and coordination of this component 1.5.1 Supervision – staff time month 10 500 5,000 0 5,000

1.5.2 Travel and per diem month 10 150 1,500 0 1,500

COSTS CONTRIBUTIONS

CommunitiesGovernmentJFPR

App

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ix 2 3


Units Per Unit US$

AmountMethod of

ProcurementComponent B. Institutionalize community management and maintenance of farm roads Subtotal: 27,000 21,000 * to be specified 4,000 2,000


2.1 Training, workshops, seminars

2.1.1 Workshops to establish and orient road users' groups (estimated 20 per group) group 3 1,000 3,000 1,000 1,000 1,000

2.1.2 Workshops to prepare road maintenance plans (estimated 20 per group) group 3 1,000 3,000 1,000 1,000 1,000

2.1.3 Training for dzongkhag staff in implementing Guidelines for Farm Road-

Maintenance (one program in each of 2 dzongkhags , 20 persons each)

person40 300 12,000 10,000 2,000

2.2 Equipment and supplies2.2.1 Workshop materials number 6 250 1,500 1,500

2.3 Consulting services 2.3.1 Social mobilizers/facilitators person-month 1.5 5,000 7,500 7,500

Component C. Provide small marketing infrastructure and equipment for subsistence-level poor Subtotal: 88,500 80,500 8,000 0

3.1 Civil works

3.1.1 Construction of marketing sheds number 3 12,000 36,000 30,000 6,000

3.2 Equipment and supplies3.2.1 Processing equipment (may include chili dryers, orange pulpers, maize flakers) number 12 2,000 24,000 24,000

3.2.2 Power tillers number 3 3,000 9,000 9,000

3.2.3 Other equipment and supplies (to be decided) lump sum 1 10,000 10,000 10,000

3.3 Consulting services 3.3.1 Social mobilizers/facilitators for group formation and needs assessment person-month 1.5 5,000 7,500 7,500

3.4 Management and coordination of this component 3.4.1 Construction supervision by dzongkhag staff person-month 2 500 1,000 0 1,000

3.4.2 Travel and per diem month 2 500 1,000 0 1,000

Component D. Improve skills of farmers in project area to access services Subtotal: 92,100 67,500 3,000 21,600

4.1 Training, workshops, seminars

4.1.1 Workshops organized with financial institutions (BDFC) (estimated 50 persons

per geog )

geog 3 2,400 7,200 6,000 1,200

4.1.2 Workshops and meetings with extension staff and RNR experts (estimated 50

persons per geog )

geog 3 3,400 10,200 6,000 3,000 1,200

4.1.3 Workshops with traders and processors (private sector) (estimated 50 persons

per geog )

geog 3 2,400 7,200 6,000 1,200

4.2 Consulting services 4.2.1 Social mobilizers/facilitators person-month 1.5 5,000 7,500 7,500

4.3 Other inputs4.3.1 Seed Capital for farmers' groups/cooperatives (2 per geog ) group 6 10,000 60,000 42,000 18,000

COSTS CONTRIBUTIONS

JFPR Government Communities

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Units Per Unit US$

AmountMethod of

Procurement

Component E. Grant management, monitoring, and evaluation a Subtotal: 299,650 267,250 * to be specified 32,400 0


5.1 Equipment and supplies

5.1.1 Training materials (reference materials, guides) geog 3 1,000 3,000 3,000

5.2 Consulting services 5.2.1 Social development and gender specialist (remuneration, travel, per diem) person-month 1.5 7,500 11,250 11,250

5.2.2 Baseline Survey month 1.5 10,000 15,000 15,000

5.2.3 End-line Survey month 1.5 10,000 15,000 15,000

5.2.4 Regional Technical Expert (technical training, supervision) b person-month 17 11,176 190,000 190,000

5.3 Management and coordination of this component 5.3.1 Project Manager person-month 36 500 18,000 0 18,000

5.3.2 Travel and Per diem month 36 150 5,400 0 5,400

5.3.3 Office Space month 36 250 9,000 0 9,000

5.3.4 Operational Costs month 36 500 18,000 18,000

5.3.5 Car rental, driver, fuel for Technical Expert month 15 1,000 15,000 15,000

Components A to E = Subtotal c Subtotal: 3,273,823 2,944,930 256,314 72,579

Contingency (Maximum 10% of total JFPR Contribution) d 55,070 55,070

TOTAL Grant costs Total: 3,328,893 3,000,000 256,314 72,579

COSTS CONTRIBUTIONS

JFPR Government Communities

a The original approved budget in the Grant Assistance Report were; Total $269,650 and JFPR $237,250

b The original approved budget in the Grant Assistance Report were; Total $160,000 ($8,000 x 20 p-m) and JFPR $160,000

c The original approved budget in the Grant Assistance Report were; Total $3,243,823 and JFPR $2,914,930

d The original approved budget in the Grant Assistance Report were; Total $85,070 and JFPR $85,070

BDFC = Bhutan Development Finance Corporation, COS = consultants' qualifications selection, DOA = Department of Agriculture, EFRC = environment friendly road construction, EMP = environment management plan, IEE = initial environmental examination, LCS = least-cost selection, RNR = renewable natural resource, SSS = single-source selection. Source: Asian Development Bank estimates.

28 A

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3

Appendix 3 REVISED IMPLEMENTATION SCHEDULE

YEAR 1 YEAR 2 YEAR 3 Y 4

Tasks 2010 2011 2012 2013

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Preparatory work by the GovernmentDetermine tentative road alignments and

preparatory studies by Dzongkhags and

Geogs supported by DOA

Obtaining signed minitues of understang for

contribution of lands

Component A - Developing Selected Farm RoadsFinalize TOR for Detailed Survey & Design

& EMP

Recruit Consultants for Survey & Design,

and EMP

Detailed survey and design & f inalizing EMP

of selected farm roads

Obtain environment clearance

Tendering for Civil w orks

Farm road construction : Chukha (Jungley-

Bongo- Phatshuma )

Farm road construction : Trashigang

(Phegpari - Thungkhar )Procuring survey equipment for

Dzongkhags

Prepare for training in Envrionment Friendly

Road Construction Techniques

Train DOA and Dzonkhag Engineers in

Environment Friendly Road Construction

Techniques

Train DOA and Dzongkhag Engineers in

Road Survey and Design

Component B: Management and Maintenance of Farm Roads Institutionalized

Prepare standard road maintenance

training module for Farm Road Maintenance

Train Dzongkhag and geog engineers and

agricultural extension off icers in

implementing the Guidelines for Farm Road

Maintenance (trainers' training)

Establish Road User Groups (RUG)

Develop Road Maintenance Plans w ith RUG

Mobilize community and geog funds for

road maintenance

Note : : Monsoon season Original GIM

: Intermittent basis consultants' input Actual/Revised

App

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29

YEAR 1 YEAR 2 YEAR 3 Y 4

Tasks 2010 2011 2012 2013

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Component C: Small marketing infrastructure and facilities provided to farmers Identify at the community level

infrastructure and equipment needs and

locations

Organize user groups and norms for use

of equipment and infrastructure

Design marketing infrastructure

Procuring contractors for the construction

of marketing infrastructure

Construct marketing infrastructures

Procure equipment (chili drying machines,

maize f laking machines, orange pulping

machines etc. based on needs)

Install equipment

Component D: Improved Skills of Farmers in project Area to Access Financial Services

Preparing for w orkshop and training on

accessing f inancial institutions

Workshop and training on accessing

f inancial institutions

Preparing for w orkshop and training on

accessing technical servicesWorkshop and training for farmers on

accessing technical services (DOA, RNR

centers, dzongkhag and geog extension

staff)

Preparing for w orkshops for interaction of

farmers w ith processors and traders

Workshops for interaction of farmers w ith

processors and traders

Select farmer's groups and cooperatives to

receive seed capital

Provide Seed Capital for farmers' groups

and cooperatives

Component E: Project Management

Set up Grant Implementation Unit

Recruit Technical Expert (by ADB)

Draft TOR for Consulting Firm to recruit

Social Dev. / Gender Specialist, Social

Mobilizers/Facilitators Recruit Social Dev./Gender Specialist,

Social Mobilizers/Facilitators (for

Components B, C and D) through

Consulting Firm

Prepare TOR for baseline survey

Recruiting consultant for Base-line survey

Conduct Base-line Survey

Supervise construction and ensure

implementation of EMP

Recruit Consultant for End-line survey

Conduct End-line Survey

Completion of the Project

Consultants' Input p-m

Rural Roads Expert 17.0 p-m 0.8 1 1 1 1 1 1 0.9 1 1.2 1.2 0.8 1.1 1 0.4 1 0.2 0.7 0.7

Soc. Dev. and Gender Expert 1.5p-m

Social Mobilizers/Facilitators (for Components B, C, and D)

Note : : Monsoon season Original GIM

: Intermittent basis consultants' input Actual/Revised

(1.5 person-months)(1.5 person-months x 3 positions)

Appendix 4 1

Appendix 4 Procurement of Goods and Related Services

Procurement Plan 1. Prior to project implementation, the Implementing Agency (IA) shall prepare a procurement plan that will list all packages in value by procurement method and the date by which procurement activity is expected to commence. The plan shall detail the prior review, post review and where applicable, supervision arrangements. The plan shall be updated annually or as needed throughout the duration of the project, and shall be annexed to the Progress Report. The IA shall implement the procurement plan in the manner in which it has been approved by ADB. The updated procurement plan is in Table A4-1. The purpose of the plan is to:

Provide a single point of reference for the procurement oversight and supervision

To create a tool that allows for process and review thresholds to be changed if necessary over the lifetime of a project

Focus the IA on the need to plan and manage procurement

To provide a synopsis of the procurement opportunities to providers of goods, works and consultants service.

Increase levels of transparency 2. If the project includes recruitment of consulting services, the procurement plan should also include the methods for selection of consulting services in accordance with ADB’s Guidelines on the Use of Consultants (2010, as amended from time to time). ADB will disclose the procurement plan to the public along with the approved Grant Implementation Manual. Procurement Methods 3. It is envisaged that the Project is likely to use three procurement methods, namely, national competitive bidding (NCB), shopping and direct purchase.1 As the estimated cost of one of farm road pacakges exceeded the threshold of NCB, the International Competitive Bidding (ICB) was applied this package.

A. National Competitive Bidding 4. National competitive bidding (NCB) is the competitive bidding procedure normally used for public procurement in the country of the borrower, and may be the most appropriate way of procuring goods or works which, by their nature or scope, are unlikely to attract foreign competition. To be acceptable for use in ADB-financed procurement, these procedures shall be reviewed and modified as necessary to assure economy, efficiency, transparency, and broad consistency with the provisions included in Section I of ADB’s Procurement Guidelines. NCB may be the most appropriate method of procurement where foreign bidders are not expected to be interested because (a) the contract values are small, (b) works are scattered geographically or spread over time, (c) works are labor intensive, or (d) the goods or works are available locally at prices below the international market. NCB procedures may also be used where the advantages of ICB are clearly outweighed by the administrative or financial burden involved. 5. Advertising may be limited to the national press or official gazette, or a free and open access website. Bidding documents may be only in a national language of the grant recipient’s

1 Further details can be seen at http://www.adb.org/Documents/Manuals/PAI/PAI-304.pdf

Appendix 4 2

country (or the language used nation-wide in the grant recipient’s country for commercial transactions), and the currency of the country of the grant recipient is generally used for the purposes of bidding and payment. In addition, the bidding documents shall provide clear instructions on how bids should be submitted, how prices should be offered, and the place and time for submission of bids. Adequate response time for preparation and submission of bids shall be provided. The procedures shall provide for adequate competition in order to ensure reasonable prices, and methods used in the evaluation of bids and the award of contracts shall be objective and made known to all bidders in the bidding documents and not be applied arbitrarily. The procedures shall also include public opening of bids, publication of results of evaluation and of the award of contract and provisions for bidders to protest. If foreign firms wish to participate under these circumstances, they shall be allowed to do so. 6. The IA is encouraged to use ADB-approved standard bidding documents for NCB, ideally based on the standard bidding documents for international competitive bidding (ICB).2 This will help ensure high quality and consistency in the documents and will hasten ADB's review. The documents should reflect local procurement requirements but must not contravene the basic principles underlying the Procurement Guidelines. Once prepared and approved, the use of standard bidding documents will be mandatory for all ADB-financed NCB contracts in the DMC (as for ADB-funded ICB contracts).

7. The IA should note that the first draft English language version of the procurement documents for goods and works should be submitted for ADB review and approval regardless of the estimated contract amount. ADB-approved procurement documents should be used as a model for all procurement financed by ADB for the project, and need not be subjected to further review unless specified in the procurement plan, or required under special arrangements. 8. For NCB, ADB will review the bid evaluation report (BER) and award of contract on a post-review basis. The concerned sector division may, however, agree with the IA to conduct prior review of the BER and to give prior approval for contract award. This should, however, be described in the procurement plan. The review arrangements will also be specified in the procurement plan. Similarly, for Shopping, ADB will normally review the award of contract on a post-review basis. 9. The EA must submit copies of the BER and signed contract in English to the concerned sector division or resident mission for post review as soon as possible following contract award (unless prior review is specified in the procurement plan). The IA should be advised that ADB reserves the right to refuse financing for the contract if it is found during post review that the procurement has not been conducted in accordance with the Procurement Guidelines, or other provisions specified in the Letter of Agreement. Requirements for consideration of ADB’s procurement committee apply to local procurement (see with PAI 3.11). The flow chart in Figure A5-1 shows the main steps for procurement under NCB.

B. Shopping 10. Shopping is a procurement method based on comparing price quotations obtained from several suppliers (in the case of goods) or from several contractors (in the case of civil works), with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods or standard specification commodities of small

2 Standard bidding documents for goods and works can be downloaded from

http://www.adb.org/Procurement/prequalification-bid-documents.asp

Appendix 4 3

value, or simple civil works of small value. Requests for quotations shall indicate the description and quantity of the goods or specifications of works, as well as desired delivery (or completion) time and place. Quotations may be submitted by letter, facsimile or by electronic means. The evaluation of quotations shall follow the same principles as of open bidding. The terms of the accepted offer shall be incorporated in a purchase order or brief contract. 11. Shopping is a procurement method based on comparing price quotations obtained from several suppliers (in the case of goods), with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods or standard specification commodities of small value. Requests for quotations shall indicate the description and quantity of the goods or specifications of works, as well as desired delivery (or completion) time and place (a sample format for shopping for goods may be provided by ADB upon request). Quotations may be submitted by letter, facsimile or by electronic means. The evaluation of quotations shall follow the same principles as of open bidding. The terms of the accepted offer shall be incorporated in a purchase order or brief contract. 12. For the Project, the threshold for Shopping is set at = < $100,000. Contracts above the threshold would normally be procured following NCB. C. Direct Purchase (as a part of Shopping Method) 13. For the procurement of items =< $10,000, the EA may purchase the items directly from the supplier. In such cases, ADB should be satisfied that the price paid is reasonable.

Appendix 4 4

Table A4-1: Updated Procurement Plan

Project Information

Country Bhutan

Project Name Farm Roads to Support Poor Farmers’ Livelihoods

TA Reference TA – 9146-BHU

Date of Effectiveness 2 August 2010

Amount US$: 3,000,000

Implementing Agency Department of Agriculture

Approval Date of Original Procurement Plan November 2010

Approval of most recent Procurement Plan November 2011

Publication for Local Advertisements Procurement notices in local newspapers

Period covered by this Plan 18 Months from November 2011

Procurement Thresholds, Goods & Related Services

Procurement Method Estimated Contract Value ($)

International Competitive Bidding (Works) >1,000,000

National Competitive Bidding (Works) =< 1,000,000

Shopping for Works =< 100,000

Shopping for Goods =< 100,000

Direct Purchase (Goods) =< 10,000

List of Contract Packages, Goods, and Consulting Services

Ref. Contract

Description Estimated Cost

(US$) Procurement

Method

Actual/Expected Date of

Advertisement

Prior Review

(Y/N) Comments

Component A.-Develop Selected Farm Roads

1.1 Construction of Farm Roads Phegpari-Thungkhar Farm Road (Trashigang) Jungley- Bongo-Phatshuma Farm Road (Chukha)

1,600,000 (Nu 80,000,000) 870,000 (Nu 43,000,000)

ICB

NCB

Oct 2011

Oct 2011

Y

Y

Awarded

Awarded

1.2.1 Survey Equipment

20,000 Shopping N Multiple Contracts

Appendix 4 5

1.4.1 & 1.4.2

Survey and Design, Preparation of IEE and EMP for the Selected Farm Roads

48,000 (Nu 2,100,000)

CQS

Nov 2010

Y

2 Contracts awarded

Component B.-Institutionalize Community Management and Maintenance of Farm Roads

2.2.1 Workshop Materials

1,500 Direct Purchase

N Multiple Contracts

Component C.-Provide Small Marketing Infrastructure and Equipment for Subsistence-Level Poor

3.1.1 Construction of Marketing Sheds

30,000 Shopping Oct 2012 N 3 Contracts

3.2.1 3.2.2 3.2.3

Processing equipment (chili dryers, orange pulpers, maize flakers) Power Tiller, and other equipment depending on the need of the farmers(TBD)

43,000

Shopping

Oct 2012

N

Multiple Contracts

Component D.-Improve Skills of Farmers in Project Area to Access Services

- - - - - - -

Component E.-Grant Management, Monitoring and Evaluation

5.1.1 Training materials

3,000 Direct Purchase

N Multiple contracts

5.2.1 Recruitment of Consultant for Providing Social Development and Gender Specialist and Social Mobilizers

33,750

CQS

Dec 2011

Y

1 Contract (GIU recruitment in progress)

5.2.2 Baseline Survey 15,000 (Nu 650,000)

CQS March 2011 Y 1 Contract awarded

5.2.3 End-line survey 15,000 CQS/LCS 1 Nov 2012 Y 1 Contract

5.3.4 Operational Cost 18,000 Shopping/ Direct

Purchase

- N Multiple contracts

5.3.5 Car rental, driver, fuel for experts

15,000 Shopping Completed N Multiple contracts

CQS – consultant qualification selection, GIU = Grant Implementation Unit, LCS = least cost selection Note: A Social Development and Gender Specialist, and three Social Mobilizers/ Facilitators were originally planned to be recruited as individuals, but was changed to be recruited through a firm (firms forming a joint venture) with CQS/LCS method.

Appendix 4 6

Figure A4-1 Procurement under National Competitive Bidding

1

Executing Agency ADB Suppliers/

Contractors

Prepare list of goods/ Loan/advance contracting works to bid approved

(For contracts over $0.5M in goods and related services or $1.0M in civil works)

Prepare draft PQ documents 2 Advertise LCB contract packages and bid documents Concurrently with GPN in adb.org

ADB review, first contract only

Advertise locally and issue PQ documents2;

Inform ADB of advertisement

(4 weeks notice to suppliers is Purchase PQ documents acceptable) from EA; submit PQ

application

Evaluate PQ applications and select and/or recommend

prequalified firms 2 EA notifies ADB

of PQ results. 3

EA notification to prequalified

Issue bidding documents to and disqualified firms

prequalified suppliers

(4-week bidding period is acceptable) Purchase bidding documents

and submit bids

Public bid opening; prepare record of public bid opening

Evaluate bids; prepare bid evaluation report; proceed to and or

recommend contract award.3

Prepare Contract Agreement and Return signed contract to EA; send to supplier. Provide performance security

Send at least one English version of ADB post review,

salient features of signed contract if approved, prepare PCSS. 3

to ADB Execute contract

Supervise and monitor contract 1 While NCB procedures are not required to be identical with ADB’s ICB procedures, they must reflect the underlying

principles and not contravene ADB’s Procurement Guidelines. 2

Prequalification is discouraged for NCB. DMCs may have a register of suppliers. The processing mission should ensure that the registration system is acceptable to ADB (e.g., it reflects the underlying principles of ADB’s Procurement Guidelines); and where acceptable, a PQ may not be required.

3 If the prequalifcation or procurement requires prior consideration of the procurement committee, in accordance with

PAI 3.11, the EA must be advised not to notify prequalified firms or award contract prior to the committee’s deliberations and subsequent ADB approval.

Appendix 5

1

Appendix 5 COORDINATION WITH SMALL-SCALE CAPACITY DEVELOPMENT TECHNICAL

ASSISTANCE FOR IMPACT EVALUATION A. Background 1. The baseline and endline surveys will be conducted for assessing impacts of the JFPR Farm Roads to Support Poor Farmers’ Livelihoods Project. Design of the baseline survey, including sampling methodology selection and design of questionnaires, is particularly important for attaining appropriate and reliable impact survey results. 2. The approved ADB’s Small-Scale Capacity Development Technical Assistance (S-CDTA) for Impact Evaluation of Selected Project in South Asia (TA No. 7518-REG) aims to conduct rigorous impact evaluations of up to four projects in South Asia. The TA findings will be instrumental in helping the design and implementation of ADB projects, and in improving development effectiveness more generally. 3. The JFPR Farm Roads to Support Poor Farmers’ Livelihood Project was appointed as one of four selected projects of S-CDRA. Experts employed by ADB for S-CDTA will provide technical guidance to the JFRP Farm Roads Project for designing the baseline survey to ensure the quality of the survey result. C. Coordination between the JFPR Farm Roads Project and S-CDTA 4. Specifically, S-CDTA will provide the following assistances to the JFPR Farm Roads Project. (i) International Impact Evaluation Expert / Team Leader for S-CDTA will advise on

the terms of references, design, methodology, and implementation of the baseline survey of the farm roads project. The advice would cover a sample selection method, contents of questionnaires, capacity of surveyors and data processing method.

(ii) About 2 person-months of National Consultant will support International Impact

Evaluation Expert in finalizing methodology by providing detailed information on socioeconomic condition of project areas as well as potential control area, and ensuring quality assurance of survey data through participating in the training of enumerators, quality checks of survey questionnaires, selective participation in survey conduct, and monitoring of data inputs, under the guidance of International Impact Evaluation Expert / Team Leader.

(iii) S-CDTA will provide small training sessions in the impact survey to staff of the

Implementation Agency of the JFPR Farm Roads Project. 5. The following activities will be conducted under the approved budget of the JFPR Farm Roads Project. (i) The Implementing Agency will employ a consulting firm or institution and will

conduct the baseline survey, with the guidance of International Impact Evaluation Expert / Team Leader and National Consultant for S-CDTA.

Appendix 5 2

(ii) The Implementing Agency will employ a consulting firm or institution and will conduct the endline survey near at the end of the project. The endline survey basically will follow the methodologies established for the baseline survey.

Appendix 6 1

Appendix 6 CONSULTING SERVICES

I. Use of Consultants for the Project

1. The JFPR Farm Roads to Support Poor Farmers’ Livelihoods Project will require the following consultancy services.

i. Rural Roads Expert (international, individual, 17 person-months) ii. Consultancy services for providing Social Development /Gender Specialist and three

Social Mobilizers 1 iii. Detailed survey and design, including initial environmental examination (IEE) and

environmental management plan (EMP) (national, firm or institution) iv. Baseline survey (national, firm or institution) v. Endline survey (national, firm or institution)

2. The outline terms of references for Rural Roads Expert, Consultancy services for providing Social Development/Gender Specialist and Social Mobilizers and detailed survey and design are annexed to this Appendix. Terms of references for detailed survey and design and Environmental Monitoring Plan should be prepared and finalized by the Grant Implementation Unit (GIU) in the course of the project with technical guidance of Rural Roads Expert. An international consultant for ADB’s Small-Scale Capacity Development Technical Assistance (S-CDTA) for Impact Evaluation of Selected Project in South Asia (refer to Appendix 5) will support preparing terms of references for the baseline survey in the course of the project. The endline survey basically will apply the similar terms of references to the one for the baseline survey. 3. ADB will engage a Rural Roads Expert, who will provide technical guidance on all activities related to developing and maintaining farm roads, in accordance with ADB Guidelines on the Use of Consultants (2010, as amended from time to time). Other consulting services will be recruited by the GIU, on the basis of qualifications for the assignment in accordance with ADB Guidelines on the Use of Consultants using ADB’s least-cost selection (LCS) method and/or consultants’ qualifications selection (CQS) method.

II. Specific Requirements for Recruiting Consultants by Executing/Implementing Agencies (EAs/IAs)

4. The ADB’s Project Administration Instruction (PAI)2 No. 2.05 explains the specific procedures for recruiting consulting services that EAs/IAs administer under ADB loan/grant-financed projects. These are summarized below. A. Responsibilities of the EA/IA and ADB 5. PAI 2.01 defines the general responsibilities of the EA/IA and ADB in recruiting consulting services that the EA/IA administers. Specific responsibilities for the EA/IA, ADB staff, and project units follow:

1 Originally the Social Development and Gender Specialist and Social Mobilizers / Facilitators were planned to be

recruited as individual consultants. On request of EA the ADB had approved engagement of these experts through a consulting firm to enable more efficient implementation.

2 Information and instructions dealing with consultant recruitment are covered by PAI Nos. 2.01 to 2.07 and can be

viewed/downloaded from http://www.adb.org/Documents/Manuals/PAI/default.asp. The GIU is encouraged to read these PAIs.

http://www.adb.org/Documents/Manuals/PAI/default.asp

2 Appendix 6

6. The EA/IA

prepares the (i) procurement plan for the entire project under PAI 3.01 (paras 8-11) and 1.05 (para 5); (ii) consultant recruitment plan for each recruitment under PAI 2.03; (iii) related draft terms of reference (TOR); and (iv) cost estimate. PAI 2.03 details these.

undertakes recruitment actions including shortlisting, preparing and issuing requests for proposal (RFP)3 when applicable; evaluating the proposals when proposals are required; and negotiating and signing the contract with the selected consultants. PAI 2.03 details these actions.

supervises and manages the implementation of the consultant contract under PAI 2.06.

7. ADB

assists the EA/IA in preparing the procurement plan, the consultant recruitment plan, draft TOR, and cost estimate. It then incorporates these in the project administration manual or grant implementation manual for loan/grant projects.

reviews the shortlist, draft RFP (when applicable), proposal evaluation report (when applicable), the EA/IA’s recommendation for contract award, and draft negotiated contract, and notifies the EA/IA of ADB’s decisions or comments on these submissions.

assists the EA/IA in managing the implementation of the consultant contract, and reviews and endorses the EA/IA’s submissions on issues related to contract implementation (such as contract variations).

B. Advertising (Consulting Services Recruitment Notice) 8. PAI 2.03 outlines the general requirements for posting a consulting services recruitment notice (CSRN). The EA/IA posts the CSRN in the Business Opportunities section of ADB’s website before shortlisting. For this purpose, the EA/IA sends an e-mail to [email protected], with a copy to the concerned project unit staff, stating all projects under its administration. Once ADB receives this, it pre-registers the EA/IA so that an account may be created for the EA/IA for the CSRN posting. The EA/IA’s user ID and password will be emailed to the EA/IA. The minimum posting time for each CSRN is 30 days for consulting firms and 7 days for individual consultants. The EA/IA may also advertise the requirement in other appropriate media, including a local newspaper or international trade publication. ADB then provides the EA/IA with a standard template for the CSRN that it could follow for the advertisement. C. Consultant’s Expression of Interest 9. To ensure that expressions of interest (EOIs) contain sufficient information to allow EAs/IAs to decide on the shortlisting. EAs/IAs request EOIs using the standard EOI form. The Business Opportunities website has a link to a standard EOI form for loans/grants that firms can download, complete, and send to the EA/IA. The CSRN template also provides for the EA/IA address (preferably including an e-mail address), where consultants can write to obtain a standard EOI form. The standard EOI form may be submitted as hard or electronic copy. By requiring submission of a standard EOI form, the EA/IA can evaluate all consultants for shortlisting using uniform documents containing the same type of information. National

3 RFP can be downloaded from http://www.adb.org/Consulting/all-methods-loan.asp

mailto:[email protected]

http://www.adb.org/Consulting/all-methods-loan.asp

Appendix 6 3

regulations and the EA/IA may require additional information from national firms such as company registration and tax reference numbers to be submitted at the EOI stage. This information can be included as an appendix to the standard EOI form. 10. PAI 2.03 (paras 4-8, 10, 16-17) explains how consultants should prepare EOIs and how they should be evaluated during shortlisting. D. Recruiting Consulting Firms 11. The EA/IA follows the general procedures in PAI 2.03 and the following specific requirements to submit the documents for each major step of the recruitment process for ADB’s review and approval.

a) Preparing Shortlist, RFP and Consultant Recruitment Activities Monitoring Sheet – Submission 1 (Form is given in Appendix 8a for LCS and Appendix 8b for CQS of PAI 2.05)

12. The EA/IA establishes a consultant selection committee (CSC) under PAI 2.01 (para 25) that initiates recruitment as follows:

Generate a long list primarily based on the EOIs received, and prepare the shortlisting criteria.

Prepare a short list following the shortlisting criteria and eligibility requirement in PAI 2.01.

Prepare the narrative technical proposal evaluation criteria or EOI evaluation criteria, if the recruitment is based on Consultants’ Qualifications Selection (CQS).

Prepare an RFP, which would include the datasheet, summary evaluation sheet form, and personnel evaluation sheet form.

Provide the data required for the Consultant Recruitment Activities Monitoring (CRAM) sheet.

13. The EA/IA then e-mails the following documents, usually referred to as “Submission 1”, to ADB (through the project unit) for approval: (i) budget; (ii) long list; (iii) proposed shortlist; (iv) narrative technical proposal evaluation criteria; (v) draft RFP with the data sheet, summary evaluation sheet form, personnel evaluation sheet form, and TOR; (vi) draft contract; and (vii) draft CRAM sheet. The EA/IA uses ADB’s standard submission form (Submission 1) available on ADB’s website or provided by the project unit. The EA/IA submits the standard submission form in MS Word version. This also includes a checklist of documents that the EA/IA completes. This submission applies to all selection methods for recruiting firms; provided that, for CQS, the EOI evaluation criteria will be submitted instead of the narrative technical proposal evaluation criteria; and for single-source selection (SSS), the justification and approval for the use of SSS should be submitted (see PAI 2.02, paras 35-38), excluding proposed shortlist and draft CRAM sheet (as these are not applicable).

b) ADB's Review of the EA/IA’s Submission 1

14. Upon receipt of the EA/IA’s Submission 1, ADB ensures that the EA/IA completed all documents required in the submission form. If the EA/IA has not forwarded them all, ADB asks the EA/IA to submit these. ADB then reviews and sends its comments or approval to the EA.

c) Sending RFP to Consulting Firms

4 Appendix 6

15. After ADB approves the EA/IA’s submission, the EA/IA then sends official copies of the RFP to the shortlisted consultants with a copy to ADB. The shortlisted consultants acknowledge receiving the RFP and any notice from the EA/IA (i.e., extension of proposal deadline submission). The shortlisted consultants also advise the EA/IA if they intend to submit proposals. Shortlisted consultants submit any queries to the EA/IA in writing. The EA/IA sends any answers, information, or amendments to all shortlisted consultants, copied to ADB, without disclosing the source of the query. Any proposed amendment needs ADB’s prior approval. 16. To give shortlisted firms reasonable time to address amendments to the RFP in their proposals, the EA/IA may extend the deadline for submitting proposals, subject to ADB's prior approval.

d) Evaluating Technical Proposals and Preparing Evaluation Report – Submission 2 (Form is given in Appendix 8e for LCS and Appendix 8d for CQS of PAI 2.05)

17. The EA/IA forms a CSC to evaluate technical proposals received following the procedures in PAI 2.03. The CSC prepares minutes of its evaluation meeting and a report of its evaluation, describing the strengths and weaknesses of each proposal. 18. Unless the EA/IA’s procurement plan provides otherwise, the EA/IA e-mails the evaluation report containing the following technical evaluation documents to ADB (through the project unit) for approval: (i) completed summary evaluation sheet, highlighting any proposal that scored less than 750 points out of 1,000; (ii) completed personnel evaluation sheet for each proposal; (iii) narrative comments on the strengths and weaknesses of each proposal; (iv) minutes of the EA/IA's CSC evaluation meeting(s); and (v) updated CRAM sheet. The EA/IA uses ADB’s standard submission form (Submission 2) available on ADB’s website or from the ADB project unit. The EA/IA submits ADB’s standard submission form in MS Word format. This submission applies to all selection methods for recruiting firms; provided that, for CQS and SSS, the technical evaluation documents are submitted together with the financial evaluation documents.

e) ADB's Review of the EA/IA’s Submission 2 19. ADB reviews and sends comments/approval to the EA/IA. However, for CQS and SSS, the review of the EA/IA’s technical evaluation documents occurs with the review of the EA/IA’s financial evaluation documents.

f) Opening and Evaluating the Financial Proposal(s), and Recommending Contract Award – Submission 3 (Form is given in Appendix 8f for LCS for PAI 2.05)

20. Cost-based selections (quality and cost-based selection [QCBS], fixed-budget selection [FBS], and least-cost selection [LCS]) require public opening of the financial proposals. These are opened and evaluated as in PAI 2.03. QBS method requires separate submission of the first ranked firm’s financial proposal, which is submitted and opened as in PAI 2.03. CQS method requires the financial proposal be submitted with the technical proposal, but is only reviewed in preparation for contract negotiations. Such proposal is opened and reviewed as in PAI 2.03. SSS method adopts the same procedure as CQS for submitting, opening, and reviewing the financial proposal. 21. Unless the EA/IA’s procurement plan provides otherwise, the EA/IA e-mails the following financial evaluation documents to ADB (through the project unit) for approval: (i) completed

Appendix 6 5

financial evaluation and overall ranking forms; (ii) narrative comments on the financial evaluation, noting any corrections to the financial proposal(s); and (iii) updated CRAM sheet. The EA/IA uses ADB’s standard submission form (Submission 3) available on ADB’s website or from the ADB project unit. The EA/IA submits ADB’s standard submission form in MS Word format. This submission requirement applies to all selection methods for recruiting firms, except QBS; provided that, for CQS and SSS, the technical evaluation documents are submitted with the financial evaluation documents.

g) ADB's Review of the EA/IA’s Submission 3 22. ADB reviews and sends comments/approval to the EA/IA. However, for CQS and SSS, the EA/IA’s technical evaluation documents are reviewed with the EA/IA’s financial evaluation documents.

h) Preparing for Contract Negotiation

23. Before contract negotiation, the EA/IA checks the eligibility and performance records of each member of the team proposed by the selected firm. ADB assistance is provided if requested by EA/IA. Thereafter, the EA/IA invites the first-ranked consultant to negotiate a contract with the EA/IA, as in PAI 2.03. 24. The selected consultant confirms the availability of its proposed personnel, provides clarifications and corrections to its proposal, and replaces personnel when appropriate, as in PAI 2.03.

i) Submitting the Negotiated, Unsigned Contract – Submission 4 (Form is

given in Appendix 8g of PAI 2.05) 25. The EA/IA negotiates a contract with the first-ranked consultant as in PAI 2.03. When the negotiation is face-to-face, the EA/IA prepares minutes of the important points of agreement. If the EA/IA and the consultant cannot agree, the EA/IA may terminate the current negotiations with ADB’s prior approval, and start negotiations with the next-ranked consultant, and so on until an agreement is reached. 26. Unless the EA/IA’s procurement plan provides otherwise, the EA/IA emails the draft negotiated contract and the minutes of the contract negotiations to ADB (through the project unit) for approval. The EA/IA uses ADB’s standard submission form (Submission 4) available on ADB’s website or from the project unit. The EA/IA submits ADB’s standard submission form in MS Word format. This submission requirement applies to all selection methods for recruiting firms.

j) ADB's Review of the EA/IA’s Submission 4

27. ADB immediately reviews the EA/IA’s submission to (i) ascertain that the negotiated terms and conditions are satisfactory and (ii) require the EA/IA to incorporate any revisions, changes, or amendments that ADB considers necessary. Once the documents are considered in order, ADB formally advises the EA/IA of its’s approval.

k) Finalizing the Contract 28. After receiving ADB’s approval of the draft negotiated contract, the EA/IA signs the contract, obtains the consultant’s signature, and submits a copy of the signed contract to ADB

6 Appendix 6

(through the project unit). The EA/IA also submits the following information to ADB for posting on its website:

names of the shortlisted consultants who submitted proposals;

scores of their technical proposals;

prices in their financial proposals (for QCBS and LCS);

overall ranking (for QCBS);

name of the consultant selected; and

cost, duration, and summary scope of the contract.

29. After receiving the signed contract, the ADB verifies that it is substantially the same as the draft negotiated contract it approved earlier. 30. After completing the selection, the EA/IA debriefs the shortlisted consultants, when so requested by the consultant concerned, regarding how their ranking was determined.

l) Issuing Notice to Proceed 31. The EA/IA then makes the contract effective by sending the consultant a written notice to proceed, copied to ADB (through the project unit). E. Recruiting Individual Consultants

a) Selecting and Approving the Shortlist 32. Before an individual consulting assignment is scheduled to start, the EA/IA prepares a short list of at least three qualified candidates. At the EA/IA’s request, ADB may provide the names and qualifications of suitable candidates from its database of consultants. The EA/IA may also advertise for suitable candidates, in addition to the CSRN posting requirement in para. 8. 33. The EA/IA ranks the candidates and submit their names and qualifications, with the draft contract,4 to ADB for approval (Submission 1)5. ADB

reviews the EA/IA’s submission documents;

approves the EA/IA’s submission or identifies needed revisions, changes, or amendments that are considered necessary;

prepares a note to file summarizing the issues raised and the decisions taken; and

advises the EA/IA of it’s decision.

b) Negotiating the Contract

34. After ADB approves the ranked short list and the draft contract, the EA/IA negotiates with the first-ranked candidate. If the negotiations fail, the EA/IA obtains ADB’s approval to terminate the current negotiations and start negotiations with the next-ranked candidate, and so on until agreement is reached. The EA/IA then sends a copy of the draft negotiated contract to ADB for approval.

c) Reviewing the EA/IA’s Draft Negotiated Contract

4 Sample contract is available at http://www.adb.org/Consulting/ICS-Contract-Loan.pdf

5 Form can be downloaded from http://www.adb.org/Consulting/IC-SUBMISSION-1.doc

http://www.adb.org/Consulting/ICS-Contract-Loan.pdf

http://www.adb.org/Consulting/IC-SUBMISSION-1.doc

Appendix 6 7

35. ADB immediately reviews the EA/IA’s submission to ascertain (i) that the negotiated terms and conditions are satisfactory, or (ii) requires the EA/IA to incorporate any revisions that are considered necessary. 36. Once the documents are considered to be in order, ADB formally advises the EA/IA of it’s approval. d) Finalizing the Contract 37. After receiving the signed contract, ADB checks that it is substantially the same as the draft negotiated contract it approved earlier. F. Monitoring the Consultant Recruitment Process (for Recruiting Firms) 38. The EA/IA and ADB use Consultant Recruitment Activity Monitoring (CRAM) for EA/IA administered consulting services to monitor the activities in consultant recruitment and to avoid delays. A preliminary CRAM schedule for the recruitment based on the anticipated consultant mobilization timetable is included as an annex to the procurement plan. 39. The CRAM schedule identifies the main activities in the recruitment process, the responsible unit, the time normally required for each activity, and the target dates for completing each activity. The EA/IA and ADB complete each activity and monitor the recruitment process. They use CRAM to identify delays and to act promptly to get the recruitment process back on schedule.

a) Creating a CRAM Schedule 40. During the loan/grant fact-finding mission, the ADB officer explains to the EA/IA how to use the CRAM system to monitor the recruitment process. The officer gives the EA/IA a sample CRAM schedule and discusses the consultant recruitment schedule, based on the time standards set for each activity shown in the CRAM system. The officer asks the EA/IA to assign a staff who will be responsible for maintaining the CRAM schedule and monitoring recruitment. 41. When the EA/IA schedules and advises ADB of the date for the CSRN posting, ADB creates a CRAM schedule for the assignment by entering the following information in the system:

loan/grant number and name;

contract budget;

selection method;

type of technical proposal;

EA/IA’s name and contact person;

ADB project division;

ADB project unit officer;

EA/IA and ADB staff responsible for maintaining the CRAM and monitoring recruitment; and

shortlisting date.

42. When ADB enters the CSRN posting date into the CRAM schedule, the system automatically generates a recruitment schedule, including the planned dates for each activity and the cumulative number of days from shortlisting. The number of calendar days required for each activity is based on “norms” for each selection method and type of technical proposal.

8 Appendix 6

b) Accessing the CRAM system 43. ADB responsible staff may access the CRAM system in ADB’s Consulting Services Reference database in Lotus Notes. c) Monitoring the Recruitment Activities and Updating the CRAM Schedule

44. ADB sends a copy of the preliminary CRAM schedule for the assignment to the EA/IA. The EA/IA’s CSC shortlisting meeting then discusses and confirms the CRAM schedule. If the EA/IA is required to submit its CSC meeting documents to ADB for approval, the EA/IA includes this in the CRAM. 45. If ADB approves the EA/IA’s submissions (depending on the selection method), it sends the EA/IA an updated CRAM schedule. 46. The EA/IA staff monitors the recruitment and reports to ADB the date when each activity is completed and the reason for any delays. ADB enters the completion dates in column 6 of the CRAM schedule. Planned dates cannot be changed. 47. Columns 8 and 9 of the CRAM schedule show the difference in days between the planned and actual dates for completing each activity, and the difference between the planned and actual days from shortlisting. When an activity is completed later than the planned date, the responsible ADB project staff explains in column 11 of the CRAM the delay and the EA/IA and ADB action needed to get recruitment back on schedule. The upper right corner of the CRAM schedule shows the date it was last updated. 48. The CRAM schedule shows different recruitment activities for each selection method and type of technical proposal. d) Maintaining CRAM Records 49. When the recruitment process is completed, a hard copy of the CRAM is retained in the ADB project file. 50. List of flowcharts and sample CRAM sheet follows:

Figure A6-1 is a Flowchart of Activities for Recruiting Consulting Firms under EA/IA Administered Consulting Services (QCBS, QBS, FBS and LCS).

Figure A6-2 is a Flowchart of Activities for Recruiting Consulting Firms under EA/IA Administered Consulting Services (CQS).

Figure A6-3 is a Flowchart of Activities for Recruiting Consulting Firms under EA/IA Administered Consulting Services (SSS).

Figure A6-4 is a Flowchart of Activities for Recruiting Individual Consultants under EA/IA Administered Consulting Services

Figure A6-5 is a Flowchart of the CRAM process for EA/IA Administered Consulting Services.

Figure A6-6 is a sample CRAM sheet (using biodata technical proposal).

Appendix 6 9

Figure A6-1

10 Appendix 6

Figure A6-2

Appendix 6 11

Figure A6-3

12 Appendix 6

Figure A6-4

Appendix 6 13

Figure A6-5

14 Appendix 6

Figure A6-6

Appendix 7 1

Appendix 7 GUIDELINES FOR THE PREPARATION OF THE PROGRESS REPORT

A. Introduction

1. Letter of Agreement require the recipient country and the implementing agency (IA) to provide ADB with reports and information it reasonably request These include the IA's periodic progress reports that enable the recipient, IA, and ADB to monitor project progress, become aware of problems during implementation, and assess whether the immediate project objectives will be met. 2. The recipient or IA submits the progress reports quarterly, regardless of progress achieved during the period. When little or no progress is achieved, the progress reports inform ADB of the reasons and problems delaying the implementation or that may result in the immediate objectives not being met. B. Content and Format 3. The content of the progress report includes sufficient information in summary form to be useful to ADB as a funding agency. The purpose of the report is to enable the recipient, IA, and ADB to monitor the latest progress, become aware of current problems, and assess whether the project's immediate objectives will be met. More detailed reports are prepared by consultants or contractors for the IA. These reports are held at the IA and are made available for ADB’s periodic review and project completion review missions. 4. When ADB requires detailed information (such as background to a particular problem), this is included as an appendix. Simple charts such as a bar or milestone charts to illustrate implementation progress, a chart showing actual events versus planned actions, expenditures, and the relationship between physical and financial performance are included. A framework and guidelines for calculating project progress and a sample implementation schedule are shown in Appendix 9. C. Procedure

5. The progress report sent to ADB will permit ADB staff to readily capture key information for inputting into the project performance report (PPR) (copy annexed to this Appendix). PPR is the main tool for monitoring project implementation performance within ADB. PPRs for “satisfactory” projects are updated at least quarterly as well as after project review missions. PPRs for “unsatisfactory” and “partly satisfactory” projects are updated more frequently. The following procedures apply:

i. The ADB staff captures key information from the progress report and updates the PPR;

ii. The ADB staff then recommends any proposed actions to the project administration unit (PAU) head.

iii. If the PAU head approves the recommendations, the ADB staff responsible for implementing the project conveys ADB’s comments or recommendations on the report to the recipient or IA. In so doing, a copy of the updated PPR resulting from the progress report may be incorporated.

Appendix 7 2

iv. Where necessary, a special project administration mission is sent to resolve serious problems in advance of the next scheduled review mission,

v. All departments and offices within ADB have access to the updated PPR, and a copy of the progress report is sent only to the concerned parties.

6. Progress reports are preferably submitted to ADB within 30 days after the quarter period under review. The following timeframe for submission of quarterly progress reports had been agreed at inception:

7. If a progress report is not received within 2 weeks of the scheduled date of receipt, the ADB staff responsible for implementing the project sends a reminder immediately to the recipient or IA. Repeated delays in sending progress reports are recorded in the PPR and discussed with the recipient or IA by the project review mission.

Due Dates (Yearly Basis) Quarterly Progress Report I 30 April Quarterly Progress Report II 31 July Quarterly Progress Report III 31 October Quarterly Progress Report IV (Annual Report) 31 January

Appendix 8 1

Appendix 8

STRUCTURE OF QUARTERLY PROGRESS REPORT 1. JFPR Grant Status Report as Executive Summary JFPR Grant Status Report (GSR) serves as an executive summary of the quarterly progress reports (QPR). The format is given in Appendix 10. The GSR will be submitted to ADB’s Office of Cofinance (OCO) by an ADB staff, and OCO will inform the Government of Japan about the progress and issues of the Project on behalf of ADB. 2. Introduction and Basic Data Provide the following: (i) ADB grant number, project title, recipient, executing agency(ies), implementing

agency(ies) (IA); (ii) total estimated project cost and financing plan; (iii) status of project financing including availability of counterpart funds and

cofinancing; (iv) dates of approval, signing, and effectiveness of ADB grant; (v) original and revised (if applicable) ADB grant closing date and elapsed grant

period based on original and revised (if applicable) grant closing dates; and (vi) date of last ADB review mission. 3. Utilization of Funds (ADB Grant, Cofinancing, and Counterpart Funds) Provide the following: (i) cumulative contract awards financed by the ADB grant, cofinancing, and

counterpart funds (commitment of funds to date), and comparison with time-bound projections (targets);

(ii) cumulative disbursements from the ADB grant, cofinancing, and counterpart funds (expenditure to date), and comparison with time-bound projections (targets); and

(iii) reestimated costs to completion, need for reallocation within ADB grant categories, and whether an overall project cost overrun is likely.

4. Project Purpose Provide the following: (i) status of project scope/implementation arrangements compared with those in the

report and approved grant proposal, and whether major changes have occurred or will need to be made;

(ii) an assessment of the likelihood that the immediate development objectives (project purpose) will be met in part or in full, and whether remedial measures are required based on the current project scope and implementation arrangements;

(iii) an assessment of changes to the key assumptions and risks that affect attainment of the development objectives; and

2 Appendix 8

(iv) other project developments, including monitoring and reporting on environmental and social requirements that might adversely affect the project's viability or accomplishment of immediate objectives.

5. Implementation Progress Provide the following: (i) assessment of project implementation arrangements such as establishment,

staffing, and funding of the Grant Implementation Unit (GIU); (ii) information relating to other aspects of the IA’s internal operations that may

impact on the implementation arrangements or project progress; (iii) progress or achievements in implementation since the last progress report; (iv) assessment of the progress of each project component, such as, recruitment of

consultants and their performance; procurement of goods and works (from preparation of detailed designs and bidding documents to contract awards); and the performance of suppliers, manufacturers, and contractors for goods and works contracts;

(v) assessment of progress in implementing the overall project to date in comparison

with the original implementation schedule—quantifiable and monitorable target, (include simple charts such as bar or milestone to illustrate progress, a chart showing actual versus planned expenditure, S-curve graph showing the relationship between physical and financial performance, and actual progress in comparison with the original schedules and budgets; and

(vi) an assessment of the validity of key assumptions and risks in achieving the

quantifiable implementation targets. 6. Procurement Plan for Next 12 Months Provide the following: (i) List of all contract for the next 12 months in value by procurement method and the

date by which procurement activity is expected to commence. 7. Compliance with Covenants Provide the following: (i) the recipient's compliance with policy grant covenants such as sector reform

initiatives and IA reforms, and the reasons for any noncompliance or delay in compliance (if any);

(ii) the recipient’s and IA’s compliance with financial grant covenants including the IA’s financial management, and the provision of audited project accounts or audited agency financial statements; and

Appendix 8 3

(iii) the recipient’s and IA’s compliance with project-specific grant covenants associated with implementation, environment, and social dimensions.

8. Major Project Issues and Problems Summarize the major problems and issues affecting or likely to affect implementation progress, compliance with covenants, and achievement of immediate development objectives. Recommend actions to overcome these problems and issues (e.g., changes in scope, changes in implementation arrangements, and reallocation of grant proceeds).

Appendix 9 1

Appendix 9 GUIDELINES FOR CALCULATING PROJECT PROGRESS

A. Introduction

1. Physical and pre-commencement activities are considered in calculating project implementation progress. These activities, which may include recruitment of consultants, capacity building, detailed design, preparation of bid and prequalification documents, etc., could constitute a significant proportion of overall implementation and therefore should be counted. 2. Each activity in the implementation schedule will be weighted according to its overall contribution (using time as a reference) to progress of project implementation. These weights will then be used to calculate the percentage of project progress along the entire time span of the project. This is to provide a holistic view of the pace of implementation. B. Framework for Compiling Activity List and Assigning Weights.

3. The actual project implementation progress of these activities should be reported regularly through the implementing agency’s (IA) quarterly project progress report. To ensure ADB-wide consistency, the following framework has been established; its application will be monitored through the ADB’s Project Performance Report.

1. Compilation of Activity List

4. The Grant Implementation Unit (GIU) should identify major implementation activities and include them in the implementation schedule, which is attached as an appendix in the grant assistance report. The implementation schedule should follow the critical path of the project's major activities in project implementation taking account of various country, sector, and project constraints

2. Assignment of Weights

5. Corresponding weights for each activity should be assigned to ensure that "project progress" measures the percentage of achievement (non-financial except when the project has credit components) for all events during the entire duration of the implementation schedule. To avoid disproportionate assignment of weights, to the extent possible these should be evenly distributed along the implementation schedule. When activities are concurrent, avoid "double counting."

3. Computation of Project Progress 6. Once all activities are identified and corresponding weights assigned, project progress should be calculated using the following steps:

i. Determine the actual percentage progress (non-financial) of each activity. ii. Multiply these percentages by the assigned weight of each activity to arrive at the

weighted progress. iii. Add up the resulting weighted progress of all activities to determine the project

progress.

Appendix 9 2

7. The following figures provide an illustration of this calculation using a generic sample implementation schedule and a specific example in the education sector.

Table 10.1 Implementation Schedule with Activities and Weights

Sample Implementation Schedule

Source: Adapted from Project Administration Instructions, 5.01, Appendix 2

Appendix 10 1

Appendix 10 FORM OF JFPR GRANT STATUS REPORT

A. Basic Grant Data DMC:

Grant Number: Name of Grant:

Approved Grant Amount:

$

Responsible Project Officer and Division {name, position,

e-mail, phone}:

Grant Commencement Date

(Date LoA was signed):

Original Closing Date / Revised Closing date (after extension):

Executing Agency {Names, Address, Contact Persons, E-mail, Phone, Fax}:

Implementing Agency(ies) {Names, Address, Contact Persons, E-mail, Phone, Fax}:

B. Grant Status Period of Reporting {date from/to}:

Date when this report was prepared:

General Status

(Summary)

A B C D E1

Specify:______________________________

Grant Development Objective:

1 A = Financially Closed; B = Implementation already started or is ongoing; C = LOA signed but implementation has not started yet; D

= ADB Approved but LOA not yet signed; E = Others, (please briefly specify, e.g. extension, or issues that need to be flagged)

Appendix 10 2

Grant

Components

Targeted/Expected Output

Physical

Accomplishments

Notes - Remarks:

(%) Rating2

(HS,S,PS,U)

C. Grant Utilization

Grant Committed:

$

Cumulative

Disbursements:

$

Balance:

$

Notes - Remarks:

Annual Disbursements (from ADB to Grant Accounts):

1st

Qtr. 2nd

Qtr. 3rd

Qtr. 4th

Qtr.

Projected: $ $ $ $

Actual: $ $ $ $

Procurement of

Goods and

Services:

Goods

Services

Notes - Remarks:

No. of

contracts

Total

Amount

No. of

Contracts

Total

Amount

Contracts

Awarded:

Outstanding

Contracts:

2 HS=Highly Satisfactory, S=Satisfactory, PS=Partly Satisfactory, U=Unsatisfactory

Appendix 10 3

D. Major Issues / Problems {please add extra sheet if necessary}

Problems / Issues Action Taken / Proposed

Prepared By: Name / Division / Signature Comments

Project Officer:

Cleared By: Name / Division / Signature Comments

1. Director General:

2. Director:

Appendix 11 1

Appendix 11 SUMMARY OF ADB’S AUDIT REQUIREMENTS

A. Executing Agency/Project Implementing Agency 1. ADB requires a general purpose audit report covering the audited financial statements (AFS) for each executing agency and/or project implementation agency associated with the project, together with a management letter, by agency, prepared in accordance with generally acceptable audit practices. B. Project Accounts 2. ADB requires a special purpose audit of project accounts. The engagement letter (issued by the IA/borrower to the external auditor) for the special purpose audit should lay down the coverage of the audit and nature of the audit opinion required including: (i) a statement of the special purpose audit report and its use (including standards

under which it was prepared) (ii) statement with respect to compliance with Generally Accepted Accounting

Principals (GAAP) (iii) statement with respect to the standards under which the audit was conducted (iv) scope of audit including period covered (v) audit opinion covering current and cumulative project activity including how the

outstanding audit observations have been dealt with (vi) statement with respect to compliance with financial covenants in the loan and

project agreement (vii) statement that ADB’s funds have been used for their intended purpose (viii) In those cases where a management letter is not received on the entity as a

whole, then a management letter covering internal controls, procedures associated with preparation of project accounts would be required.

3. If a statement of expenditures (SOE) and/or imprest fund facility has been provided, the special purpose audit should include an opinion on (i) utilization of the imprest account; (ii) statement of expenditures including whether amount claimed was duly supported to the extent verified; and (iii) whether or not the IA was operating the imprest account in accordance with ADB's procedures. C. Reporting Deadlines 4. The Audit Report and audited financial statements (for the IA, project accounts, and imprest fund as applicable) should be submitted to ADB not more than 6 months following the end of the fiscal year.

Appendix 12 1

Appendix 12 JFPR IMPLEMENTATION COMPLETION MEMORANDUM (ICM)1

A. Objective and Scope 1. The main objective of a JFPR Implementation Completion Memorandum (ICM) is to learn from the experiences of the Recipients, executing agencies (EAs), implementing agencies (IAs) and ADB in implementing grants, and to use the lessons learned to improve the performance of ongoing and future ADB-financed projects in poverty reduction. The ICM will also be used as a measure of ADB’s development effectiveness and as an input to country strategy formulation. An ICM

(i) evaluates the rationale for the JFPR; adequacy of preparation; appraisal and design; implementation arrangements; and performance of the recipient, EA, IAs and ADB, including how problems were handled, whether they were foreseen as potential risks, and the adequacy of the solutions adopted during implementation;

(ii) provides a preliminary evaluation of achievements of the immediate objectives (purpose) and the impact and contribution to the overall objectives (goal);

(iii) provides a preliminary evaluation of the sustainability of the grant interventions and benefits; and

(iv) makes recommendations—based on the evaluation and lessons learned—for dissemination and scaling-up of the grant interventions for future ADB operations.

B. Timing and Preparation of ICM 2. An ICM is prepared within six months after Grant Closing Date.2 3. The Recipient (EA and/or IA) first prepares the ICM for self-evaluation and also helps with the preparation of ADB’s section of the ICM. If the Recipient’s contribution of the ICM is delayed and the grant implementation is considered complete, the division/country director concerned may, after consultation with the latest review mission and responsible project staff, decide to proceed with preparing ADB’s part of the ICM in the absence of the recipient’s section of the ICM. 4. When the grant implementation is approaching completion, an ADB review mission should agree with the Recipients on the outline and timing for the Recipient’s section of the ICM. Assistance in preparing the Recipient’s section of the ICM is usually a part of the terms of reference of the grant implementation unit (GIU). C. Length and Content of ICMs 5. Staff of the unit administering the grant (sector division, regional department or resident mission) must ensure that any problems or issues that arose during grant implementation are recorded in the ICM. Grant status reports and back-to-office reports (BTORs) prepared during preparation and implementation will provide the input for this. Such issues or problems should

1 Policy and procedures are based on the JFPR operational guidelines, topic , in combination with the principles of

PAI 6.07 - Grant Completion Report for ADB Loans. 2 Grant Closing Date is the date when all implementation, consolidation and other related physical activities end, as

shown in the JFPR Grant Proposal and the Letter of Agreement, up to a maximum of four years after JFPR grant effectiveness, including extensions.

2 Appendix 12

not go unnoticed and thus lessons ignored. Therefore, all ICMs are to be detailed. Appendixes are limited to those that are essential for explaining the text. 6. An ICM is kept concise by

(i) concentrating on analyzing grant inputs and activities, implementation arrangements, costs, outputs, and impacts;

(ii) focusing on the principal determinants of performance; (iii) using condensed analytical tables and supporting appendixes; (iv) using cross-referencing to source documents; and (v) avoiding repetition.

D. Intended Use of the Implementation Completion Memorandum (ICM) 7. ICMs are intended for use by and will be circulated to (i) The Government of Japan, (ii) Directors General and Directors of relevant departments, Divisions and offices, (iii) Country director, RM concerned, and (iv) recipients, concerned DMC agency, executing agencies.

Appendix 12 3

Format for Implementation Completion Memorandum (ICM)

I. BASIC INFORMATION

1. JFPR Number and Name of Grant:

2. Country (DMC): 3. Approved JFPR Grant Amount:

$

4. Grant Type:

Project / Capacity Building

5-A. Undisbursed Amount

$

5-B. Utilized Amount

$

6. Contributions from other sources {convert in-kind contributions into US$}

Source of Contribution: Committed Amount Actual Contributions: Remark - Notes:

DMC Government $ $

Other Donors (please name) $ $

Private Sector $ $

Community/Beneficiaries $ $

7-A. GOJ Approval Date: 7-B. ADB Approval Date: 7-C. Date the LOA was signed

(Grant Effectiveness Date):

8-A. Original Grant Closing Date: 8-B. Actual Grant Closing Date:

8-C. Account Closing Date:

9. Name and Number of Counterpart ADB (Loan) Project:

10. The Grant Recipient(s): {Names, address, contact persons, e-mail, phone, fax numbers of the agency(ies)

and/or institutions that signed the Letter of Agreement with ADB}

11. Executing and Implementing Agencies: {Names, Address, Contact Persons, E-mail, Phone, Fax}

4 Appendix 12

II. GRANT PERFORMANCE ASSESSMENT

12. Description (Background rationale):

{Extract information on background and rationale from the approved JFPR Grant Proposal and summarize}

13. Grant Development Objective and Scope:

{Briefly describe the Grant Development Objectives (purpose) and scope (outputs and activities). Assess the relevance of

the Grant design (including appropriateness of objectives, components, implementation arrangements and schedule) and

formulation (including extent of stakeholders’ participation and ownership)}

14. Key Performance Indicators

{list each original indicator as mentioned in the

approved JFPR Grant Proposal}

Accomplish-

ments

Rating

(HS,S,PS,U3)

Evaluation of each Indicator:

{rate the accomplishments, describe any changes and

evaluate each indicator for its relevance,

achievements and sustainability}

i)

ii)

iii)

iv)

v)

15. Evaluation of Inputs (Adequacy of formulation, terms of references, inputs and performance of the

Recipient(s), EA, IA(s), NGOs and ADB, performance of consultants, other inputs, review missions):

{Evaluate, among others: (i) The economy of input provision (the relative cost of input provision); (ii) the

productivity of the inputs (conversion into outputs); (iii) the quality of the inputs; (iv) reasons for deviating

from planned inputs and activities; (v) client satisfaction with the inputs provided; (vi) the performance of

ADB, the Recipient, the EA, IA(s) and NGOs as highly satisfactory (HS), satisfactory (S), partly

satisfactory (PS), or Unsatisfactory (U); (vii) any other inputs.}

3 HS=Highly Satisfactory; S=Satisfactory; PS=Partly Satisfactory; U=Unsuccessful

Appendix 12 5

16. Evaluation of Outputs and Results (Reports generated, institution building, training, analysis of quality,

comparison with terms of references, sustainability and exit strategy):

{Evaluate performance issues, such as (i) efficiency in the production of outputs (cost and process); (ii)

effectiveness or efficacy (compare actual to planned results); (iii) quality of outputs (refer to qualitative

benchmarks where possible); (iv) recipient and client (beneficiaries) satisfaction with the outputs/ results;

(v) timeliness of delivery of outputs; and (vi) effectiveness of the exit strategy and related transfer of

activities for sustainability.}

17. Overall Assessment and Rating (HS,S,PS,U):

{Provide an overall assessment including the issues of sustainability, and categorize the Grant activities

as highly successful (HS), successful (S), partly successful (PS), or unsuccessful (U) following OED’s

guidelines.}

18. Major Lessons Learned:

{Discuss the significant lessons learned that can help improve the formulation and implementation of

similar JFPR grant investments and as an input for recommendations and for scaling-up the pilot

interventions under this Grant, particularly in relation to the overall objective of poverty reduction.}

19. Recommendations and Follow-up Actions:

{Include project-specific and general recommendations (scaling up) of any interventions, activities and

action required, and make suggestions for changes to policies and strategies that can improve the

effectiveness of the counterpart loan, future JFPR grants, and/or that can generally be applicable to ADB

practices.}

20. Additional Remarks, Comments and Suggestions:

{Present here any additional remarks, comments and suggestions that have not been dealt with

or mentioned in earlier paragraphs, but which may contribute to this memorandum.}

6 Appendix 12

III. PREPARATION AND APPROVAL

Prepared by: Name of Person and designation /

Name of Institution / Signature

Date

1. Representative

from the Recipient:

2. Manager,

JFPR-GIU4:

3. Project Officer,

ADB: {the Project Officer

consolidates the inputs from the

Recipient and the PIU}

Approved Name of Person and designation / Name of

Institution / Signature

Date

1. Director General,

Department, ADB:

2. Division/Country

Director, ADB:

3. Head of the

Recipient:

4. Head of the

Executing Agency:

5. Head of

Implementing Agency:

4 GIU=grant implementation unit (formerly called PIU=project implementation unit)

Appendix 13 1

Appendix 13 LIST OF PUBLICATIONS RELEVANT TO PROJECT ADMINISTRATION

An indicative list of reference material is given here (mostly downloadable from ADB’s website: www.adb.org), to be used, as appropriate.

(i) Project-Related

Grant Assistant Report (http://www.adb.org/projects/summaries.asp)

Grant Agreement

(ii) General

e Handbook on Project Implementation (http://www.adb.org/Documents/handbooks/project-implementation/default.asp)

Project Administration Instructions (PAIs) (http://www.adb.org/Documents/Manuals/PAI/default.asp)

Anticorruption Policy (December 2007) (http://www.adb.org/Documents/Policies/Anticorruption-

Integrity/default.asp)

ADB's Public Communication Policy (http://www.adb.org/disclosure/)

(iii) Consultants

Guidelines on the Use of Consultants by ADB and its Borrowers (2010, as amended from time to time)

(http://www.adb.org/consulting/qcbs.asp)

Consulting-Services-Operations-Manual (http://www.adb.org/Consulting/documents.asp)

(iv) Procurement of Goods and Services

Procurement Guidelines (2010, as amended from time to time) (http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf)

Guide on Bid Evaluation (2009, as amended from time to time) (http://www.adb.org/Procurement/guide-bid-apr06.pdf)

Handbook on Problems in Procurement for Projects Financed by the Asian Development Bank (http://www.adb.org/Publications/product.asp?sku=0057P&p=prcrpubs)

a) Procurement of Goods

Users-Guide for Procurement of Goods (http://www.adb.org/Procurement/Goods-Users-Guide.pdf)

SBD for Goods - Single Stage: One Envelope (http://www.adb.org/Procurement/prequalification-bid-documents.asp)

http://www.adb.org/projects/summaries.asp

http://www.adb.org/Documents/handbooks/project-implementation/default.asp

http://www.adb.org/Documents/handbooks/project-implementation/default.asp

http://www.adb.org/Documents/Manuals/PAI/default.asp

http://www.adb.org/Documents/Policies/Anticorruption-Integrity/default.asp

http://www.adb.org/Documents/Policies/Anticorruption-Integrity/default.asp

http://www.adb.org/disclosure/

http://www.adb.org/consulting/qcbs.asp

http://www.adb.org/Consulting/documents.asp

http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf

http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf

http://www.adb.org/Procurement/guide-bid-apr06.pdf

http://www.adb.org/Publications/product.asp?sku=0057P&p=prcrpubs

http://www.adb.org/Procurement/Goods-Users-Guide.pdf

http://www.adb.org/Procurement/prequalification-bid-documents.asp

2 Appendix 13

b) Procurement of Works

Users-Guide for Procurement of Works (http://www.adb.org/Procurement/documents.asp)

Standard Bidding Documents for Works – Small Contracts (Single-Stage: One-Envelope)

(http://www.adb.org/Procurement/prequalification-bid-documents.asp)

(v) Finance

Loan Disbursement Handbook (2007, as amended from time to time) (http://www.adb.org/documents/handbooks/loan_disbursement/ default.asp)

Handbook for Borrowers on Financial Governance and Management of Investment Projects Financed by ADB (http://www.adb.org/Governance/Financial-Management/guidelines.asp)

Guidelines for Financial Management and Analysis of Projects (http://www.adb.org/Governance/Financial-Management/guidelines.asp)

(vi) Safeguards a) Environmental and Social Safeguards

Safeguard Policy Statement (2009) (http://www.adb.org/Documents/Policies/Safeguards/default.asp)

b) Social Dimensions and Gender Development

Handbook on Social Analyst (http://www.adb.org/Documents/Handbooks/social-analysis/default.asp)

Technical Reference Materials

(i) Guidelines on Road Classification System and Delineation of Construction and Maintenance Responsibilities, 2009 (Royal Government of Bhutan, Ministry of Works and Human Settlement) (http://www.mowhs.gov.bt/Road%20Guidelines/English_Road_Guidelines.pdf)

(ii) Guidelines for Farm Road Development, May 2009 (Department of Agriculture, Ministry of Agriculture)

(iii) Application for Environmental Clearance Guideline for Highways and Roads, August 2004 (National Environment Commission, Royal Government of Bhutan)

(iv) Farm Road Maintenance Manual (Department of Agriculture, Royal Government of Bhutan)

http://www.adb.org/Procurement/documents.asp

http://www.adb.org/documents/handbooks/loan_disbursement/default.asp

http://www.adb.org/Governance/Financial-Management/guidelines.asp

http://www.adb.org/Governance/Financial-Management/guidelines.asp

http://www.adb.org/Documents/Policies/Safeguards/default.asp

http://www.mowhs.gov.bt/Road%20Guidelines/English_Road_Guidelines.pdf

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