Rajasthan State Highway Investment Program (RRP IND 49228)

Project Number: 49228-001 Loan Number: XXXX April 2017

INDIA: Rajasthan State Highway Investment

Program

Facility Administration Manual

ABBREVIATIONS

ADB APFS DMF

– – –

Asian Development Bank audited project financial statements design and monitoring framework

EA EMP EMOP

– – –

executing agency environmental management plan environmental monitoring plan

FAM GOR IA KM PFR PMC PPP PWD SPS

– – – – – – – – –

facility administration manual Government of Rajasthan Implementing agency kilometer periodic financing request project management consultant public-private partnership Public Works Department Safeguard Policy Statement

CONTENTS

I. INVESTMENT PROGRAM DESCRIPTION 1

II. IMPLEMENTATION PLAN AND READINESS ACTIONS 2

III. PROJECT MANAGEMENT ARRANGEMENTS 3

Project Implementation Organizations – Roles and Responsibilities 3 A. Key Persons Involved in Implementation 3 B. Project Organization Structure 4 C.

IV. COSTS AND FINANCING 6

A. Cost Estimates Preparation and Revisions 6

B. Key Assumptions 6

C. Detailed Cost Estimates of Tranche 1 by Expenditure Category and by Year 7

D. Allocation and Withdrawal of Loan Proceeds in Tranche 1 9

E. Contract and Disbursement S-Curve 9

F. Fund Flow Diagram 10

V. FINANCIAL MANAGEMENT 12

Financial Management Assessment 12 A. Disbursement 15 B. Accounting 15 C. Auditing and Public Disclosure 15 D.

VI. PROCUREMENT AND CONSULTING SERVICES 18

A. Advance Contracting and Retroactive Financing 18

B. Procurement of Goods, Works, and Consulting Services 18

C. Procurement Plan 18

D. Consultant's Terms of Reference 19

VII. SAFEGUARDS 20

Environmental Safeguards 20 A. Social Safeguards 24 B. Indigenous Peoples 27 C. Grievance Redress Mechanism 27 D. Capacity Development 28 E. Prohibited Investment Activities 28 F.

VIII. GENDER AND SOCIAL DIMENSIONS 29

Gender 29 A. Health 29 B. Labor 30 C.

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 31

A. Project Design and Monitoring Framework 31

B. Monitoring 31

C. Evaluation 32

D. Reporting 32

E. Stakeholder Communication Strategy 33

X. ANTICORRUPTION POLICY 35

XI. ACCOUNTABILITY MECHANISM 36

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 37

ATTACHMENTS

A. List of Project Roads under Tranche 1

B. Procurement Plan

C. Terms of Reference for Project Management Consultant

Facility Administration Manual Purpose and Process The facility administration manual (FAM) describes the essential administrative and management requirements to implement the investment program on time, within budget, and in accordance with government and Asian Development Bank (ADB) policies and procedures. The FAM includes references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the FAM. The executing and implementing agencies are wholly responsible for the implementation of ADB-financed projects under the investment program, as agreed jointly between the borrower and ADB, and in accordance with the government and ADB’s policies and procedures. ADB staff is responsible for supporting implementation including compliance by executing and implementing agencies of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures. At loan negotiations the borrower and ADB have agreed to the FAM and ensured consistency with the loan agreement. Such agreement is reflected in the minutes of the loan negotiations. In the event of any discrepancy or contradiction between the FAM and the loan agreement, the provisions of the loan agreement shall prevail. After ADB Board approval of the investment program's report and recommendations of the President (RRP), changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval, they will be subsequently incorporated in the FAM.

I. INVESTMENT PROGRAM DESCRIPTION

1. Many of the state highways and major district roads in Rajasthan are in poor condition in terms of ride quality, geometry, pavement strength, drainage, and safety standards. The Rajasthan State Highway Investment Program (the investment program) will improve the efficiency and safety of transport on the state highways. The investment program will deliver two outputs: (i) improved state highways and major district roads, and (ii) enhanced capacity of Rajasthan Public Works Department (PWD). The two outputs will be delivered through two components of the investment program:

(i) Road improvement component will design, improve, and maintain about 2,000 kilometer of state highways and major district roads to 2-lane or intermediate-lane standard and meet the safety requirements. All improved roads will be included in the state highway network.

(ii) Capacity development component will build the capacity of Rajasthan PWD, and focus on its Public-Private Partnership (PPP) Division. The scope of capacity development will cover road asset management, road safety, PPP, and project management under the PPP Division’s business process.

2. Tranche 1. Tranche 1 is estimated to cost $655 million; and will require a loan of $220 million from ADB’s ordinary capital resources. The first tranche will deliver two outputs: (i) about 1,000 km of improved state highways and major district roads, and (ii) enhanced capacity of Rajasthan PWD by developing the streamlined business process and a project performance monitoring system. 3. A list of project roads under Tranche 1 is in Attachment A. The civil works will involve two types of contract modalities:

(i) Annuity-based PPP concessions. Under the concession agreements, 50% of the project capital cost is paid by the government from ADB loans to the concessionaire during the construction period. The remaining 50% of the project capital cost along with interest is disbursed as Annuity Payments in 20 biannual installments spread over a period of ten years commencing from the commercial operation date, along with the payments for operation and maintenance.

(ii) Engineering, procurement, and construction (EPC) contracts. The EPC

contracts are based on the model contracts developed by the Ministry of Road Transport and Highways, Government of India. The initial construction will be completed in the first 1-2 years, followed by a 5-year performance-based maintenance period.

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II. IMPLEMENTATION PLAN AND READINESS ACTIONS

MFF Availability Period

Activity

A Project Preparation

1 Preparation of Projects under Tranche 1

2 Preparation of Projects under Tranche 2

B Project Management

1 Establishment of PIU

2 Selection of Consultants

3 Procurement of civil works under Tranche 1

4 Procurement of civil works under Tranche 2

5 Contract Administration

C Civil Works

1 Implementation of civil works under Tranche 1

2 Implementation of civil works under Tranche 2

D Capacity Building

1 Capacity Building Program

MFF = Multitranche Financing Facility, PIU = Project Implementation Unit

Source:Government of Rajasthan

Year 1

2018

Year 2

2017

Year 3

2020

Year 4

2019

Year 5 Year 6 Year 7 Year 8

2022 2023 202420212015

Advance Actions

2016

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III. PROJECT MANAGEMENT ARRANGEMENTS

Project Implementation Organizations – Roles and Responsibilities A.

Project Stakeholders Management Roles and Responsibilities

Executing agency (EA) State Government of Rajasthan through the PWD

overall coordination of project implementation

interagency coordination

day-to-day project management

consultant recruitment and procurement of works

withdrawal applications

project progress reports

maintaining project accounts and complete loan financial records

Asian Development Bank Monitor and review overall implementation of the project in consultation with the EAs/IAs including: the project implementation schedule; actions required in terms of poverty reduction, environmental impacts, and resettlement plans (RPs) if applicable; timeliness of budgetary allocations and counterpart funding; project expenditures; progress with procurement and disbursement; statement of expenditure when applicable; compliance with particular loan covenants; and the likelihood of attaining the project’s immediate development objectives.

PWD = Public Works Department Source: Asian Development Bank.

Key Persons Involved in Implementation B.

Executing Agencies

Mr. D.B. Gupta Additional Chief Secretary (Infra & PWD) GoR Government of Rajasthan (T): +91 222 7061

Mr. Shiv Lahari Sharma Chief Engineer and Additional Secretary Public Works Department Government of Rajasthan (T): +91 511 0501

Mr. Anoop Kulshreshtha Additional Chief Engineer (PPP) Public Works Department Government of Rajasthan (T): +91 511 0547

ADB

Hiroaki Yamaguchi Director, SATC,

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South Asia Regional Department (T): +63 2 632 1647

Chen Chen (Mission Leader) Senior Transport Specialist, SATC South Asia Regional Department

(T): +63 2 632 6268

Project Organization Structure C.

4. The following flow chart and table show the reporting lines and essential internal structures of the project implementation units and their staffing assignments.

Sr. No Position Name Existing Appointment Timeframe

1 Additional Chief Engineer S.L. Fageria (OIC) appointed 2 [1] Superintendent Engineer (ADB Projects) Anoop Kulshreshtha appointed 3 [2A] Project Director 1 Smt. Sangeeta Sharma appointed 4 [2B] Project Director 2 Sh. Niranjan Choudhary appointed 5 [2C] Project Director 3 Sh.S.C. Agrawal appointed 6 [2D] Project Director 4 Sh.D.K.Gupta appointed 7 [2E] Project Director 5 Sh. R.K.Jain appointed 8 [2F] Project Director 6 Sh. S.M. Swami appointed 9 [3A] Assistant Engineer (Safeguard Focal) Sh. Hanuman Ratnu appointed 10 [3B] Assistant Engineer (Safeguard Focal) Sh. I.P. Choudhary appointed 11 [3C] Assistant Engineer (Safeguard Focal) Sh. Lokendra Singh appointed 12 [3D] Assistant Engineer (Safeguard Focal) Sh. P.P. Singh appointed 13 [3E] Assistant Engineer (Safeguard Focal) Sh. Surendra Kumar appointed 14 [3F] Assistant Engineer (Safeguard Focal) Sh. Krishan Saroagi appointed 15 [4A] Executive Engineer Shi. Somesh Rathi appointed 16 [4B] Executive Engineer Sh. Kaushlendra Bharadwaj appointed

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17 [4C] Executive Engineer Sh. V.K. Jain appointed 18 [4D] Executive Engineer Sh. Neeraj Jain appointed 19 [5A] Assistant Engineer Sh. Rakesh Sharma appointed 20 [5B] Assistant Engineer Sh. Fanish Kumar appointed 21 [5C] Assistant Engineer (Social Officer) Ms. Ritambhara Bohra appointed 22 [5D] Assistant Engineer (Environment Officer) Mrs. Shilpa Shrimal appointed 23 [6] Chief Accounting Officer Mr. Raju Sood appointed 24 [6A] Accounting Officer Sh. Umed Singh Godara appointed 25 [6B] Accountant appointed Feb-16 26 [6C] Accountant appointed Jun-16 27 [6D] Accountant appointed Dec-16 28 [6E] Accountant appointed TBD 29 [7] Resettlement and Acquisition Supervisor appointed Jan-16 30 [7A] Land Acquisition Officer I appointed Jan-16 31 [7B] Land Acquisition Officer II appointed Jan-16 32 [7C] Land Acquisition Officer III appointed TBD 33 [7D] Revenue Inspector appointed Jan-16 34 [7E] Revenue Inspector appointed Jan-16 35 [7F] Revenue Inspector appointed Apr-16 36 [7G] Revenue Inspector appointed Apr-16 37 [7H] Revenue Inspector appointed Sep-16 38 [7I] Revenue Inspector appointed Sep-16 39 [7J] Revenue Inspector appointed Dec-16 40 [7K] Revenue Inspector appointed Dec-16 41 [7L] Revenue Inspector appointed Dec-16

PPP= Public-Private Partnership, PWD= Public Works Department Source: Government of Rajasthan.

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IV. COSTS AND FINANCING

5. The investment program is estimated to cost $1,415 million, including taxes and duties, physical and price contingencies, interest and other charges during implementation. A. Cost Estimates Preparation and Revisions

6. The cost estimates were prepared by ADB and Government of Rajasthan’s Public Works Department with information for the investment costs extracted from the consultants detailed project report. The cost estimates were based on March 2016 prices. B. Key Assumptions

7. The following key assumptions underpin the cost estimates and financing plan:

(i) Exchange rate: INR67.8261 = $1.00 (as of 15 December 2016). (ii) Price contingencies based on expected cumulative inflation over the

implementation period are as follows:

Table 1: Escalation Rates for Price Contingency Calculations (%)

Item 2016 2017 2018 2019 2020

Foreign rate of price inflation 1.50 1.40 1.50 1.50 1.50

Domestic rate of price inflation 5.40 5.80 5.50 5.50 5.50

Source: Asian Development Bank.

Table 2: Investment Program ($ million)

Item Amounta

A. Base Costb

1. Road improvement 1,292.14 2. Capacity development 18.65 Subtotal (A) 1,310.79 B. Contingencies

c 81.07

C. Financing Charges During Implementationd 23.14

Total (A+B+C) 1,415.00 a Includes taxes and duties of $25.29 million to be financed from ADB loan resources, and $46.37 from

government resources by cash contribution. The amount of taxes and duties to be financed by ADB are (i) within the reasonable threshold identified during the CPS preparation process; (ii) represent only 1.8% of the investment plan; (iii) apply only to ADB-financed expenditures. The financing of taxes and duties is considered material and relevant to the success of the project.

b In 2016 prices.

c Physical contingencies computed at 2% for civil works. Price contingencies computed at about 1.5% on foreign

exchange costs and 5 to 6% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

d Includes interest and commitment charges. Interest during construction for the ADB loan has been computed at

the 5-year swap London interbank offered rate plus a spread of 0.5% for the ordinary capital resources loan. Commitment charges for an ADB loan are 0.15% per year to be charged on the undisbursed loan amount.

Source: Asian Development Bank. 8. The government has requested an MFF in an amount up to $500 million from ADB’s ordinary capital resources to help finance civil works and consulting service, including part of the taxes and duties to be financed under the investment program. Private sector investment of

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about $450 million will be appropriately structured under the design-build-operate/maintenance-transfer model. Financing from the private sector will be predicated on future contractual payments from the state government, in the nature of annuity payments, and subject to meeting specified performance standards.1 Such payments from the government are not unconditional, and will be assessed by the commercial finance market (debt and equity) based on performance capacities of the contractor in construction and maintenance, as well as credit-worthiness of the state government. This financing element is therefore considered as private sector investment. The Government of Rajasthan will provide counterpart financing of $465 million for land acquisition and resettlement, utility shifting, operation and maintenance costs under the concession or contract agreements, consulting services, taxes and duties, project management, and financing charges during implementation. The first tranche of the MFF is estimated to cost $655 million, with ADB financing of $220 million, it will have a 25-year term, including a grace period of 8 years, using the annuity-type repayment option based on 5% discount factor, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.15% per year, and such other terms and conditions set forth in the draft loan and project agreements. Based on this, the average loan maturity is 17.92 years and the maturity premium payable to ADB is 0.20% per annum. 9. The financing plan and an indicative tranche schedule are in Table 3.

Table 3: Investment Program Financing Plan

Source Amount

($ million) Share of Total (%)

Amount ($ million)

Tranche 1 Tranche 2

Asian Development Bank 500.0 35.3 220.0 280.0 Private Sector 450.0 31.8 215.0 235.0 Government 465.0 32.9 220.0 245.0

Total 1,415.0 100.00 655.0 760.0

Source: Asian Development Bank.

C. Detailed Cost Estimates of Tranche 1 by Expenditure Category and by Year

10. The detailed cost estimates of Tranche 1 by expenditure category and detailed cost estimates by financier are presented below. The percentages showing in the table represent the financing contribution from each party as a portion of the total investment costs covering the construction period and the commercial operation period. The total investment costs include the project capital costs, the associated financial charges from ADB and the private sector, and the operation and maintenance costs.

1 Fifty percent of the project capital cost is paid by the government to the concessionaire during the construction

period. The remaining 50% of the project capital cost along with interest is disbursed as annuity payments in 20 biannual instalments spread over a period of 10 years commencing from the commercial operation date.

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Table 4: Detailed Cost Estimates of Tranche 1 ($ million)

Total ADB GOR Private S. ADB GOR Private S.

A. Investment Costs 1. Civil Works

a. Annuity Packages 461.18 123.53 124.30 213.35 26.8% 27.0% 46.3%

b. EPC Packages 69.40 64.90 4.50 93.5% 6.5%

c. Land Acquisition and Resettlement 49.70 49.70 100.0%

d. Utility Shifting 4.55 4.55 100.0%

2. Consultancy

a. Project Management 4.20 4.20 100.0%

b. Independent Engineer 3.30 1.65 1.65 50.0% 50.0%

c. Road Safety 0.55 0.55 100.0%

Subtotal (A) 592.88 192.63 185.25 215.00 32.5% 31.2% 36.3%

B. Project Management

1. Project Implementation Unit 15.49 15.49 100.0%

Subtotal (B) 15.49 15.49 100.0%

C. Contingencies

1. Physical Contingency 10.16 7.60 2.56 74.8% 25.2%

2. Price Contingency 26.29 19.77 6.52 75.2% 24.8%

Subtotal (C) 36.45 27.37 9.08 75.1% 24.9%

D. Financing Charges During Implementation

1. Interest During Implementation 9.38 9.38 100.0%

2. Commitment Charges 0.80 0.80 100.0%

Subtotal (D) 10.18 10.18 100.0%

Total Project Cost (A+B+C+D) 655.00 220.00 220.00 215.00 33.6% 33.6% 32.8%

Source: Asian Development Bank.

Table 5: Detailed Financial Projection by Year (Tranche 1)

($ million)

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

A. Investment Costs

1. Civil Works a. Annuity

Packages 2.52 80.47 45.75 26.39 25.98 26.58 33.68 33.06 32.98 36.75 41.04 40.51 35.47 b. EPC

Packages 1.30 11.70 32.42 19.45 0.32 0.65 0.97 1.30 1.30 c. Land

Acquisition and Resettlement 24.85 24.85

d. Utility Shifting 4.55 2. Consultancy

a. Project Management 0.84 0.84 0.84 0.84 0.84

b. Independent Engineer 1.10 1.10 1.10

c. Road Safety 0.18 0.18 0.18 Subtotal (A) 26.15 45.74 115.01 67.32 27.55 27.46 27.55 34.98 34.36 32.98 36.75 41.04 40.51 35.47

B. Project Management

1. Project Implementation Unit 1.55 3.87 3.87 3.87 2.32 Subtotal (B) 1.55 3.87 3.87 3.87 2.32

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Source: Asian Development Bank.

D. Allocation and Withdrawal of Loan Proceeds in Tranche 1

11. The following table should be read in conjunction with the narrative paragraphs contained in the loan agreements – schedule entitled “Allocation and Withdrawal of Loan Proceeds”.

Table 6: Allocation and Withdrawal of Loan Proceeds

CATEGORY ADB FINANCING

Number Category Amount Allocated

($ million)

Percentage and Basis for Withdrawal From the Loan Account

1 Works 188.43 100 percent of total expenditure*

2 Consulting Services 4.20 100 percent of total expenditure

3 Unallocated 27.37

Total 220.00

* during the construction period.

E. Contract and Disbursement S-Curve

12. The following graph shows quarterly contract awards and disbursement projections of ADB loan over the life of Tranche 1.

C. Contingencies 1. Physical

Contingency 3.80 3.80 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 0.26 2. Price

Contingency 7.91 11.86 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 Subtotal (C) 11.71 15.66 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91 0.91

D. Financing Charges During Implementation

1. Interest During Implementation 2.35 2.35 2.35 2.35

2. Commitment Charges 0.20 0.20 0.20 0.20

Subtotal (D) 2.55 2.55 2.55 2.55

Total Project Cost (A+B+C+D) 27.70 52.16 133.14 89.40 33.33 28.37 28.46 35.89 35.27 33.89 37.66 41.95 41.42 36.38

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F. Fund Flow Diagram

13. The following diagrams show how the funds will flow from ADB and the Borrower to implement project activities. The funds of the private sector as concessionaires will directly be utilized for construction, and therefore are not part of the fund flow process.

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

200.00

220.00

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2016 2017 2018 2019 2020 2021

$ m

illi

on

Contract Awards (Projection) Disbursement (Projection)

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Source: Government of Rajasthan

Payment

Vouchers

Replenishment (monthly)/ LC System

Finance Department

ADB Withdrawal Application

Ministry of Finance

Withdrawal Application

Request for Replenishment

Vouchers

Payment

Payment

Billing

Payment

ADB Government of India

Government of Rajasthan

PWD PPP Division

Certify

Construction Supervision Consultant

Civil Works Contractors

Equipment Suppliers

Treasury System/ Letter of Credit System

IPC

CAAA India Resident Mission

Controller

GOI Bank

Account

Land Acquisition, R&R, Imprest to PIU and other non-eligible cost items

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V. FINANCIAL MANAGEMENT

Financial Management Assessment A.

14. The financial management assessment (FMA) was conducted from July 2015 to January 2016 in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects and the Financial Due Diligence: A Methodology Note, and Technical Guidance Notes.2

The FMA considered the capacity of the Rajasthan PWD including funds-flow arrangements, governance, staffing, budgeting, accounting and financial reporting systems, internal control procedures, financial information systems, and internal and external auditing arrangements. The fiduciary assessment of Rajasthan PWD, and in particular the PPP Division is carried out to determine the degree to which the financial management arrangements are adequate to manage fiduciary risks and provide reasonable assurance that ADB funds will be used for their intended purpose.3 15. Disbursement and budgeting mechanisms are adequate. However, the overall financial management risk is rated as Moderate due to a lack of proper internal audit function, delays in completion of the external audit, and lack of experience in implementing ADB-funded projects by PWD PPP Division. The PWD staff who is handling the World Bank-funded project, will provide support to the proposed program on a need basis. In addition to this, key actions are given below, based on which the financial management arrangements are considered satisfactory. 16. The key risks and the financial management action plan is given in Table below:

Table 6: Financial Management Action Plan

Risk Mitigating Measure Timeline Responsibility 1 Weak internal

audit function Additional arrangements to be made for appropriate independent internal audit of the project activities, either by deploying separate staff or by outsourcing to a private external qualified auditor

Ongoing until the project completion

PWD

2 Lack of experience in ADB funded projects

PWD staff who is handling the World Bank funded project, will provide support to the proposed program on a need basis.

Ongoing PWD

A dedicated and competent financial management specialist will be recruited

Prior to loan effectiveness

PWD

3 Weak capacity of PWD staff

Fill staff vacancies Prior to loan effectiveness

PWD

Training is required for the finance and accounts staff in ADB procurement and disbursement

Within 3 months after the PMC is

ADB

2 Available at: http://www.adb.org/Documents/Others/FM-toolkit/Methodology-Note.pdf, and Financial Management.

See also Analysis of Projects Guidelines (2005): http://www.adb.org/Documents/Guidelines/Financial/default.asp. 3 Financial Management Assessment Report available upon request.

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Risk Mitigating Measure Timeline Responsibility guidelines and financial reporting requirements

appointed.

4 Enhance project reporting and monitoring

(i) Detailed budget estimates and variance analysis are to be done with respect to financial and physical targets, at least on a quarterly basis, to have more control on the projects and activities(ii) incorporate requirement for recording expenditure by output and financing into the FMIS

Ongoing PWD

5 Weak controls over fixed assets

Computerized asset register and automatic updating may be considered with regular monitoring of the physical assets

Ongoing PWD

6 Ensure availability of funds

To incur expenditure there must be a budget allocation, Administrative Sanction and Technical Sanction.

Ongoing State Finance Department

ADB= Asian Development Bank, FMIS= financial management information system, PMC= project management consultant, PWD= Public Works Department. Source: Asian Development Bank

17. The Risk Assessment and Mitigation Measures are listed below: Risk Risk

Assessment Risk-Mitigation Measures

1. Implementing entity M PWD PPP Division is a newly formed Division under PWD. Program managers will get support on a need basis from PWD staff who are already doing World Bank-funded EAP. A dedicated and competent financial management specialist will also be recruited.

2. Funds flow L GOR shall ensure the timely release of funds to PWD PPP Division including counterpart funds to the projects as per loan covenant. ADB disbursement will follow the reimbursement procedure. Timely availability of counterpart funds will be ensured by implementing the proposed funds flow arrangements. No systematic problems related to funds have been reported in the current projects handled by PWD.

3. Budgeting L Budgeting in PWD PPP Division for roads are based on the government system of budgeting. As per the allocation, projects are selected and funds are made available in the yearly state budget under a single line item. To incur expenditure there must be a budget allocation, administrative and technical sanctions.

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Risk Risk Assessment

Risk-Mitigation Measures

3. Staffing M PWD PPP Division now has sanctioned posts of Financial Advisor-1, Accounts Officer -2, Assistant Accounts Officer -2, and Accountants – 6. Out of this, one accounts officer, one assistant accounts officer and 4 accountants are exclusively planned for ADB Projects.

4. Accounting policies and procedures

L Government of Rajasthan’s (GOR) PWF&AR are followed. Chart of accounts is adequate to capture financial information required to meet ADB reporting requirements. There is room for improvement to include component- and activity- wise booking of expenditure.

5. Internal audit M Internal checking is done on a need basis by the departmental audit section in PWD in all offices under their control on need base. Additional arrangements will be made for appropriate independent internal audit of the project activities, either by deploying separate staff or by outsourcing to a private external qualified auditor.

6. External audit (statutory) M The Accountant General (Audit) of the Government of Rajasthan is mandated to carry out the statutory audit of PWD. The AG does the audit and prepares reports of each department separately, including multiple reports for PWD. PPP Division is not yet audited by AG.

7. External audit (project level)

M The project will inform AG’s office and include in their work plan, as state level audits for projects historically face delays.

8. Reporting and monitoring M PWD PPP Division reports to the Chief Engineer PWD. There are no reports other than the governmental reporting now in place in PWD PPP Division. It is recommended to have quarterly and annual progress reports for the proposed project. Standard templates for APFS shall else be provided to PWD.

9. Information systems M Optimal use of technology in the Finance and Accounts Wing for the preparation of accounts and reporting requirements will be explored. The present software Integrated Financial Management System Software may be fine-tuned to get maximum details required with the help of NIC.

10. Internal controls M Poor controls over fixed assets identified by the auditor. The fixed asset register to be automated and reconciled regularly.

Overall Control Risk M

H – High, S- Substantial, M – Moderate, L – Low.

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AFPS= audited project financial statements, AG= accountant general, AR= accounts rules, EAP= East Asia Pacific, NIC= National Informatics Centre, PPP= Public-Private Partnership, PWF= Public Works Financial, PWD= Public Works Department Source: Asian Development Bank.

Disbursement B.

18. The loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2015, as amended from time to time), and detailed arrangements agreed upon between the government and ADB.4 Online training for project staff on disbursement policies and procedures is available.5 Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control. 19. Reimbursement procedure will be used for civil works, consulting services, and equipment. The statement of expenditure procedure (SOE) will be used to reimburse eligible expenditure for payments less than $100,000. Supporting documents and records for the expenditures claimed under the SOE should be maintained and made readily available for review by ADB's disbursement and review missions, upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit. Any individual payment to be reimbursed under the SOE procedure shall not exceed the equivalent of $100,000. Reimbursement of individual payments in excess of the SOE ceiling should be supported by full documentation when submitting the withdrawal application to ADB. 20. Rajasthan PWD will be responsible for (i) preparing disbursement projections, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) preparing and sending withdrawal applications to ADB. Before the submission of the first withdrawal application, the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the government, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is set in accordance with the Loan Disbursement Handbook. Individual payments below the amount should be paid by the PWD and subsequently claimed to ADB through reimbursement, unless otherwise accepted by ADB. 21. All disbursements under government financing will be carried out in accordance with regulations of the Government of Rajasthan.

Accounting C.

22. The Rajasthan PWD will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the investment program and separately for each tranche. The Rajasthan PWD will prepare project financial statements in accordance with the government's accounting laws and regulations which are consistent with international accounting principles and practices.

Auditing and Public Disclosure D.

23. The Rajasthan PWD will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the investment program and separately for each tranche. Project financial statements will follow the government of India’s

4 Available at: http://www.adb.org/Documents/loan-disbursement-handbook.

5 Disbursement e-Learning. http://wpqr4.adb.org/disbursement_elearning.

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cash-based accounting laws and regulations which are consistent with international accounting principles and practices, template financial statements provided in the standardized terms of reference for audit of ADB-assisted projects, agreed with the Comptroller and Auditor General (CAG) of India, the DEA and ADB can be referred to as a guide for preparing financial statements. 24. The Rajasthan PWD will cause the detailed project financial statements to be audited in accordance with international standards on auditing, government's audit regulations, by the CAG, acceptable to ADB. The audited project financial statements together with the auditor’s opinion will be presented in the English language to ADB within 6 months from the end of the fiscal year. 25. To ensure the timely submission of audited project financial statements, PWD shall formally request the C&AG to include audits of the project in their yearly work plan. Unaudited project financial statements should be submitted to C&AG for audit within 3 months of the end of the fiscal year. The Rajasthan PWD shall inform AG (Rajasthan) about the requirements.6

26. The annual audit report for the project financial statements will include a management letter and auditor’s opinions, which cover (i) whether the project financial statements present an accurate and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting standards; and (ii) whether the proceeds of the loan were used only for the purpose(s) of the project. Internal audit continues to be undertaken by Rajasthan PWD and sample internal audits shall be conducted by Rajasthan PWD for at least 10% of the vouchers. 27. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor. 28. The government and Rajasthan PWD have been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements.7 ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the borrower), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures.

6 The audit of the ADB project account to be carried out by the Accountant General (Audit) Rajasthan as agreed with

the ADB, DEA and CAG vide letter No. 5/2/2010-ADB-1 dated 2nd September 2013 from the DEA, GOI.

7 ADB’s approach and procedures regarding delayed submission of audited project financial statements:

(i) When audited project financial statements are not received by the due date, ADB will write to the executing agency advising that (a) the audit documents are overdue; and (b) if they are not received within the next 6 months, requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed.

(ii) When audited project financial statements are not received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (a) inform the executing agency of ADB’s actions; and (b) advise that the loan may be suspended if the audit documents are not received within the next 6 months.

(iii) When audited project financial statements are not received within 12 months after the due date, ADB may suspend the loan.

17

29. Public disclosure of the audited project financial statements, including the auditor’s opinion on the project financial statements, will be guided by ADB’s Public Communications Policy 2011.8 After the review, ADB will disclose the audited project financial statements and the opinion of the auditors on the project financial statements no later than 14 days of ADB’s confirmation of their acceptability by posting them on ADB’s website.

8 Public Communications Policy: http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications

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VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

30. All advance contracting and retroactive financing will be undertaken in conformity with ADB Procurement Guidelines (2015, as amended from time to time) and ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. The borrower, the GOR, and the Rajasthan PWD have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the project. 31. Advance contracting. Advance contracting includes prequalification of contractors, tendering, and bid evaluation for all civil works packages; and recruitment of consultants. 32. Retroactive financing. Withdrawals from the loan account may be made for financing of eligible expenditures incurred under the investment program before the effective date, but not earlier than 12 months before the date of signing of the loan agreement, in connection with works, consulting services, and equipment, subject to a maximum amount equivalent to 20% of the loan amount. B. Procurement of Goods, Works, and Consulting Services

33. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines (2015, as amended from time to time). 34. International competitive bidding (ICB) procedures will be adopted for all contracts over $40 million for civil works and $0.5 million for goods. National competitive bidding may be used for contracts below these thresholds. Shopping can be used for goods with contract values lower than $100,000, as appropriate. As for the investment program, it is recommended that all civil works packages are procured under ICB procedures. This is for efficiency and simplification of procedures given that one package exceeds the threshold value of $ 40 million. 35. All consultants will be recruited according to ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).9 A project management consultant will be recruited to assist Rajasthan PWD in project implementation and capacity development. In addition, the Rajasthan PWD will recruit Independent Engineers and Road Safety Consultants for directly supervising all civil works under the terms of reference given in the concession agreement of annuity-based PPP projects or the EPC contracts. C. Procurement Plan

36. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Attachment B. 37. The procurement plan describes the threshold and review procedures of all procurement of goods, works and consulting services to be undertaken for the Investment Program The procurement plan will be updated at least once every 18 months or whenever change in the

9 Checklists for actions required to contract consultants by method available in e-Handbook on Project

Implementation at: http://www.adb.org/documents/handbooks/project-implementation/

19

procurement arrangements is required and agreed. D. Consultant's Terms of Reference

38. For the Project Management Consultant, an estimated 312 person-months (66 international, 246 national) of consulting services are required to (i) facilitate project management and implementation, and (ii) strengthen the institutional and operational capacity of the executing agency. Consulting firms will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality–cost ratio of 80:20. The EA may also engage individual consultants (independent engineers, road safety consultants, and safeguard advisors). Outline of the terms of reference of the PMC is in Attachment C.

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VII. SAFEGUARDS

39. Safeguards categorization under Tranche 1 are described in the table below.

Table 7: Safeguard categorization for Tranches

Environment Involuntary Resettlement Indigenous Peoples Tranche 1 B A C

Environmental Safeguards A.

40. The scope of works under Tranche 1 involves upgrading of existing and recently notified state highways through widening of existing roads into two lane or intermediate lane with shoulders. All 16 roads are outside any legally protected, eco-sensitive, or critical habitat areas. 10 Most of the adverse impacts are co-terminus with the construction stage, site-specific, limited within the right of way (ROW), and are mitigated through good engineering practice. Since the project roads are geographically dispersed, a state-level initial environmental examination (IEE) was drafted based on road-specific IEEs done during the feasibility study preparation and supplemented by external environmental expert site visits, consultations, and assessment. Each project road was subjected to environmental screening guided by the ADB’s rapid environmental assessment checklist, environmental baseline compiled including stakeholder consultations, impacts assessed, and concomitant mitigation and monitoring plans prepared. The costs of mitigation and monitoring plans for the construction phase are integrated in the civil works cost estimates. 41. Implementation arrangements for environment safeguards. The responsibilities of various agencies and parties for implementing environment safeguards are provided below.

(i) PPP Division of Rajasthan PWD will be the project management unit and responsible for the overall compliance ADB Safeguard Policy Statement 2009 and the applicable laws and rules under the Ministry of Environment, Forest and Climate Change. The PMU will have a safeguard officer-environment with a rank of executive engineer to coordinate with the project directors for PIUs to that ensure project implementation complies with the environmental assessment review framework and environmental management plan. The safeguard officer-environment is responsible for: Environmental screening and proposed categorization to reflect the significance of

potential impacts or risks that a proposed road might present, and advise feasibility for inclusion and identify the needed level of assessment;

Reviewing and approving all environment safeguards related documents such as IEE, monitoring reports, and due diligence prepared under the investment program with recommendations and clarifications from the PIUs and PMC where necessary;

Timely endorsement and signing of key documents and forwarding to the respective agency required for processing of forestry clearance, tree cutting permit, permission for groundwater extraction, etc., and disclosure on ADB and PWD websites;

10

Critical habitat according to the SPS is an area with high biodiversity value, including habitat required for the survival of critically endangered or endangered species; areas having special significance for restricted range species; sites that are critical for the survival of migratory species; areas supporting globally significant concentrations or numbers individuals of congregatory species; areas with unique assemblages of species or that area associated with key evolutionary processes or provide ecosystem services; and areas having biodiversity of significant social, economic or cultural importance to local communities.

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Ensure all contractors obtain permits, licenses, etc. for activities such as operation of asphalt plants, quarries, borrow areas, etc., before the implementation of the respective construction activity.

Taking proactive and timely measures to address any environment safeguards related challenges at the national or state level such as delays in processing of clearances during pre-construction stage and significant grievances (during construction stage)

(ii) Project implementation units (PIU). The project implementation unit through the PD will be responsible for supervising implementation of the environmental management plan (EMP) and environmental monitoring plan (EMOP) by the contractor through the following: Review all sub-plans identified in the EMP to be prepared by the Contactor to include

camp layout, waste/debris management plan, borrow area management plan, traffic management plan with guidance from the PMC;

Review monthly environmental monitoring reports prepared by the Contractor-EFC; Conduct monthly site and follow-up inspection to ensure the veracity of the submitted

monitoring reports and enforce the EMP and EMOP; Conduct compliance conference with the Contractor to discuss non-compliance and

agree on corrective measures with guidance from the PMC; and Recommend sanctions to the PMU-SOE in case of recalcitrant contractors.

(iii) Project Management Consultant (PMC). The main objective of Project Management Consultant is to support the project management unit (PMU) implements the environmental requirements of the Project by providing assistance in the monitoring of the EMP implementation by: Conduct environmental site induction training to all contractors and PIUs to ensure

understanding of the EMP and domestic environmental laws and regulations requirements particularly on the required clearances and permits, training on occupational and community health and safety, timely mobilization of the Contractor’s EFC, and review of sub-plans required in the EMP and advise the PIU on adequacy; 11

Ensure contractors secure necessary permits and clearances; Prepare environmental due diligence reports on EMP implementation needed for the

processing of subsequent tranches; Prepare an environmental monitoring report template for contractor’s self-monitoring

reports; Design quarterly and semi-annual compliance assessment checklist and report

formats for PMU and ADB review; Prepare annual environmental monitoring reports required by the ADB for public

disclosure; Preparing summary monthly, quarterly, and semi-annual monitoring reports from the

monthly environmental self-monitoring reports prepared by the Contractor’s EFC and reports for the review and guidance of the PMU and PIUs;

11

Site induction training includes but not limited to: i) discussion and review of EMP and EMoP detailing how specific environmental risks associated with their Scope of Work will be managed legal compliance, inspection and audits, and progress tracking and reporting; ii) environmental training and awareness needs shall be determined and documented via a training needs analysis prior to commencement; iii) Health and Safety Awareness Course, which details general environmental awareness and specific performance requirements expected on site; and iv) GRM.

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Advice the Contractor through the PMU and PIUs on how to comply with requirements and address non-compliances; and

Report apparent unanticipated impacts, recommend mitigation measures to be implemented by the PMU and update the IEE report.

(iv) Contractor. The Contractor is the principal agent to implement the EMP and EMOP during the pre- and during construction stage. Specifically, the contractor will:

Appoint the Contractor’s environment focal person and attend the site induction workshop to be organized by the PMC;

Obtain necessary environmental license(s), permits etc., from relevant agencies as specified by EARF (Table 3) for associated facilities for project road works, quarries, hot-mix plant etc. prior to commencement of civil works contracts;

Implement all mitigation measures in the EMP and activities in the EMOP; Submit monthly, quarterly, and annual self-monitoring reports to the PIU and PMU

with guidance from the PMC; Ensure that all workers, site agents, including site supervisors and management

participate in training sessions delivered by PIU; Ensure compliance with environmental statutory requirements and contractual

obligations; Collect the baseline data on environmental quality before the start of physical works

and continue collection as given in the EMOP during construction and operation; Participate in resolving issues as a member of the GRC; Respond promptly to grievances raised by the local community or any stakeholder

and implement environmental corrective actions or additional environmental mitigation measures as necessary; and

Based on the results of EMP monitoring, cooperate with the PIU to implement environmental corrective actions and corrective action plans, as necessary.

42. Ensuring implementation of environmental standards. The PMU will ensure that all environment safeguard requirements under the investment program will be implemented as required by the EARF and state-level IEE. Rapid environment assessment checklists will be completed for each project road including bridges and based on these checklists recommend environmental categorization based on ADB SPS 2009. The state-level IEE report must clearly present information and issues that may be unique to a district or geographic area or project road and all sensitive issues identified in the environment checklist must be clearly documented. The EMP and EMOP will be comprehensive and cover all environmental issues that may be expected during road construction and maintenance. Necessary provisions for this will be included in the bidding documents and accordingly the contractor will be required to include all costs for implementing the contract package specific EMP and EMOP. 43. The EMP is a plan for mitigating all anticipated environment impacts during project construction and operation. Specific mitigation measures with details on location, time and responsible agency for implementation is given in the EMP. The EMOP is a plan for monitoring various environment quality parameters and checking the effectiveness of the EMP. It comprises activities on testing the quality of air, water, noise through laboratory tests and physical monitoring of problems of soil erosion, tree plantations and habitat enhancement activities carried out and occupational health and safety issues. Quality testing of air, water and noise will be outsourced by the contractor to recognized and approved laboratories.

23

44. The PMC and PIU will conduct monthly monitoring of EMP and EMOP implementation and review monthly monitoring records maintained by the contractors. The PMU will also conduct on site monitoring and review of documents at quarterly and bi-annually and provide technical advice to enhance EMP implementation as necessary. 45. All required clearances, permits and licenses as applicable must be obtained by the Contractor with support from the project implementation unit (PIU) before start of construction works in the respective road sections. Permits, licenses etc. for activities such as operation of asphalt plants, quarries, borrow areas etc. must be obtained by the contractor before the implementation of the respective construction activity.

Table 8: Environmental Management Periodic Outputs, Deliverables, and Milestones during Construction Phase

Activity Responsibility Outputs Deliverable to ADB

Period

Appointment of

Contractor Focal

Person (C-EFC)

Contractor and

PMC

Appointment letter

submitted to PWD

through PMC

Included in annual

monitoring report

At least 45 days

before start of

construction

Site induction

training of

contractors

PMC Training materials and

training proceedings

Included in annual

monitoring report

At least 30 days

before start of

construction

Monthly

I) Environmental

self-monitoring

report

II) Site inspection

report

III) Site inspection

Contractor

PMC

PIU

Completed checklist

submitted to PMC and

PIU

Inspection report and

summary T1-level

monitoring report

submitted to PIU and

PMC

None

Key findings

Included in annual

monitoring report

Monthly starting

from

commencement

date

Quarterly

i) Compliance

monitoring

report

ii) Site inspection

PMC

Summary T1-level

submitted to PMU,

summary package level

submitted to respective

PIU

None

Key findings

included in annual

monitoring report

3 months after

commencement

date

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Semi-annual

i) Compliance

monitoring

report

ii) Site visit

iii) Refresher

training on EMP

PMC

PMU

PMC

Submitted to PMU

Training proceedings

submitted to PIU and

PMU

First semi-annual

compliance

monitoring report

submitted to ADB

for information and

review

Inspection 6

months after

commencement

date, report no

later than 7

months after

Annual

i) Annual

Monitoring

report

ii) Site inspection

PMC

PMU

Submitted to PMU Submitted to ADB

for review and

disclosure on ADB

and PWD website

No later than 13

months after

commencement

Environmental Due

Diligence

PMC Submitted to PMU Submitted to ADB Processing of

Tranche 2 EMP= environmental management plan, PIU= project implementation unit, PMC= project management consultant, PMU= project management unit, PWD= Public Works Department. Source: Government of Rajasthan.

Social Safeguards B.

46. For the entire investment program, a resettlement framework has been prepared in accordance with (i) the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which is effective from January 1, 2014 (hereinafter called LA Act 2013); (ii) State laws and regulations; and (iii) ADB SPS. Displaced persons (titleholders and non-titleholders) will be compensated at replacement cost and rates for different categories of loss and special assistance are detailed in the entitlement matrix of the resettlement plans. Rajasthan PWD will employ NGO to help to facilitate land acquisition and resettlement and rehabilitation activities. If during implementation of the facility, any modification or additional land requirement or involuntary resettlement impacts are identified, a related resettlement plan will be prepared or modified in accordance with the applicable laws referred to in the RP, and prior approval of ADB will be obtained before any further implementation of the relevant section of the subproject. The resettlement specialist of the PMC will update the RP with input from the NGO.

47. Rajasthan PWD will adhere to ADB SPS objectives, which are: (i) to avoid involuntary resettlement wherever possible; (ii) to minimize involuntary by exploring design alternatives; (iii) to enhance or at least to restore, the livelihood of all displaced persons in real terms relative to pre-project levels; and (iv) to improve the standards of living of the displaced poor and other vulnerable groups. Specifically, Rajasthan PWD will (i) implement the project in accordance with the resettlement plans; (ii) ensure that all displaced persons should be paid compensation and assistance prior to physical and economic displacement; (iii) ensure that land that is free of encumbrance can be handed over to the concessionaries/contractors and for areas where there are displaced persons (titleholders and non-titleholders), the relevant compensation and assistance must be fully paid before affected households can be displaced; (iv) ensure that civil works can only start after the relevant sections have been declared free of encumbrance; (v) undertake continued meaningful consultation; (vi) establish efficient grievance redress mechanisms in accordance with the resettlement plans to assist affected persons to resolve grievances and complaints in a timely manner; and (vii) submit semi-annual monitoring reports

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to ADB on the implementation of the resettlement activities. 48. If negotiated settlement takes place, comprehensive consultations with the affected households will have to be undertaken and the government will ensure that negotiation is undertaken without coercion and documented in a transparent manner. For negotiated settlement, displaced household will be paid as per the entitlement matrix. An independent monitor will be engaged to verify and certify the process has been done as per Resettlement Framework (RF). If negotiated settlement fails, land will be acquired as per the (i) the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; (ii) state laws and regulations; and (iii) ADB SPS. 49. The responsibilities of respective parties and agencies on implementing the social safeguards are given below:

(i) The jurisdictional Additional Collector will be the administrator for land acquisition, resettlement and rehabilitation (LARR). The jurisdictional Additional Collector being the competent authority for land acquisition, will also look into resettlement and rehabilitation and s/he will be supported by the Project Director, PIU in implementing the RPs. (ii) Project management unit. The PPP Division, Rajasthan PWD will be the Project Management Unit (PMU) and will be overall in charge of coordination between the seven Project Implementation Units (PIU) and in project selection for subsequent tranches. The PMU will have a safeguards officer (SO) in the rank of executive engineer or a social development and resettlement specialist hired on contract basis, who will coordinate with the PD, PIUs and ensure that road subprojects under the investment program are in compliance with the RF and in identifying likely safeguard issues. The SO at the PMU will have the following responsibilities: Assess the capacity of the PIU in identifying and managing social safeguard issues

and facilitate capacity building of PIU officers and RP implementation support NGO; Review and update RF as and when there are changes in the applicable law; Review whether the PIUs have taken efforts to avoid or minimize involuntary

resettlement impacts during the subproject design stage and during implementation stages;

Verify whether the resettlement plan has been prepared and is commensurate to the significance of the impact and whether the documents have been submitted along with the detailed project report;

Facilitate coordination between various government departments in land acquisition and implementation of the RP;

Carry out periodic review of the progress on RP implementation and ensure that the progress reports are submitted in a timely manner;

Verify whether the PIUs are handing over the land free from encumbrance as stipulated in the contract document;

Consolidate the progress reports received from the respective PIUs and submit the quarterly progress reports to ADB and any other information as required by ADB in a timely manner; and

Initiate engagement of an external monitor/agency to undertake semi-annual monitoring of the subprojects, either through the PMU or PIU, and submit the semi-annual monitoring report to ADB along with PMU/PIU’s response to the comments/observations made in the report.

26

(iii) Project implementation unit. The PIU will be responsible for screening subprojects, categorization based on involuntary resettlement impacts, conducting the social assessment, preparation and implementation of resettlement plans. The road subprojects will be implemented by the jurisdictional PIU. The PD, PIU will be responsible for subproject compliance to social safeguards and concurrent internal monitoring of RP implementation. The following will be the responsibility of the PD, PIU: Review involuntary resettlement impact categorization checklist, subproject appraisal

note and undertake field visits wherever required and advise the field units about the social safeguards documentation required for subprojects;

Review RP prepared by the DPR consultants and finalize the same; Ascertain the extent of private land to be acquired and extent of government to be

transferred and liaison with the jurisdictional Additional Collector and concerned government departments in getting possession of the same;

Initiate engagement of an RP implementation support NGO to assist the field units in RP implementation;

Review and approve micro plans, containing the list of displaced persons and their entitlements, prepared by field units;

Obtain necessary approval for the micro plans and make necessary funds available for disbursement and for development of resettlement sites;

Coordinate with Additional Collector and field units in identifying suitable land for resettlement sites and monitor the progress of development of site and relocation of displaced persons;

Undertake internal monitoring of the progress made in RP implementation and take necessary corrective actions, if required; and

Review and consolidate the LA and RP implementation progress reports submitted by the jurisdictional Additional Collector, RP implementation support NGO, and submit monthly progress report to PMU;

(iv) NGO/Agency for RP implementation support. The implementation of the Resettlement and Rehabilitation provisions will be carried out by jurisdictional Additional Collector with the support of the PIU. The PIU will engage an implementation support NGO, with experience in implementing RPs and in working on similar infrastructure development projects. The NGO should have proven experience in carrying out resettlement and rehabilitation activities and community development and consultations in projects of similar nature, preferably in Rajasthan or in any state. The NGO will play a key role in the implementation of the RP. Their tasks will include the final verification of DPs, consultations, establishment of support mechanisms and facilitate the delivery of rehabilitation assistance as per the RP provisions and to ensure that the DPs receive all the entitlements as per the R&R policy of the project. (v) Concessionaire/Contractor: Ensure that civil works only starts on the relevant section after it has been declared free of encumbrance. Coordinate closely with the NGO, and be responsive to address relevant grievances.

(vi) Resettlement Specialist, PMC: Conduct regular site-level monitoring, providing technical advice to the RPWD and NGO to enable smooth implementation of the RPs. When updating of the RPs and other planning documents is necessary, ensure that a high quality of documentation is prepared with accurate data as provided by NGO. Prepare monitoring reports on a semi-annual basis. Act as the external monitor for the

27

Project and provide any other necessary technical support to the safeguard focal person at the site level as well as RPWD, NGO and other relevant stakeholders.

50. Tranche 1. The tranche is classified as category A under ADB’s SPS. Four RPs have been prepared corresponding with each of the four procurement packages. The RPs have been prepared in accordance with the Resettlement Framework. 237 hectares of private land will be acquired affecting impacting 781 private structures. In total, 2,994 households comprising of 18,411 persons will be impacted, out of which 1,292 households will experience economic displacement, and 217 households will experience physical displacement. The budget for land acquisition and resettlement will be provided by the RPWD in a timely manner. 51. Preparation of subsequent tranches or unanticipated impact. For preparation of subsequent tranches, the PMC will be responsible for carrying out due diligence on the ongoing subprojects. RPWD will be responsible for initial road selection. The DPR consultants will conduct land acquisition planning and social impact assessment. All of the affected households will need to be covered. A resettlement plan will need to be prepared for projects with impact. Civil works cannot commence on all roads until the ROW is free of encumbrance, meaning that the affected households must be fully compensated and/or assisted prior to dismantling or relocation. RPWD will engage an individual consultant to support the preparation of resettlement planning documents.

Indigenous Peoples C. 52. For the entire investment program, an indigenous peoples planning framework has been prepared in accordance with (i) Government of India and State laws and regulations; and (ii) ADB SPS. Subprojects that will have significant impact on indigenous peoples and categorized as A under ADB SPS’ Indigenous Peoples Safeguard will not be included for financing. 53. Tranche 1 is classified as category C under ADB’s SPS for indigenous peoples. A number of indigenous people’s households will be impacted by involuntary resettlement. The census found that these households are not distinctive because they have integrated with the dominant population of the project area. Tribal groups in the subproject areas freely interact with the outside community. Special attention should be paid to indigenous people’s household during the implementation of resettlement activities. Rajasthan PWD should ensure continuous consultation and proper disclosure of project information. If any unanticipated adverse impacts are identified during project implementation, the Rajasthan PWD with assistance from the NGO and PMC will devise proactive measures to ensure indigenous peoples households will not be adversely impacted by the project.

Grievance Redress Mechanism D. 54. Grievance redressal committee (GRC) will be established at two levels, one at the district and another at PMU, to receive, evaluate and facilitate the resolution of displaced persons concerns, complaints and grievances. The GRC is aimed to provide a trusted way to voice and resolve concerns linked to the project, and to be an effective way to address displaced person’s concerns without allowing it to escalate, resulting in delays in project implementation. The GRC will aim to provide a time-bound and transparent mechanism to voice and resolve social and environmental concerns linked to the project. The GRC is not intended to bypass the government’s built-in-redressal process, nor the provisions of the statute, but rather it is intended to address displaced persons’ concerns and complaints promptly, making it readily accessible to all segments of the displaced persons and is scaled to the risks and impacts of the

28

project. 55. The GRC should be formed during project preparation as project affected people may already have complaints during that stage. The GRC will continue to function, for the benefit of the DPs, during the entire life of the project including the defects liability period. The response time prescribed for the GRCs would be four weeks. 56. First Level of GRC: The district level GRCs will function out of each district where the subprojects are being implemented. The GRC will be chaired by District Collector, as its Chairman, and the members will comprise of the PD, PIU, PWD as member secretary and a local person of repute and standing in the society. The District Collector will nominate the local person and the PIU, PWD will be the secretariat of the GRC. 57. Second Level GRC: The Project Director, PMU will be the appellate authority who will be supported by the Superintending Engineer, PMU, and PWD.

Capacity Development E. 58. Rajasthan PWD has the capacity to implement safeguard activities as it has experience in implementing projects financed by other development banks. During the inception mission, ADB will provide training to orient all RPWD staff involved in implementing safeguard planning documents and relevant stakeholders. PMC experts will provide continued capacity development of RPWD staff and advise RPWD and NGO during implementation. In addition, RPWD will engage two individual consultants (one social, one environment) to maintain quality control of safeguard planning documents required for subsequent tranches as well as provide hands-on support to RPWD when required.

Prohibited Investment Activities F. 59. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS), ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. 12

12

Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf

29

VIII. GENDER AND SOCIAL DIMENSIONS

Gender A.

60. The project is categorized as “Some Gender Elements” per Guideline for Gender Mainstreaming Categories of ADB Projects.13 A gender action plan is not required but proactive features for Tranche 1 are included in Table 8.

Table 8: Proactive Gender Features for Tranche 1

Proactive Feature Implementation Monitoring Constructing bus stop shelters with locations being finalized after community consultations; raised sidewalk and hard shoulder that will be beneficial to pedestrians, elderly, women, and children

Contractor/ Concessionaire

PMC

Integrating road safety features for the elderly, women, children, and people with disabilities into road design such as proper signage, and marked crossings throughout the alignment

Contractor/ Concessionaire

PMC

Conducting road safety and safe mobility campaigns in affected communities, targeting 50% women

NGO PMC

Undertaking awareness building sessions for HIV/AIDS, basic health and hygiene, and human trafficking to project affected villages targeting at least 50% women

NGO with assistance from

specialized agencies

PMC

Encouraging civil works contractors to engage women workers as wage laborers and ensuring equal pay for equal work

Contractor/ Concessionaire

PMC

NGO= non-governmental organization, PMC= project management consultant Source: Government of Rajasthan.

61. The PMC will ensure that the designs of physical infrastructure with gender considerations are incorporated into design and monitor the employment of women in civil works. The NGO will be responsible for conducting awareness building trainings, utilizing the training of trainer model to ensure sustainability. A special effort will be made to train women as trainers. 62. Provisions are in the bidding documents for the concessionaires/contractors to ensure that all applicable labor laws will be complied including not employing child labor for construction; encourage employment of the poor, particularly women; and not differentiate wages between men and women for work of equal value. The above measures will be implemented by the civil works contractor or NGO and monitored by the PMC.

Health B. 63. Rajasthan PWD shall ensure that civil works contractors provide adequately for the health and safety of construction workers and further ensure that bidding documents include measures on how contractors will address this, including an information and awareness raising campaign for construction workers on sexually transmitted diseases, HIV/AIDS, and human trafficking. For affected villages, the NGO will undertake awareness building sessions in

13

http://www.adb.org/documents/guidelines-gender-mainstreaming-categories-adb-projects

30

HIV/AIDs, basic hygiene and human trafficking. The PMC will monitor.

Labor C. 64. The State and Rajasthan PWD will ensure that works contracts under the project follow all applicable labor laws of the Government and the State and that these further include provisions that contractors; (i) carry out HIV/AIDS awareness programs for labor and disseminate information at work sites on risks of sexually transmitted diseases and HIV/AIDS as part of health and safety measures for those employed during construction; and (ii) follow and implement all statutory provisions on labor (including not employing or using children as labor, equal pay for equal work), health, safety, welfare, sanitation, and working conditions. Such contracts shall also include clauses for termination in case of any breach of the stated provisions by the contractors.

31

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION

A. Project Design and Monitoring Framework 65. The design and monitoring framework (DMF) for the investment program is in Schedule 2 of the Financing Framework Agreement of the Investment Program; for Tranche 1 it is attached to first Periodic Financing Request. B. Monitoring 66. Project performance monitoring. The achievement of the project performance targets will be assessed following the DMF. EA and PIUs, assisted by the PMC and other consultants as required; will establish and assist with the implementation of a project performance management system (PPMS). PPMS will include detailed methodology of data collection and analysis ensuring statistical validity, isolation of compounding factors and comparison with baseline and control data. As a minimum, the indicators will be monitored before and after construction/project, both on the subprojects and control roads. Disaggregated baseline data for output and outcome indicators gathered during project processing will be updated and reported quarterly through the executing agency's quarterly progress reports and after each ADB review mission. These quarterly reports will provide information necessary to update ADB's project performance reporting system.14 67. Indicators to be monitored may include, but not be limited to the following: (i) number of newly connected habitations (total, by districts, and size); (ii) length of roads constructed/upgraded (total, by district, by habitation size, terrain, etc); (iii) traffic volume and travel time on constructed roads; (iv) periods of construction (by road length, terrain, etc), amounts and frequencies of variation orders, frequencies and durations of holding up of civil works by rural communities (by causes, including instances of holding up of civil works due to the omissions in design); (v) pavement condition index on project roads; (vi) percentage of detailed design undergoing road safety audits (RSAs) and amendments following RSA’s recommendations; (vii) percentage of existing roads undergoing RSAs and percentage of existing roads improved following RSA recommendations; and (viii) progress of capacity development. 68. Compliance monitoring. Compliance with loan covenants will be monitored through ADB’s project administration missions–including project inception mission to discuss and confirm the timetable for compliance with the loan covenants; project review missions to review compliance with particular loan covenants and, where there is any noncompliance or delay, discuss proposed remedial measures with the EAs; and mid-term review mission if necessary to review covenants to assess whether they are still relevant or need to be changed, or waived due to changing circumstances. 69. Safeguards monitoring. Implementation of the EMP, RP, and social mitigation measures will be monitored internally by the PIU, and externally by the PMC. 70. Environment safeguard monitoring. Records on implementation of the mitigation measures on site will be maintained by the contractor. Based on these records and spot checks

14

ADB's project performance reporting system is available at http://www.adb.org/Documents/Slideshows/PPMS/default.asp?p=evaltool

32

of at least once a month by the PIU and PMC, monitoring reports will be compiled on a quarterly basis. These quarterly monitoring reports will further be compiled into a semi-annual report for category A tranches and annual monitoring report for category B tranches to be submitted to ADB for disclosure on the ADB website. If there are any changes in the design or alignment, the EMP of the respective subproject will be updated to account for any additional or new environmental impacts. Further the need for revising the respective EIA or IEE report will also be reviewed and confirmed in discussion with ADB. 71. Social safeguard monitoring. The external monitor will be responsible for overall external monitoring and evaluation of the progress of resettlement implementation. The external monitor will monitor and verify RP implementation to determine whether resettlement goals have been achieved, livelihood and living standards have been restored, and provide recommendations for improvement. The external monitor will undertake biannual monitoring during the R&R implementation period. Monitoring will also ensure recording of DPs’ views on resettlement issues such as: DPs’ understanding of entitlement policies, options, and alternatives; site conditions; compensation valuation and disbursement; grievance redress procedures; and staff competencies. The external monitor will also evaluate the performance of the NGOs and report its findings simultaneously to the RPWD. The reporting responsibility of ADB lies with the PWD; the monitoring reports will be sent to ADB semi-annually. For subprojects will have significant adverse safeguard impacts, the resettlement specialist of the PMC will be the external monitor. An important function of the external monitoring expert is to advise the PWD on safeguard compliance issues. If significant non-compliance issues are identified, the PWD is required to prepare a corrective action plan to address such issues. The PWD will document monitoring results, identify the necessary corrective actions, and reflect them in a corrective action plan. The PWD, in each quarter, will study the compliance with the action plan developed in the previous quarter. Compliance with loan covenants will be screened by the PWD. 72. Gender and social dimensions monitoring. Compliance will be monitored by the PMC and a chapter will be included in the semi-annual social monitoring report. C. Evaluation 73. An ADB inception mission will be fielded soon after the legal agreements for the investment program and each project are declared effective; thereafter, regular reviews will follow at least annually. As necessary, special loan administration missions and a midterm review mission will be fielded, under which, any changes in scope or implementation arrangements may be required to ensure achievement of project objectives. GOR at the state level and PWD at the project level will monitor the implementation of the investment program in accordance with the schedule and time-bound milestones, and keep ADB informed of any significant deviations that may result in the milestones not being met. Within 6 months of physical completion of each of the projects under the investment program, PWD will submit a project completion report to ADB.15 D. Reporting 74. The executing agency will provide ADB with (i) quarterly progress reports in a format

15

Project completion report format is available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public- Sector-Landscape.rar

33

consistent with ADB's project performance reporting system;16 (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions, (c) updated procurement plan, and (d) updated implementation plan for the next 12 months; and (iii) a project completion report within 6 months of physical completion of the project. To ensure that projects will continue to be both viable and sustainable, project accounts and the executing agency audited financial statements together with the associated auditor's report, should be adequately reviewed. E. Stakeholder Communication Strategy 75. Salient information regarding the project, including scope, general progress status, beneficiaries, invitations for bid and consultant recruitment notices, will be provided to the general public. The information will be made available and updated through the official website of RPWD. The safeguard documents, i.e. IEE, EMPs, and RPs will be posted on ADB's website. RPWD will provide relevant information, including those from the above documents, in a timely manner, in an accessible place and in a form and languages understandable to the displaced people and other stakeholders including through their website. If the displaced people are illiterate other appropriate communication methods will have to be used. The resettlement implementation NGO will play a key role in facilitating ongoing consultation and information disclosure with affected people. 76. ADB’s communication strategy is summarized in the table below.

Table 9: Documents for Disclosure

Project Document Means of

Communication Frequency Audience Project Data Sheet (PDS)

ADB website Initial PDS no later than 30 calendar days from approval of

the concept paper; every 6 months update afterwards

General Public

Design and Monitoring Framework (DMF)

ADB website draft DMF after fact-finding mission

General Public

Initial Environmental Examination (IEE) and Environmental Management Plan (EMP)

ADB and RPWD websites

Prior to ADB Management approval

General Public, project-affected

people in particular

Resettlement Plan ADB and RPWD websites

Prior to ADB Management approval

General Public, project-affected

people in particular

Summary Poverty Reduction and Social Strategy (SPRSS)

ADB website Prior to ADB Management approval

General Public, project-affected

people in particular

Legal Agreements ADB website no later than 14 days of Board approval of the project

General Public

Facility Administration

ADB website After loan negotiations General Public

16

ADB's project performance reporting system is available at http://www.adb.org/Documents/Slideshows/PPMS/default.asp?p=evaltool

34

Project Document Means of

Communication Frequency Audience Manual Environment Monitoring Report

ADB website Annually General Public, project-affected

people in particular

Social Monitoring Reports

ADB website Semi-annually General Public, project-affected

people in particular

Source: Asian Development Bank.

35

X. ANTICORRUPTION POLICY

77. The Government, States and IAs are advised of ADB's Anticorruption Policy (1998, as amended to date). Consistent with its commitment to good governance, accountability and transparency, implementation of the Projects under the Facility shall adhere to ADB's Anticorruption Policy. ADB reserves the right to review and examine directly or through its agents, any alleged corrupt, fraudulent, collusive, or coercive practices relating to the Projects under the Facility.17 In this regard, investigation of Government officials, if any, would be requested by ADB to be undertaken by the Government. To support these efforts, relevant provisions of ADB's Anticorruption Policy are included in the Loan Regulations and the bidding documents. In particular, all contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the SEAs and all contractors, suppliers, consultants, and other service providers as they relate to the Projects under the Facility. Individuals and/or entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the investment program.18 78. RPWD shall ensure that its website provide updated, detailed information on implementation of the investment program, specifically procurement related information, including the list of participating bidders, name of the winning bidder, basic details on bidding procedures adopted, amount of each contract awarded, and adequate details of the goods, works and consulting services procured for the investment program.

17

Anticorruption Policy: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 18

ADB's Integrity Office web site: http://www.adb.org/integrity/unit.asp

36

XI. ACCOUNTABILITY MECHANISM

79. People who are, or may in the future be, adversely affected by the investment program may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make an effort in good faith to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.19

19

Accountability Mechanism. http://www.adb.org/Accountability-Mechanism/default.asp.

37

XII. RECORD OF CHANGES TO THE FACILITY ADMINISTRATION MANUAL

80. All revisions and/or updates during the course of implementation should be retained in this section to provide a chronological history of changes to implementation arrangements recorded in the FAM, including revision to contract awards and disbursement s-curves.

Attachment A of FAM

List of Project Roads under Tranche 1 (km)

km = kilometer Source: Government of Rajasthan

Package

State Highway /

MDR Number Name of the Road

Subproject Existing Length

Design Length

Length Bypassed

Project Length

Package

1

SH-74 Kanwas - Aklera 75.220 74.820 5.200 80.020

SH-74 A Deoli - Kanwas 15.000 14.850 14.850

SH-19 C Alot - Gangdhar - Suwasara

24.600 24.550 24.550

SH-22 Kherli - Pahari 61.150 61.160 61.160

Subtotal Package 1 175.970 175.380 5.200 180.580

Package 2

SH-16 Barmer - Sindhari - Jalore

148.009 148.090 0 148.090

SH-16 Sanderao - Bali - Mundara

30.500 29.420 0 29.420

Subtotal Package 2 179.000 177.510 0 177.510

Package 3

MDR-103 Peelibanga - Lakhuwali 34.533 34.548 0 34.548

SH-6A Sardarsher - Lunkaransar

76.500 75.800 75.800

SH-69 Churu - Bhaleri 35.000 34.800 34.800 SH-60 Sanju - Tarnau 16.700 16.710 0 16.710

SH-100 Roopangarh - Naraina 35.135 34.792 0 34.792

SH-19, SH-60, SH-20, SH-83, SH-8, SH-82 and SH-82-A

Nagaur - Tarnau - Deedwana -Mukundgarh

199.903 196.00 15.586 210.415

Subtotal Package 3 397.771 392.650 15.586 407.065

Package 4

SH-13B Singhana - Buhana - Haryana Border

34.017 32.69 1.500 34.190

SH-13 Ajeetgarh - Chala 33.136 33.135 33.135

SH-20 & 20 A Sikar-Ganeri-Jaswantgarh

74.037 75.130 8.130 83.260

SH-20 Bidasar-Nokha 93.000 93.000 93.000

Subtotal Package 4 234.19 233.955 9.630 243.585

Grand Total 986.931 979.495 29.245 1008.740

Attachment B of FAM

PROCUREMENT PLAN

Basic Data

Project Name: Rajasthan State Highway Investment Program Project Number: 49228-001 Approval Number: Country: India Executing

Agency: Rajasthan Public Works Department

Project Procurement Classification: Category A Implementing Agency: N/A

Project Procurement Risk: High Project Financing Amount: US$ 1,415,000,000

ADB Financing: US$ 500,000,000 Cofinancing (ADB Administered): Non-ADB Financing: US$ 915,000,000

Project Closing Date:

Date of First Procurement Plan: 29 February 2016 Date of this Procurement Plan:

29 February 2016

A. Methods, Thresholds, Review and 18-Month Procurement Plan 1. Procurement and Consulting Methods and Thresholds

Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works Method Threshold Comments

International Competitive Bidding for Works US$ 40,000,000 and Above

International Competitive Bidding for Goods US $10,000,000

National Competitive Bidding (NCB) for Works Beneath that stated for ICB, Works

National Competitive Bidding for Goods Beneath that stated for ICB, Goods

Shopping for Works Below $100,000

Shopping for Goods Below $100,000

2. Goods and Works Contracts Estimated to Cost $1 Million or More

The following table lists goods and works contracts for which the procurement activity is either ongoing or expected to commence within the next 18 months.

Package Number General Description Estimated

Value Procurement

Method Review (Prior/ Post)

Bidding Procedure

Advertisement Date

(quarter/year) Comments

1 Kanwas-Aklera of SH74/ Deoli-Kanwas/ Alot-Gangdhar-Suwansara/Uniara-Indragarh

93,000,000.00

ICB Prior 1S1E Q4 / 2015 Prequalification of Bidders: Y Domestic Preference Applicable: N

Attachment B of FAM

Advance Contracting: Y Bidding Document: Large Works

2 Barmer-Sindari-Jalore of SH16/Ahore-Bali-Mundra (Sanderao to Mundra) of SH16

124,000,000.00

ICB Prior 1S1E Q1 / 2016 Prequalification of Bidders: Y Domestic Preference Applicable: N Advance Contracting: Y Bidding Document: Large Works

3 Peelibanga-Lakhuwali of MDR103/Sardarshahar-Loonkaranshar of SH6A/Churu-Bhaleri of SH69/Sanju-Tarnau of SH60/Roopangarh-Naraina of SH100/Nagaur-Tarnau-Deedwana-Mukundgarh of SH8, 19, 60, 82-A & 83

241,000,000.00

ICB Prior 1S1E Q1 / 2016 Prequalification of Bidders: Y Domestic Preference Applicable: N Advance Contracting: Y Bidding Document: Large Works

4 Development & Maintenance of Sikar-Nokha Section of Sh-20, Singhana-Buhana Section of SH-13B, and AJeet Garch-Chala Section of Sh-13

70,000,000.00

ICB Prior 1S1E Q1 / 2017 Prequalification of Bidders: N Domestic Preference Applicable: N Advance Contracting: Y

Attachment B of FAM

Bidding Document: Large Works Comments: Engineering, Procurement & Construction (EPC) mode

3. Consulting Services Contracts Estimated to Cost $100,000 or More

The following table lists consulting services contracts for which the recruitment activity is either ongoing or expected to commence within the next 18 months.

Package Number General Description Estimated

Value Recruitment

Method Review (Prior/ Post)

Advertisement Date

(quarter/year) Type of

Proposal Comments

1 Project Management

Consultants

$4.2 million QCBS Prior Q1/2016 full 80:20

4. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services

Contracts Less than $100,000 (Smaller Value Contracts)

The following table lists smaller-value goods, works and consulting services contracts for which the activity is either ongoing or expected to commence within the next 18 months.

Goods and Works Package Number

General Description

Estimated Value

Number of Contracts

Procurement Method

Review (Prior/ Post)

Bidding Procedure

Advertisement Date (quarter/year) Comments

None Consulting Services

Package Number

General Description

Estimated Value

Number of Contracts

Recruitment Method

Review (Prior/ Post)

Advertisement Date

(quarter/year) Type of

Proposal Comments

None B. Indicative List of Packages Required Under the Project

The following table provides an indicative list of goods, works and consulting services contracts over the life of the project, other than those mentioned in previous sections (i.e., those expected beyond the current period).

Attachment B of FAM

Goods and Works

Package Number General Description

Estimated Value

(cumulative)

Estimated Number of Contracts

Procurement Method

Review (Prior/Post)

Bidding Procedure Comments

Development and

maintenance of state

highways

$961 million 4-6 ICB Prior ISIE PPP Annuity Model

with prequalification

Development and

maintenance of state

highways

$323 4-6 ICB Prior IS2E EPC Contracts

Consulting Services

Package Number General Description

Estimated Value

(cumulative)

Estimated Number of Contracts

Recruitment Method

Review (Prior/Post)

Type of Proposal Comments

None

C. List of Awarded and On-going, and Completed Contracts The following tables list the awarded and on-going contracts, and completed contracts.

1. Awarded and On-going Contracts Goods and Works

Package

Number

General

Description

Estimated

Value

Awarded

Contract

Value

Procureme

nt Method

Advertise

ment

Date

(quarter/

year)

Date of ADB

Approval of

Contract

Award11

Comments12

Attachment B of FAM

Consulting Services

Package

Number

General

Description

Estimated

Value

Awarded

Contract

Value

Recruitment

Method

Advertisement

Date

(quarter/year)

Date of ADB

Approval of

Contract

Award11

Comments13

2. Completed Contracts

Goods and Works

Package

Number

General

Description

Estimated

Value

Contract

Value

Procurement

Method

Advertise

ment

Date

(quarter/

year)

Date of

ADB

Approval

of

Contract

Award11

Date of

Completion14

Comments

Consulting Services

Package

Number

General

Description

Estimated

Value

Contract

Value

Recruitment

Method

Advertisement

Date

(quarter/

year)

Date of

ADB

Approval

of

Contract

Award11

Date of

Completion14

Comments

D. Non-ADB Financing The following table lists goods, works and consulting services contracts over the life of the project, financed by

Non-ADB sources.

Attachment B of FAM

Goods and Works

General Description

Estimated

Value

(cumulative)

Estimated

Number of

Contracts

Procurement

Method Comments

Consulting Services

General Description

Estimated

Value

(cumulative)

Estimated

Number of

Contracts

Recruitment

Method Comments

Independent Engineers $2.4 million 8-10 Firm

Road Safety Consultants $1.2 million 8-10 Firm

Safeguards Advisors $0.5 million 2-3 Individual

Attachment C of FAM

TERMS OF REFERENCE FOR PROJECT MANAGEMENT CONSULTANT

A. Background

1. The Government of India has applied for financing from Asian Development Bank (ADB) for improving priority state road network in Rajasthan state. Public Works Department (PWD), Government of Rajasthan (the Client) has initiated Rajasthan State Highway Development Program (RSHDP) which aims to improve about 20000 kilometers (km) of state highways and major district roads (MDR) to 2-lane or intermediate lane standard. 2. As part of the RSHDP, about 2,000 km of state highways and major district roads have been included under ADB financial assistance, as Rajasthan State Highways Investment Program (RSHIP) to improve the efficiency and safety of road transport in the state of Rajasthan. 3. RSHIP shall be implemented through Public-Private Partnership Division. The client has decided to engage a project management consultant (PMC) using the proceeds of the ADB financing in implementing the road improvement works efficiently. 4. The project roads are to be constructed under two modalities, i.e. under annuity mode and under EPC mode. Out of 2000 km of road sections proposed to be developed under ADB financial assistance, nearly 1000 km have been identified under Tranche 1; about 750 km roads are under the annuity mode and the rest in EPC mode. Subsequently, roads under Tranche-2 will be identified and informed to the selected PMC. 5. The main objective is to support the PPP Division of Public Works Department, Government of Rajasthan to implement the RSHIP.

B. Scope of Services

6. The scope of PMC services are broadly categorized into 6 dimensions, i.e. (i) to assist the Client in monitoring the implementation progress of concession(s)/ contract(s) for upgrading of state highways which are being developed with financial assistance from ADB, in terms of physical progress, financial progress, safeguard actions, and other related aspects, (ii) preparing the progress reports for the client as required by State Government of Rajasthan, Government of India, and ADB, (iii) advising the client proactively on managing the implementation schedule and addressing potential issues, (iv) prepare the documents as required for the client to submit the subsequent periodic financing requests (PFRs) to ADB in order to timely secure further funding for the investment program, (v) develop a project performance monitoring system (PPMS) appropriate for the PPP/EPC projects being implemented by the client and in accordance with the international best practices, and (vi) other related works as requested by the client. The project roads finalized by PWD in consultation with ADB under different Packages of Tranche 1 are shown below:

Package 1 (Under Annuity Mode)

S.

No. Road Section SH/MDR Length in

Km 1. Kanwas –Khanpur- Aklera SH-74 74.80 2. Deoli - Kanwas SH-74 A 14.85

2

3. Alot (MP) –Gangdhar- Suwansara (MP) SH-19C 24.55 4. Kherli - Pahari SH-22 61.16 Total 175.36

Package 2 (Under Annuity Mode)

S.

No. Road Section SH/MDR Length in

Km 1. Barmer – Sindari-Jalore SH-16 148.0 2. Ahore – Bali- Mundara (Sanderao-Mundara) SH-16 30.0 Total 178.0

Package 3 (Under Annuity Mode)

S. No.

Road Section SH/MDR Length in Km

1. Peelibanga - Lukhuwali MDR-103 34.5 2. Sardarshahar-Loonkaransar SH-6 A 76.5 3. Churu - Bhaleri SH-69 35.0 4. Sanju-Tarnau SH-60 16.71 5. Roopangarh - Naraina SH-100 35.0 6.

Nagaur – Tarnau- Deedwana-Mukundgarh SH-8, 19,

60, 82 A, 83 196.0

Total 393.71

Package 4 (Under EPC Mode)

S. No.

Road Section SH/MDR Length in Km

1. Ajeetgarh - Chala SH-13 33.14 2. Sikar - Nokha SH-20, 20 A 190.3 3. Singhana – Buhana-Haryana Border SH-13 B 32.64 Total 256.08

C. Implementation Arrangements

7. The executing agency for the investment program is the Government of Rajasthan through its PWD. The PPP Division of PWD, headed by the Additional Chief Engineer (PPP), will establish project implementation units (PIU) for contract packages of project roads in the same area.

D. Detailed Tasks

8. Task 1: Project Management Support

(i) Review, monitor and advise on the implementation of PPP concessions/ EPC Contracts, including advising the client on the use of the bidding documents and concession/ EPC agreement, advising the independent engineer/ authority engineer and concessionaires/ contractors on concession-related/ contract-

3

related matters, supporting the client in preparation of documentation for concession/ contract administration, advising the client on any potential issues of project implementation, and coordinating within the project or third parties as necessary;

(ii) Schedule the project implementation with milestones and critical path analysis

based on international best practice, and update the schedule from time to time;

(iii) Prepare projections of contract awards and disbursements for the project and continuously update the requirement for financing based on the change orders and contract variations agreed upon in the project;

(iv) Provide proper monitoring of the funds available, fund flows within the investment program, disbursements of funds from the loan account, projections of future financial needs, and the financial progress of each concession/ contract;

(v) Ensure that the payment certificates of the concessionaires/contractor are processed in a timely manner, and facilitate and monitor the overall progress of requesting reimbursement by ADB through the necessary process within the State Government of Rajasthan and Government of India;

(vi) Identify issues and actions requiring management of interfaces between different parties within the investment program and external parties, such as local governments, utility companies, Ministry of Railway, parties involved in land acquisition, implementation of resettlement plan and implementation of environmental management plan, etc. Establish an interface management matrix to identify the interfaces, parties involved, decisions required and timeline for solving the interfaces. Monitor the timely addressing of Interfaces and advise the client on pending decisions/actions; and

(vii) Prepare the monthly and quarterly reports as required for management of the project and reporting to Rajasthan PWD and ADB.

9. Task 2: Financial Management Support

(i) Assist the PPP Division in customizing the annual project financial statement (APFS) from the agreed template with ADB-MOF-CAG;

(ii) Assist the PPP Division in preparation of the financial chapters and sections of

the quarterly progress reports;

(iii) Assist the PPP Division in the implementation of a management Information System for project management;

(iv) Assist in the preparation of withdrawal application for getting reimbursement from

ADB; (v) Assist the PPP Division in updating Chart of Accounts for capturing the project

expenses in the current Integrated Financial Management System Software (IFMS), developed by National Informatics Center (NIC), so that it is able to

4

undertake budgeting and other functions to be fine-tuned by allowing for expenditure to be identified (a) by donor/ source (b) by project output (c) by nature of expenditure and (d) by method of withdrawal and customize it according the needs in the PPP Division and provide the necessary training and assistance during implementation;

(vi) Assist the PPP Division to maintain and periodically update a computerized asset

register which is to be regularly reconciled with physical assets; (vii) Recommend and implement new business procedures where required for

efficient financial management, and provide training to PPP Division staff to enable them carrying out the tasks assigned under the institutional and management structure; and

(viii) Assist the team leader on tasks related to the finance and accounts of the project

10. Task 3: Project Performance Monitoring System

(i) Define the overall project performance monitoring indicators, monitoring and

reporting process and standards to fulfill the requirements of Rajasthan PWD and ADB. ADB’s Guidelines for Preparing a Design and Monitoring Framework should be followed;

(ii) Design a project performance monitoring system, including the functions of

physical progress management, financial progress management, and overall portfolio management of PPP/EPC projects of Rajasthan PWD. Special considerations should be given to the nature of concession/ contract models adopted by the Rajasthan PWD;

(iii) Conduct consultations with Rajasthan PWD, ADB, and other related parties

about the proposed project performance monitoring system; (iv) Propose related IT systems appropriate for implementing the project

performance monitoring system; and (v) Facilitate the procurement and installation of related IT systems, and provide

training to related PWD staff and concessionaires and contractors. 11. Task 4: Safeguard Coordination and Reporting

(i) Monitor the implementation of safeguards in accordance with ADB’s Safeguard

Policy Statement (2009).

(ii) Ensure implementation of Resettlement Plans (RPs) in accordance with ADB's Safeguard Policy Statement (SPS) (2009) and other related policies such as the Public Communications Policy (2011), and ensure payment of compensation to people affected by the project prior to hand-over of the site to the concessionaire/ Contractor. Prepare the due-diligence reports on resettlement implementation as needed for processing of subsequent tranches under the MFF. Provide monthly and quarterly reports to Rajasthan PWD on resettlement implementation and provide updates on the schedule and financial aspects of resettlement to the

5

team. Monitor and provide guidance to the work of the NGOs for resettlement implementation engaged by PWD and monitor the resettlement implementation at the project sites and provide training, if required, to the local PWD staff. Act as External Monitor for social safeguard in accordance to ADB SPS and prepare semi-annual monitoring reports for ADB.

(iii) Ensure implementation of the environmental management plan (EMP) and other

measures related to environmental protection in accordance with ADB's Safeguard Policy Statement (2009). Ensure that all statutory and regulatory clearances/approvals relevant to environmental safeguards are obtained and the conditions noted in the clearances are implemented. Prepare the due-diligence reports on EMP implementation as needed for processing of subsequent loans under the investment program. Provide monthly, quarterly, and annual reports on EMP implementation and provide updates on the schedule and financial aspects to the team. Ensure all environmental assessment documentation, including environmental due diligence, and monitoring reports, are properly and systematically kept as part of the subproject-specific record and available upon request. All environmental documents will be disclosed subject to ADB’s Communication Policy 2011 and ADB SPS 2009. Disclose IEE reports to the public through the ADB website before the approval of the respective tranche for ADB financing. Assist in the effective implementation of grievance and redress mechanism. Monitor EMP implementation at the project sites and provide training, if required, to the local PWD staff. In case of unanticipated environmental impacts during project implementation stage, prepare and update the EMP to account for such impacts after seeking concurrence from ADB. The updating shall be carried out after due consultation with the stake holders and concerned government agencies. In case during project implementation a subproject needs to be realigned, review the environmental classification and revise accordingly, and identify whether supplementary IEE is required. If required, prepare the TOR for undertaking supplementary IEE and provide advice on environmental consultant selection.

12. Task 5. Periodic Financing Request

(i) Assist the RPWD in selecting project roads proposed for subsequent loans under

the investment program, and ensure the proposed improvement and/or upgrading of project roads in accordance with project selection criteria and process as agreed with ADB;

(ii) Assist the Rajasthan PWD in reviewing the project reports about feasibility study

and preliminary design, the financial analysis, and the bidding documents to meet the requirements of State Government of Rajasthan, Government of India, and ADB;

(iii) Prepare an economic analysis of the proposed road improvements using the

highway development and management model (HDM, version 4) and/or other more appropriate models. The economic analysis should follow ADB’s guidelines for the economic analysis of projects;

6

(iv) Ensure that relevant safeguard planning documents are prepared to ADB standard and that they are complete, accurate, and consistent with respective assessment framework plans; and

(v) Prepare the reports and documentation needed for the RPWD to submit the

subsequent periodic financing requests to ADB to secure funding timely for project implementation.

13. Task 6. Creation of Asset Management, I.T. System and Development of I.T. enabled Road Safety System

To facilitate monitoring and evaluation, the PMC will develop a multi- platform mobile application/tool/system to enable road incident/crash reporting by the public. The backend of this system should enable-

a. Automatic SOS alert to rescue agencies/highway patrol/police etc. in cases of

accidents;

b. Presentation and analysis of incidents and crashes on GIS maps on PWD portal;

c. PWD staff/designated officers to moderate and validate reported data by

public; d. Integration with the existing accident data recording system of the Rajasthan

Police; e. Gathering and analyzing of Road accidents data, geographical information

and related data for identifying frequent accident spots to facilitate treatment of such location to minimum social and economic cost; and

f. Preparation of a comprehensive, dynamic road safety countermeasures

library showing accident patterns, collision types, possible causes and general countermeasures for use by road safety officials at local, panchayat and state levels.

E. Output and Reporting Requirements

Sl.

No. Report Frequency Due Date

No. of

Copies

No. of

CDs

1. Inception Report One Time Within 1 month

after

commencement of

service.

5 2

2. Quarterly Progress

Reports

Every three

months

10th of the month

following the

reporting quarters

5 2

7

3. Annual Reports Five Times 1 month after

commencement

month every year

5 2

4. Project Completion

Report

One Time Before the end of

defect liability

period

5 2

5. Periodic Financing

Request (PFR) and

related document

One Time To be decided by

the client

3 2

6. Road Safety Audit

Manual

One Time Within 12 months

after

commencement of

service

5 2

7. Manual on social and

environmental

safeguards

One Time Within 12 months

after

commencement of

service

5 2

8. Manual for Project

Implementation

One Time Within 24 months

after

commencement of

service

5 2

9. Road Asset

Management System

(RAMS) and RAMS

Manual

One Time Within 24 months

after

commencement of

service

One set of

RAMS with

5 sets of

Manual

2

10. Management Information System (MIS) and MIS Manual

One Time Within 24 months

after completion of

services

One set of

MIS with 5

sets of

Manual

2

14. Inception report: The report will include the Consultant’s proposals on the detailed

project implementation arrangements and the planned activities for different components based on the initial assessment. The report will also include the detailed work program and approach towards the assignment.

1) Quarterly reports: The consultants shall furnish the PWD, GoR with quarterly progress reports on implementation progress including achievements and problems to be resolved. The quarterly reports shall be factual and concise with recommendations for the subsequent quarter.

2) Annual reports: The Consultant shall furnish to the ADB and PWD, GoR an annual report covering all activities in the last 12 months. In addition to summarizing key facts

8

and issues presented in the 4 quarterly reports for the reporting period, the annual report should include the Consultant’s views on the strengths and weaknesses of the project implementation arrangements and remedial actions to be taken if any.

3) Project completion report: The Consultant shall prepare a comprehensive completion

report of all components of the project including civil works and consulting services. The report shall incorporate summaries of the methods of construction, the construction supervision performed, problems encountered and solutions undertaken thereon, and recommendations for future projects of similar nature to be undertaken by PWD, GoR. The Consultant shall include the self-appraisal in the report in compliance with ADB requirements for project completion report of executing agencies, including detailed data and information gathered and recorded during the project implementation and those on PPMS indicators. For this purpose, the consultant shall conduct necessary field surveys on road conditions and traffic volumes at appropriate timings during the defect liability period.

4) Periodic financing report: Prepare the documents as required for the client to submit the subsequent periodic financing request to ADB to timely secure funding for the next tranche.

5) Road safety audit manual: The Consultant shall provide PWD with a step-by-step

guide to conduct road safety audit during project preparation, project implementation and post-construction stages. The manual should be tailored to the actual needs of PWD based on the assessed needs by the Consultant and be used for training during the consulting services.

6) Manual on social and environmental safeguards: The consultant shall prepare a

manual to provide guidance to PWD, GoR for complying with social and environmental safeguard requirements under GOI and external financing agencies such as ADB during project preparation and implementation. The manual will provide guidance on key steps to be taken for social and environmental assessment including preparation of resettlement plans (RP), indigenous peoples plans (IPP), environmental impact assessment (EIA) or initial environmental examination (IEE) and environmental managementp (EMP) during project preparation; pre-construction related activities including land acquisitions, resettlement, processing of clearances and permits and implementation and monitoring of RP, IPP and EMP.

7) Manual for project implementation: The consultant shall prepare a manual for

administration, supervision and management of the project and the construction

contracts to be implemented. It will serve as a guide and reference to the various

officials in charge of the project management and supervision in discharging their duties

in a smooth and systematic manner.

8) Road asset management dystem (RAMS) and RAMS manual: The Consultant shall develop an appropriate RAMS suitable for road inventories of PWD with the operation manual. RAMS should be based on the findings of actual needs of PWD through discussions and trainings during the assignments. RAMS and RAMS Manual shall be prepared during the first 24 months of construction works to be used for follow-up trainings of PWD officials during the consulting services. The consultant should assist

9

PWD officials in organizing data collection, and preparing annual report of maintenance division and budget proposals using RAMS.

9) Management information dystem (MIS) and MIS manual: The Consultant shall develop an appropriate MIS for efficient management of PWD by making key management information readily available online, including the financial and physical information for management decisions. MIS Manual shall include sufficient information for recording the accounting information in MIS in compliance with statutory requirements.

15. Workshops and training sessions: 1) Seminars/Workshops: The consultant shall conduct semi-annual seminars/workshops

on key aspects of technical capacity improvement and progress to date to PWD officials. Workshops on organization issues shall be conducted on a need basis, inviting relevant state government officials in addition to PWD officials. Workshops on social/environmental safeguards and social inclusion shall be conducted on a need basis.

2) Training sessions: The Consultant will provide on-the-job training to PWD officials on a day-to-day basis. Small classroom style sessions shall be conducted monthly or quarterly as needed to supplement the daily trainings. The semi-annual seminars/workshops will present the weakness and strengths of PWD officials identified during these training sessions and the recommendations and suggestions from participants shall be used for improving the training methods.

F. STAFFING INPUTS

16. The consulting services will require the following experts on an intermittent basis during 60 months, covering 3 months before the construction, 36 months construction period and 21 months operation period.

S. No. Position Person-months International Expert Positions Key Experts

1. Team Leader cum Senior Contract Management Specialist

60

2. Transport Economist 6 Total 66

National Expert Positions

Key Experts

3. Deputy Team Leader cum Senior Highway Engineer 36

4. Financial Management Specialist 12

5. Road Safety Expert 36

6. Road Asset Management Specialist 24

7. I.T. Specialist / PPMS Specialist 24

8. Environmental Specialist 24

10

9. Resettlement Specialist 24 Total 180

Grand Total 246

Qualification Requirements International Experts:

1. Team Leader cum Senior Contract Management Specialist

a) Qualification

Bachelor degree in Civil Engineering.

Post graduate degree in transport engineering, contract

management preferred.

b) Total Professional Experience

15 years

c) Project-related Experience

At least 3 similar project experiences on road sector institutional

development. Experience on highway projects under annuity and

EPC modes of construction.

d) Overseas/ Country Experience

Required

2. Transport Economist

a) Qualification Bachelor degree in economics.

Postgraduate degree in economics is preferred.

b) Total Professional Experience

10 years

c) Project-related Experience

8 years as a project economist, preferably on road projects.

d) Overseas/ Country Experience

Required

National Experts:

3. Deputy Team Leader cum Senior Highway Engineer

a) Qualification

Bachelor degree in Civil Engineering.

Post graduate degree in transport engineering, contract

management preferred.

b) Total Professional Experience

15 years

11

c) Project-related Experience

At least 2 project experiences on road sector development under

PPP and EPC mode.

d) Experience in working with international organization/ agencies

Preferred

4. Financial Management Specialist

a) Qualification Bachelor degree in accounting, finance, business or related field

Must hold professional certification such as CA, CPA

b) Total Professional Experience

10 years

c) Project-related Experience

8 years in financial management system development,

accounting policies development or an accountant.

Familiar with the financial rules and regulations of the

Government of India/ Rajasthan.

d) Experience in working with international organization/ agencies

Preferred

5. Road Safety Expert

a) Qualification Bachelor degree in civil engineering or relevant engineering

fields. Post Graduate in Road traffic engineering preferred.

b) Total Professional Experience

10 years

c) Project-related Experience

5 years in road safety audits.

Familiarity with road safety audit following iRAP specifications is

a plus.

d) Experience in working with international organization/ agencies

Preferred

6. Road Asset Management Specialist

a) Qualification Bachelor degree in Civil Engineering.

Post Graduate degree in Management preferred.

b) Total Professional Experience

10 years

12

c) Project-related Experience

At least 7 years experiences on road asset management.

At least 1 project experience in developing road asset

management system in India.

d) Experience in working with international organization/ agencies

Preferred

7. I.T. Specialist / PPMS Specialist

a) Qualification Bachelor degree in information technology, or masters in

computer applications (MCA) or related field.

b) Total Professional Experience

5 years

c) Project-related Experience

5 years in IT related assignments.

d) Experience in working with international organization/ agencies

Not required.

8. Environmental Specialist

a) Qualification Master’s degree in environmental engineering, environmental science or related field.

b) Total Professional Experience

15 years

c) Project-related Experience

10 years working on environmental safeguard planning and

implementation of road and similar infrastructure projects. Proven

familiarity with ADB or the World Bank requirements on

environmental safeguards.

d) Experience in working with international organization/ agencies

Required

9. Resettlement Specialist

a) Qualification Master’s degree in social sciences.

b) Total Professional Experience

15 years

c) Project-related Experience

10 years of experience working on land acquisitions and

resettlement planning and implementation in the road sector.

Proven familiarity with ADB or the World Bank requirements on

13

social safeguard policies.

Experience in capacity building for government agencies and

resettlement implementation NGOs preferred.

d) Experience in working with international organization/ agencies

Required

G. COUNTERPART SERVICES AND FACILITIES

17. PWD shall provide all the necessary data/reports as available within PWD. PWD shall also support the consultant with the necessary counterpart officials. Office space shall be provided to the consultant. Necessary office equipment, such as computers, computer peripheral, etc. should be procured under the consulting services budget.