Project Administration Memorandum

The grant administration memorandum is an active document, progressively updated and revised as necessary, particularly following any changes in project or program costs, scope, or implementation arrangements. This document, however, may not reflect the latest project or program changes.

Project Number: 38347 Grant Number: 0106 March 2008, revised September 2008

Nepal: Information and Communication Technology Development Project

CURRENCY EQUIVALENTS

(as of 14 December 2007)

Currency Unit - Nepalese rupee/s (NRe/NRs) NRe1.00 = $0.01586

$1.00 = NRs63.04

ABBREVIATIONS ADB – Asian Development Bank ADF – Asian Development Fund CeC – community e-center HLCIT – High-Level Commission for Information Technology HRD – Human Resources Development ICT – Information and Communication Technology ISP – Internet service provider IT – Information Technology MOEST – Ministry of Environment, Science and Technology MOIC – Ministry of Information and Communications NCB – National Competitive Bidding NGO – nongovernment organization NITC – National Information and Technology Center NT – Nepal Telecom NTA – Nepal Telecommunications Authority OPMCM – Office of the Prime Minister and Council of Ministers PIU – project implementation unit PMU – project management unit VDC – village development committee VOIP – voice over Internet protocol VSAT – very small aperture terminal

NOTE In this report, “$” refers to US dollars.

i CONTENTS

I. PROJECT DESCRIPTION 1 A. Project Area and Location 1 B. Impact and Outcome 2 C. Outputs 2

II. COST ESTIMATES AND FINANCING PLAN 4 A. Detailed Cost Estimates 4 B. Financing Plan 4 C. Allocation of Loan Proceeds 5

III. IMPLEMENTATION ARRANGEMENTS 5 A. Executing and Implementing Agencies 5 B. Project Management Organization 5

IV. IMPLEMENTATION SCHEDULE 7 V. CONSULTANT RECRUITMENT 7 VI. PROCUREMENT 8 VII. DISBURSEMENT PROCEDURES 12

A. Disbursement Arrangements 12 B. Imprest Account; Statement of Expenditures 12 C. Disbursement Plan 12

VIII. PROJECT MONITORING AND EVALUATION 13 A. Performance Monitoring and Evaluation 13 B. Project Review 13

IX. REPORTING REQUIREMENTS 13 A. Progress Reports 13 B. Annual Contract Awards and Disbursement Projections 13 C. Project Completion Report 13

X. AUDITING REQUIREMENTS 14 XI. MAJOR LOAN COVENANTS 14 XII. KEY PERSONS INVOLVED IN THE PROJECT 14 XIII. ANTICORRUPTION 17

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APPENDICES

1 Detailed Cost Estimates and Financing Plan, and Allocation 182 Implementation Arrangements 193 Implementation Schedule 204 Outline Terms of Reference for Project Management Consultants 215 Procurement Plan 246 Withdrawal of Grant Proceeds (Disbursement Letter) 277 Disbursement Procedures and Sample Forms 348 Proforma of Executing Agency’s Project Progress Report 419 Contract Awards and Disbursement Projections 46

10 Outline of Project Completion Report 4711 Sample Audit Letter 4912 Loan Covenants 5113 Relevant Documents 57

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PURPOSE OF THIS DOCUMENT

This Project Administration Memorandum (PAM) provides a reference for the Government, its executing agency, and ADB. It indicates the Project implementation arrangements which have been agreed and the monitoring and control procedures which are to be used to help ensure that the intended Project objectives are realized.

ADB’s GRANT PROCESSING AND ADMINISTRATION HISTORY Chronology of Important Events

SI.No. Events Date

A. Processing of the Grant 1. Approval of PPTA 13 October 20062. Fact-Finding Mission 2-9 July 20073. Management Review Meeting 3 August 20074. Appraisal Mission 13-16 August 20075. Staff Review Committee Meeting 27 November 20077. Grant Negotiations 7 December 20078. RRP Board Circulation 27 December 20079. Board Consideration and Grant Approval 28 January 2008

10. Signing of Grant Agreement 23 May 200811. Grant Effectiveness 25 July 2008B. Project Administration 1. Project Inception Mission 22-26 September 20082. Initial Disbursement to the Imprest Account 3. Project Review Mission(s) 4. Midterm Review Mission 5. Project Review Mission(s) 6. Project Completion Review Mission

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DESIGN AND MONITORING FRAMEWORK

Design Summary Performance Targets/Indicators Data Sources/Reporting

Mechanisms Assumptions (A)

and Risks (R) Impact Improved social and economic conditions of rural communities in 38 districts.

The social and economic conditions of rural communities in 38 districts are improved by 20% within 3 years after the end of project implementation.

Government/District Economic Statistics

R: Country’s economic activities decrease due to unforeseen political and/or security situations.

Outcome The rural communities in target 38 districts have access to ICT services.

Teledensity, both individual households and shared-facility telecenters, is improved by 10% by the end of project implementation.

Teledensity Statistics by International Telecommunication Union (ITU)

A: Government remains committed to making ICT accessible to rural communities.

Outputs 1. ICT

infrastructure in targeted districts are operational.

2. Government

ICT Network is enhanced.

3. Selected

Government services are available on line.

4. ICT awareness,

skills, and knowledge among key stakeholders are enhanced.

The WiFi (Wireless Fidelity) broadband network and telecenters provide ICT services in phases: – 3 districts pilot testing (year 1), 10 districts (year 2), and 25 districts (by end of project implementation). Government information data center is established by year 3 - providing central point of information storage, access and delivery. A range of Government groupware applications are implemented over 3 years in phased manner – providing single integrated web service for ministries and departments. Selected e-Government applications operational in 3 years – (i) enterprise architecture, (ii) database for national identification system, (iii) public service recruitment management system, (iv) land records management, and (v) vehicle registration and licensing. The weighted average composite index of e-readiness improves by 10% by the end of the project implementation.

Project Monitoring and Progress Reports Project Monitoring and Progress Reports Project Monitoring and Progress Reports Project Monitoring and Progress Reports E-readiness and e-government index published by the UN and/or ITU

A: Government fully liberalizes Voice Over Internet Protocol (VOIP) service on a district-by-district basis in the project area. A: Government continues reinforcing interagency coordination and policy control among ministries and departments for e-government development. R: Civil servants resist providing online services due to traditional rent-seeking behaviors. A: Government remains strongly committed to enhancing country’s ICT business and industry.

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Design Summary Performance Targets/Indicators Data Sources/Reporting

Mechanisms Assumptions (A)

and Risks (R) Activities 1.1. Develop, install, test and commission Wireless

Broadband Network in 38 districts (month 36). 1.2. Develop, install, test and commission 114 telecenters

in 38 districts (month 48) 1.3. Village Networks – Build village network in 11

selected districts in step with WBN (month 48).

2.1 Develop, install, test and commission the Government’s information and data center, and Groupware (36 months)

3.1 Develop, install, test and commission the e-Government applications (36 months)

4.1 Carryout human resources development for E-Governance – build knowledge/skills, capacity development, and training courses (36 months)

Inputs ADB - $25 million • Consulting services 108 PMs - $0.7 million • Equipment - $22.6 million • Human Resources Development - $1.5 million • Contingencies – $0.2 million Government - $6.2 million • Equipment - $3.5 million • Contingencies – $2.7 million

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I. PROJECT DESCRIPTION

A. Project Area and Location

1. Nepal is a landlocked country, bordered by China to the north and by India to the south, east and west. The Himalaya mountain range runs across Nepal's northern and western parts. The rural population is predominant, spread throughout remote mountainous and hill areas, which presents formidable challenges and barriers to sustainable growth and development. 2. Government has recognized Information Communication Technology (ICT) as the most effective means to overcoming the geographic barriers that hinder the people of mountain and hill areas, who compose 52% of the population, from benefiting from Government development initiatives. By providing ICT facilities and internet connectivity, the Project will provide these people better access to market information, job opportunities within and outside the country, and information on health, education, tourism, and government programs and policies, leveraging additional support and resources to improve their daily lives. 3. The project includes providing selected locations in 38 districts (remote and rural areas) with wireless broadband services, village networks, and telecenters.

Rural Wireless Broadband Service (RWBS)

(Public Call Office Locations)

Municipalities (Town Areas)

VDCs (Rural Areas)

Village Networks

Telecenters

Region Zone District

Darchula 39 3 Baitadi 4 62 3 Dadaeldhura 3 20 3

Mahakali

Kanchanpur 6 19 3 Bajhang 46 3 Bajura 26 3 Accham 75 3 Doti 5 50 3

Far West Development Region

Seti

Kailali 8 42 3 Surkhet 4 50 3 Banke 5 46 3

Bheri

Bardia 5 31 3 Dang 7 39 3

Mid West Development Region

Rapti Pyuthan 49 3 Myagdi 40 3 Baglung 4 49 3 Parbat 55 3

Dhaulagiri

Syngja 8 60 3 Gulmi 79 3 Arghakhanchi 42 3 Palpa 5 65 3 Kapilbastu 5 77 3

West Development Region

Lumbini

Rupandehi 69 3

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Rural Wireless Broadband Service (RWBS)

(Public Call Office Locations)

Municipalities (Town Areas)

VDCs (Rural Areas)

Village Networks

Telecenters

Region Zone District

Nwalparasi 4 73 3 Kaski 5 43 3 Lamjung 61 3 Gorkha 4 65 3

Gandagi

Tanahu 4 46 3 Nuwakote 4 60 3 Dadhing 50 3 Makwanpur 4 43 3 Chitwan 9 36 3

Central Development Region

Various

Dhanusha 101 3 Ilam 3 48 3 Jhapa 14 47 3 Dhankuta 3 35 3 Sunsari 6 49 3

East Development Region

Various

Udaypur 44 3 Total 38 Districts 129 1,931 11 114 Note: Above table is indicative and will be finalized upon conclusion of the ongoing PPTA 4833-NEP: Preparing the ICT Development Project with final comments from the Government. B. Impact and Outcome

4. Impact: Improved social and economic conditions of rural communities in 38 districts. Outcome: The rural communities in target 38 districts have access to ICT services.

C. Outputs

5. The project comprises the following activities:

PART 1: RURAL E-COMMUNITY Modernization of rural communities, particularly remote areas, by improving rural connectivity using the wireless broadband networks in various districts; mobilize community socioeconomic activities using a village network portal; and building Telecenters to improve service access in remote rural areas through the following:

A. Wireless Broadband Network (i) provide wireless broadband networks in about 38 districts in a phased manner

with pilot testing in 3 districts selected from hill, mountain and Terai districts; develop a model for network ownership and operation, focusing on involving small local enterprises; and

(ii) enhance the financial viability of wireless broadband network by liberalizing VOIP.

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B. Village Networks

(i) build village networks in about 11 districts of Nepal which will be owned by VDC; (ii) develop a village network portal in Nepali, local and English languages; and (iii) establish functionalities of a village network.

C. Telecenters

Establish about 114 Telecenters in about 38 districts to be linked to operation of rural wireless broadband network.

D. Community Mobilization and Capacity Development

(i) support community mobilization activities in cooperation with various non-

governmental organizations and community-based organization, as well as VDCs; (ii) identify detailed training needs for rural communities; and (iii) provide capacity development programs using private training institutes.

PART 2: GOVERNMENT NETWORK

Establishment of the Government’s ICT Network through the following: A. Government Information and Data Center

Establish a Government Information Data Center to facilitate its e-Government applications and support digitization efforts for enhanced service delivery and modernization at the central level.

B. Government Groupware

Develop a range of groupware applications in the form of a single integrated web service with open standards for all ministries and departments and implement the groupware in selected departments and ministries in selected locations, in a phased manner.

PART 3: E-GOVERNMENT APPLICATIONS

Development of selected priority e-Government applications, to include:

(i) Enterprise architecture and standards - to develop a common Government

enterprise architecture based on open standard supporting interoperability standards, develop application solutions, quality assurance, and testing according to the predefined interoperability standards, develop e-Government operation policy and guidelines, and map migration of legacy systems to new architecture;

(ii) Database for national identification system - facilitating delivery of public services;

(iii) e-Governance in the PS Commission - to design and implement a new web-based public service recruitment management system with the integration into a national citizen database;

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(iv) e-Governance application for land records management - to improve land record management and service delivery to citizens and to introduce user-friendly applications for accessing and updating land records documents; and

(v) An application to introduce an online vehicle registration and driving licenses and renewal process.

PART 4: HUMAN RESOURCE DEVELOPMENT FOR E-GOVERNANCE

(i) build awareness, knowledge and skills of the key stakeholders in e-Governance; (ii) establish computer laboratories for capacity development of institutions

promoting ICT human resource development and strengthen networking between training institutions and support for functional linkages;

(iii) revise existing training curriculum and develop new curricula for public training institutions aiming at improving the quality of training curriculum and materials in e-Governance and enhance cost effectiveness of training programs by developing quality training materials;

(iv) share knowledge and experiences to promote e-Governance and applications through exchange and fellowship programs; and

(v) support development of e-Governance courses and develop new curriculum and teaching materials in e-Governance in association with universities and research

II. COST ESTIMATES AND FINANCING PLAN

A. Detailed Cost Estimates

6. The project investment cost is estimated at $31.2 million, including taxes and duties of $3.5 million, as shown in Table 1. Details of the cost estimates are presented in Appendix 1.

Table 1: Project Investment Plan ($ million)

Item Amountsa A. Base Costb 1. Rural E-Community 9.0 2. Government Network 4.4 3. e-Government Applications 12.8 4. Human Resources Development 1.5 5. Project Management Consultants 0.7 Subtotal (A) 28.3 B. Contingenciesc 2.9 Total (A+B) 31.2

a Includes taxes and duties of $3.5 million. b In mid-2007 prices. c Physical contingencies computed at 10% of base cost, except for human resources development and

project management consultant services and price contingencies, which were computed at 0.8% of the foreign exchange costs and local currency costs.

Source: Asian Development Bank estimates. B. Financing Plan

7. The Project financing plan is shown in Table 2 and details are presented in Appendix 1. ADB will provide a grant of $25 million (80% of the total cost). The Government will finance $6.2 million (20% of the total cost), comprising taxes and duties ($3.5 million) and contingencies ($2.7 million).

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Table 2: Financing Plan

Source Total

($ million) Percent of Total

Project Costs Asian Development Bank 25.0 80.0 Government of Nepal 6.2 20.0

Total 31.2 100.0 Asian Development Bank estimates.

C. Allocation of Loan Proceeds

8. The allocation of grant proceeds on the basis of categories of expenses has been established in the project grant agreement and is shown in Table 3.

Table 3: Allocation and Withdrawal of Grant Proceeds Amount Allocated Percentage and Basis for SI. No. Item $ Withdrawal from the Grant Account Category Subcategory

1 Works 22,600,000 1A Rural e-Community 7,900,000 89 percent of total expenditure 1B Government Network 3,700,000 83 percent of total expenditure

1C E-Government Applications 11,000,000 86 percent of total expenditure

2 Human Resource Development 1,500,000 100 percent of total expenditure*

3 Consulting Services 700,000 100 percent of total expenditure* 4 Unallocated 200,000 Total 25,000,000

* Exclusive of taxes and duties imposed within the territory of the Recipient

III. IMPLEMENTATION ARRANGEMENTS

A. Executing and Implementing Agencies

9. Executing Agency (EA) is: The Office of the Prime Minister and Council of Ministers. 10. Implementing Agency (IAs) are as follows: Components Implementing Agencies AcronymPart 1 Rural E-Community Ministry of Information and Communication MOIC Part 2 Government Network Ministry of Environment, Science, and Technology MOEST Part 3 E-Government Applications (i) Enterprise Architecture High Level Commission for Information Technology HLCIT (ii) National Identification System Ministry of Home MOH (iii) E-Governance Public Service Commission PSC (iv) Land Records Management Ministry of Land Reforms and Management MOLRM (v) Vehicle Registration/License Ministry of Labor and Transport Management MOLTM Part 4 Human Resources Development Ministry of General Administration MOGA B. Project Management Organization

11. The project management organization chart is presented in Appendix 2.

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Project Management Unit Key Positions Name Status Chief Project Director (CPD) Ms. Bindra Hada Appointed Project Director (Administration) Mr. Ravi Raj Pant Appointed Project Director (Technical) Mr. Suvarnu Shakya Appointed Financial Controller (Treasurer) Mr. Toyam Raya Appointed

Established in EA (OPMCM) and responsible for overall project management.

Member Secretary Mr. Laxmi Koirala Appointed PMU is assisted by the Project Management Consultant (PMC) who will provide technical inputs for the appropriate supervision of project implementation. 12. Project Implementation Units (PIUs) are established by the various implementing agencies for the respective components.

Comp. IA PIU/Status PIU Key Positions Name(s) Status Part 1 MOIC Unit in IA

Established PIU Director* PIU Member PIU Member PIU Member Project Accountant*

Mr. Sushil Ghimire Mr. Keshab Raj Acharya Mrs. Shailaja R. Bhattarai Mr. Ambar Sthapit TBN

Mobilized Mobilized Mobilized Mobilized None Yet

Part 2 MOEST/ NITC

Agency under IA (NITC)

Established

PIU Director* PIU Member Project Accountant* Computer Engineer Computer Engineer Administrative OfficerMOEST Rep.

Dr. Subarna Shakya Dr. Sunil Maskey Mr. Ram Bahadur Buda Mr. Sudeep Dangi Mr. Bikal Poudel Mr. Dibakar Luitel TBN

Mobilized Mobilized Mobilized Mobilized Mobilized Mobilized

Part 3 (i) HLCIT Unit in IA Established

PIU Director* Project Accountant* Tech. Coordinator Sr Computer Engr Computer Engineer Computer Prog. Computer Engineer Computer Engineer Admin Coordinator Admin Officer

Dr. Madan Prasad Pariyar Mr. Tanka Poudel Mr. Manohar Kumar Bhattari Mr. Arni Raj Manandhar Mr. Deepak Kaji Gopaju Mr. Surab Amatya Mr. Khadak Singh Bhandari Mr. Manoj Shah Mr. Narayan Raj Timilsina Mr. Surya P. Bajracharya

Mobilized Mobilized Mobilized Mobilized Mobilized Mobilized Mobilized Mobilized Mobilized Mobilized

Part 3 (ii) MOHA Unit in IA Established

PIU Director* PIU Member PIU Member PIU Member PIU Member Project Accountant* Member Secretary

Mr. Biswa Prasad Pandit Mr. Pradip Kumar Koirala Mr. Laxman Thapa Mr. Lekhanath Pokhard Mr. Ganesh Rai Mr. Rhishi Ram Sharma Mr. Narendra Paudel

Mobilized Mobilized Mobilized Mobilized Mobilized Mobilized Mobilized

Part 3 (iii) PSC Unit in IA Established

PIU Director* Mr. Kumar Prasad Poudyal Mobilized

Part 3 (iv) MOLRM

Dept. under IA (DOLRM)

Established

PIU Director* Survey Officer Section Officer Project Accountant*

Mr. Shatrughna Pudasainee Mr. Sushil N. Rajbhandary Mr. Raju Basnet TBN

Mobilized Mobilized Mobilized

Part 3 (v) MOLTM/ DOT

Dept. under IA (DOT)

Establish by 03Oct/2008

PIU Director* Project Accountant* Technical Staff Administrative Staff

TBN TBN TBN TBN

To be mobilized

by 03Oct/08

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Comp. IA PIU/Status PIU Key Positions Name(s) Status Part 4 MOGA Unit in IA

Establish by 31Oct/2008

PIU Director* Project Accountant* Technical Staff Administrative Staff

TBN TBN TBN TBN

To be mobilized

by 31Oct/08

The PIUs are responsible for:

(i) coordinating with the contractors and monitoring the day-to-day progress of project management and implementation,

(ii) preparing fund withdrawal applications and submitting them to the PMU under the EA for endorsement,

(iii) preparing monthly project progress reports and submit them to the PMU, (iv) taking charge of procurement for their respective areas of assignment, and (v) keeping the project accounts and preparing the annual reports.

13. The Project Steering Committee (PSC) will be established to supervise the overall project implementation will comprise the chief secretary of OPMCM (Chair), the Chief Project Director (Vice-Chair), the secretaries of MOIC and MOEST, the member-secretary of HLCIT, and the executive director of NITC (Committee Secretary). The PSC will meet regularly at least twice a year, or more often if necessary, to set the direction for overall project implementation, guide the PMU on specific project implementation issues, and resolve any dispute between the PMU and the project implementation agencies.

IV. IMPLEMENTATION SCHEDULE

14. The project implementation schedule, in form of CPM bar chart, is presented in Appendix 3.

V. CONSULTANT RECRUITMENT 15. The PMU will engage a firm of national consultants (referred as “Project Management Consultants” – PMC) to provide project management support. The PMC will provide total 108 person-months of national consultant inputs, consisting of (i) a team leader/information and communication technology (ICT) human resources development adviser (36 person-months), (ii) a network integration specialist (36 person-months), and (iii) a systems integration specialist (36 person-months). 16. The PMC will:

(i) assist the PMU in developing a comprehensive system for monitoring the Project’s performance, as prescribed in the project design and performance framework, and for identifying the performance parameters to be monitored during the implementation of the Project;

(ii) review the monthly progress reports submitted by the Implementing Agencies, identify potential problems in the implementation of each component, develop remedial measures to avoid or correct problems, and prepare a monthly progress report summary, including all the findings and recommendations, for the project director of the PMU, ADB, and the cofinancier if any;

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(iii) organize a monthly progress review meeting with the Implementing Agencies and the contractors concerned, facilitate interagency coordination and cooperation between project components, reconcile any opposing views on the system design and implementation plans, and prepare a summary of each meeting for the project director of the PMU under OPMCM, ADB, and the cofinancier;

(iv) provide technical advice to the Implementing Agencies in case of technical disputes with contractors;

(v) review the fund withdrawal applications submitted by the Implementing Agencies, check their appropriateness and accuracy, and advise the chief project director of the PMU whether not to endorse them for payment; and

(vi) prepare a quarterly project progress report and a quarterly project performance monitoring and evaluation report to be submitted to ADB.

The outline terms of reference for the project PMC are presented in Appendix 4. 17. All recruitment will be in accordance with Guidelines on the Use of Consultants (2007, as amended from time to time), using quality and cost based selection (QCBS) procedures with simplified technical proposal (STP).

Time Frame for Consultant Recruitment (Subject to ADB’s approval of Method) Activity Responsibility Timeframe 1 Submit proposal & justification to ADB for aproval (MOU, para 10) PMU 03/Oct/08 2 ADB review and approval ADB 06/Oct/08 3 Finalize Request for Expression of Interest (EOI) PMU 14/Oct08 4 Advertise in the newspapers & ADBBO PMU 15/Oct/08 5 Preparation time of EOI by Individuals External 25/Oct/08 6 Receives EOI PMU 26/Oct/08 7 Prepares short lilst (at least 3) and ranks candidates PMU 02/Nov/08 8 Check availability of 1st-ranked candidate (noncommittal inquiry) PMU 04/Nov/08 9 Prepare draft contract PMU 07/Nov/08

10 Submit candidates' names, qualification, & draft contract to ADB PMU 08/Nov/08 11 ADB approves PMU's documents ADB 11/Nov/08 12 Negotiate with 1st ranked candidate and prepare draft contract PMU 14/Nov/08 13 Send draft contact to ADB for approval PMU 15/Nov/08 14 Sign contract and issue notice to proceed (NTP) PMU 16/Nov/08 15 Commencement of services (PMC) 14 days from NTP PMU 30/Nov/09

VI. PROCUREMENT

18. All goods and works, financed from the proceeds of the Grant, will be procured in accordance with ADB’s Procurement Guidelines (2007, as amended from time to time). The procurement plan is presented in Appendix 5, which will be reviewed and updated yearly. 19. National Competitive Bidding (NCB) will not be undertaken unless the ADB and the Government have agreed in writing to any necessary modifications or clarifications to the Government’s NCB procedures for the purpose of this project - in particular the Government’s Procurement Act, 2007 and Procurement Regulation, 2007 – to ensure consistency with ADB’s procurement guidelines. Any such modification or clarifications will be subsequently reflected in the procurement plan (ref. Schedule 3 of the Grant Agreement).

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Status/Time Frame for Procurement

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VII. DISBURSEMENT PROCEDURES

A. Disbursement Arrangements

20. The Grant proceeds for financing Goods, Works, and consulting services and other items shall be disbursed in accordance with ADB’s “Loan Disbursement Handbook” dated January 2007 (ADB’s Loan Disbursement Handbook), as amended from time to time. Withdrawal of Grant proceeds is described in ADB’s disbursement letter in Appendix 6. The summarized disbursement procedures and sample forms are presented in Appendix 7. ADB would regularly advise the Borrower, the PMU and the PIUs on the status of the grant fund disbursements through a semi-monthly Listing of Loan Disbursements. The handbook and the reports are available electronically in the Loan Financial Information Services Web System (LFIS) (http:lfis.adb.org). To obtain access to the LFIS web access must be filled out and submitted to ADB. B. Imprest Account; Statement of Expenditures

21. To expedite project implementation through timely release of grant proceeds for the “Human Resources Development Component”, the OPMCM will open an imprest account in a commercial bank acceptable to ADB – as soon as practicable after the grant effectiveness. The imprest account will be established, managed, replenished and liquidated in accordance with ADB's Loan Disbursement Handbook and detailed arrangements agreed upon between the Government and ADB. The currency of the imprest account will US Dollar. The initial amount to be deposited into the imprest account will not exceed the lower of (i) the estimated expenditure to be financed from the imprest account for the first six months of Project implementation, or (ii) the equivalent of ten (10) percent of the estimated amount for the “Human Resources Development Component”. 22. The statement of expenditures (SOE) procedure will be used for reimbursement of eligible expenditures and to liquidate advances provided into the imprest account, in accordance with ADB's Loan Disbursement Handbook and detailed arrangements agreed upon between the Recipient and ADB (i.e. individual payment transactions of up to $3,000). C. Disbursement Plan

23. Based on the revised implementation schedule, the disbursement plan is projected as follows:

$ Million Contract Award Disbursement Allocated in Grant 25.0 25.0 Year 2009 17.75 6.25 Year 2010 6.55 11.75 Year 2011 0.5 5.3 Year 2012 0.2 1.7

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VIII. PROJECT MONITORING AND EVALUATION

A. Performance Monitoring and Evaluation

24. The EA will be responsible for overall project monitoring and will establish a comprehensive project performance monitoring system acceptable to ADB. The IAs and their designated PIUs will establish a system for preparing monthly progress reports to allow the monitoring of performance, the resolution of issues resolution, and periodic action planning. The EA will monitor the quantitative and qualitative performance of each project component and evaluate the delivery of the planned facilities and the project benefits accrued. With the help of the PMC, the EA will develop a comprehensive system for monitoring the Project’s performance, no later than 3 months after the grant takes effect. ADB will review and approve this system. ADB and the Government will then agree on the performance parameters to be monitored during the implementation of the Project and for 3 months after project completion. B. Project Review

25. ADB and the Government will jointly undertake regular reviews of the Project. The reviews will assess progress in each component, identify issues and constraints, and determine the necessary remedial action and adjustments. A midterm review will be conducted during the third year of implementation. The midterm review will (i) review the scope, design, and implementation arrangements and identify the adjustments required; (ii) assess the progress of the project implementation against the performance indicators; and (iii) recommend changes in the design or implementation arrangements, if necessary.

IX. REPORTING REQUIREMENTS

A. Progress Reports

26. Monthly Progress Report. This report should be a brief, comprehensive report summarizing all items in the Quarterly Report in not more than 10 pages. The monthly report should focus on progress of major implementation activities and/or problems. A Progress Summary Sheet for the reporting months must be included. The monthly reports should be received by ADB within 15 days from the end of each month. 27. Quarterly Progress Report. The OPMCM will submit quarterly progress reports for performance monitoring, resolution of issues, and periodic action planning. The quarterly reports will serve as feedback to guide the updating and improvement of procedures and project implementation. A Proforma of the Project Progress Report is in Appendix 8. B. Annual Contract Awards and Disbursement Projections

28. The PMU in coordination with OPMCM will submit to ADB an annual contract awards and disbursement projections in order to monitor project implementation and to help identify impediments to implementation progress. The projection is submitted to ADB on 15 December of each year. The form is presented in Appendix 9. C. Project Completion Report

29. Within 3 months after the physical completion of the Project, the EA will submit a project completion report on the overall impact of the Project. The outline of the report is in Appendix 10.

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X. AUDITING REQUIREMENTS

30. The OPMCM will maintain separate accounts and records for the Project according to sound accounting principles, adequate to identify the goods and services financed from the grant proceeds, financing resources, expenditures incurred for the Project, and the use of local funds. These project accounts and related financial statements will be audited yearly according to sound auditing standards by independent auditors acceptable to ADB. The OPMCM, as the Executing Agency, will submit the audited project accounts to ADB no later than 6 months after the end of the fiscal year. The annual audits will include an audit of the imprest account and statement-of-expenditure records, and a separate opinion on the audit. The Government has been informed that ADB requires the timely submission of audited project accounts and financial statements, and that noncompliance with the requirement could mean the suspension of grant disbursements. Audit requirements are also discussed in Appendix 11.

XI. MAJOR LOAN COVENANTS

31. The standard grant covenants, as well as the other assurances, which have been agreed with the Government, the Executing Agency, and ADB to be complied with are in Appendix 12.

XII. KEY PERSONS INVOLVED IN THE PROJECT

A. Asian Development Bank Asian Development Bank 6 ADB Avenue, Mandaluyong City, Metro Manila, Philippines

NAME POSITION AGENCY CONTACT DETAILS Kazuhiko Higuchi Director Transport &

Communications Tel. No. 632-632-6806 Fax No. 632-636-2340 E-mail: khiguchi@adb.org

Sri Widowati PAU Head Transport & Communications

Tel. No. 632-632-6794 Fax No. 632-636-2340 E-mail: swidowati@adb.org

Dong-Kyu Lee Transport Specialist

Transport & Communications

Tel. No. 632-632-6817 Fax No. 632-636-2340 E-mail: dklee@adb.org

Taku Nishimura Transport Specialist

Transport & Communications

Tel. No. 632-632-6993 Fax No. 632-636-2340 E-mail: tnishimura@adb.org

Ma. Theresa Prado Assistant Project Analyst

Transport & Communications

Tel. No. 632-632-6100 Fax No. 632-636-2340 E-mail: mtprado@adb.org

Rita O’Sullivan Senior Counsel Office of the General Counsel

Tel. No. 632-632-4898 Fax No.632-636-2444 E-mail: rosullivan@adb.org

Francis Emmanuel Sr Financial Control Specialist

Controllers Department

Tel. No 632-632-4603 Fax No. 632-636-2606 E-mail: femmanuel@adb.org

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Barry J. Hitchcock Country Director Nepal Resident Mission

Tel. No. 977-1-422-7779 Fax No. 977-1-422-5063 E-mail: bhitchcock@adb.org

Surya P. Shrestha Sr Gov & Capacity Bldg. Officer

Nepal Resident MIssion

Tel. No. 977-1-422-7779 Fax No. 977-1-422-5063 E-mail: sshrestha@adb.org

B. Executing Agency Office of the Prime Minister and Council of Ministers (PMU) Singh Durbar, Kathmandu, Nepal

NAME POSITION AGENCY CONTACT DETAILS Bindra Hada Bhattarai

Chief Project Director

Office of the Prime Minister and Council of Ministers

Tel. No. 977-1-4211529 Mobile: 9851074353 E-mail: hadabindra@yahoo.com hadaopmcm@yahoo.com

Rabi Raj Pant Project Director - Administration

Office of the Prime Minister and Council of Ministers

Tel. No. 977-1-4211001 Fax No. 977-1-4211198 E-mail: ravipant123@hotmail.com

C. Implementing Agencies/Project Implementation Units Part 1: Rural E-Community Ministry of Information & Communications (MOIC) Singh Durbar, Kathmandu, Nepal

NAME POSITION AGENCY CONTACT DETAILS Sushil Ghimire Project Director MOIC Tel. No. 977-1-4211562

Fax No. 977-1-4221729 E-mail: sushilmoic@ntc.net.np

Part 2: Government Network Ministry of Environment, Science & Technology (MOEST) PIU: National Information Technology Center (NITC) Singh Durbar, Kathmandu, Nepal

NAME POSITION AGENCY CONTACT DETAILS Laxman Prasad Mainali

Joint Secretary MOEST Tel. No. 977-1-4216731 Mobile: 9851105383 E-mail: lmainali@gmail.com

Subarna Shakya Project Director NITC Tel. No. 977-1-4211917/ 4211710 Mobile: 9851032303 E-mail: sshakya@nitc.gov.np

16

Part 3 (i): E-Government Applications – Enterprise Architecture High Level Commission for Information Technology (HLCIT) Singh Durbar, Kathmandu, Nepal

NAME POSITION AGENCY CONTACT DETAILS Madan Prasad Pariyar

Project Director HLCIT Tel. No. 977-1-4224980 Fax No. 977-1-4244073 E-mail: madan_p@hlcit.gov.np

Part 3 (ii): E-Government Applications – National Identification System Ministry of Home Affairs (MOHA) Singh Durbar, Kathmandu, Nepal

NAME POSITION AGENCY CONTACT DETAILS Bishwa Prakash Pandit

Project Director MOHA Tel. No. 977-1-4211263 Fax No. 977-1-4211267 E-mail: pandit.bp@yahoo.com

Part 3 (iii): E-Government Applications – E-Governance Public Service Commission (PSC) Kamalpokhari, Kathmandu, Nepal

NAME POSITION AGENCY CONTACT DETAILS Kumar Prasad Poudyal

Project Director PSC Tel. No. 977-1-4415762 Fax No. 977-1-4419885 E-mail: kppoudyal@htp.com.np

Part 3 (iv): E-Government Applications – Land Records Management Ministry of Land Reform and Management (MOLRM) Singh Durbar, Kathmandu, Nepal PIU: Department of Land Reform and Management (DOLRM) Babar Mahal, Kathmandu, Nepal

NAME POSITION AGENCY CONTACT DETAILS Babu Ram Acharya Secretary MOLRM Tel. No. 977-1-4225366

Mobile: 98510-03374 E-mail: lamachourbabu@yahoo.com

Shatrughna Pudasainee

Project Director DOLRM Tel. No. 977-1-4220028 Fax No. 977-1-4230585 E-mail: pshatrughna@hotmail.com

Part 3 (v): E-Government Applications – Vehicle Registration/License Ministry of Labor and Transport Management (MOLTM)

NAME POSITION AGENCY CONTACT DETAILS

18 Appendix 1

Table A1.2: Detailed Cost Estimates by Financier ADB Government Item

Cost

$ Million % of Cost Category

$ Million

% of Cost Category

A. Base Cost 1. Rural e-Community 9.0 7.9 89 1.0 11 2. Government Network 4.4 3.7 83 0.7 17 3. e-Government Applications 12.8 11.0 86 1.8 14 4. Human Resources Development 1.5 1.5 100 0.0 0 5. Project Management Consultant 0.7 0.7 100 0.0 0 Subtotal (A) 28.3 24.8 88 3.5 12 B. Contingencies 1. Physical 2.6 0.2 7 2.4 93 2. Price 0.3 0.0 0 0.3 100 Subtotal (B) 2.9 0.2 7 2.7 93 Total 31.2 25.0 80 6.2 20

Source: Asian Development Bank estimates.

Appendix 2 19

IMPLEMENTATION ARRANGEMENTS

Office of the Prime Minister

ADB

Project Management Consultant

Project Management Unit

e-Government Applications

Government Network

Rural e-Community

HRD

MOIC

PIU

MOGA

NITC

MOEST

PIU

MOHHLCIT MOLTM PSC MOLRM

PIU PIU DOT PIU DOLRM

ADB = Asian Development Bank; DOLRM = Department of Land Reforms and Management; DOT = Department of Transport; HLCIT = High Level Commission for Information Technology; HRD = human resources development; MOEST = Ministry of Environment, Science, and Technology; MOGA = Ministry of General Administration; MOH = Ministry of Home; MOIC = Ministry of Information and Communications; MOLRM = Ministry of Land Reforms and Management; MOLTM = Ministry of Labor and Transport Management; NITC = National Information and Technology Center; PIU = project implementation unit; PSC = Public Service Commission. Source: ADB estimates.

Project Steering Committee

20 Appendix 3

IMPLEMENTATION SCHEDULE

Appendix 4

21

OUTLINE TERMS OF REFERENCE FOR PROJECT MANAGEMENT CONSULTANTS

A. Introduction

1. A firm of national consultants will be hired to assist the project management unit (PMU) established under the Office of the Prime Minister and Council of Ministers (OPMCM) in supervising and monitoring the implementation of the project components by various ministries. 2. The PMC will:

(i) assist the PMU in developing a comprehensive system for monitoring the Project’s performance, as prescribed in the project design and performance framework, and for identifying the performance parameters to be monitored during the implementation of the Project;

(ii) review the monthly progress reports submitted by the Implementing Agencies, identify potential problems in the implementation of each component, develop remedial measures to avoid or correct problems, and prepare a monthly progress report summary, including all the findings and recommendations, for the project director of the PMU, ADB, and the cofinancier if any;

(iii) organize a monthly progress review meeting with the Implementing Agencies and the contractors concerned, facilitate interagency coordination and cooperation between project components, reconcile any opposing views on the system design and implementation plans, and prepare a summary of each meeting for the project director of the PMU under OPMCM, ADB, and the cofinancier;

(iv) provide technical advice to the Implementing Agencies in case of technical disputes with contractors;

(v) review the fund withdrawal applications submitted by the Implementing Agencies, check their appropriateness and accuracy, and advise the chief project director of the PMU whether not to endorse them for payment; and

(vi) prepare a quarterly project progress report and a quarterly project performance monitoring and evaluation report to be submitted to ADB.

3. The project management consultant team will consist of (i) a team leader/information and communication technology (ICT) human resources development adviser (36 person-months), (ii) a network integration specialist (36 person-months), and (iii) a systems integration specialist (36 person-months).

B. Scope of Works

4. The consultant team will undertake the following tasks during the engagement:

(i) Assist OPMCM in establishing the PMU by preparing the job descriptions of PMU assignees and organizing the PMU reporting structure.

(ii) Assist OPMCM in administering the procurement plan and in evaluating proposals for civil works and systems development and installation contracts according to ADB’s Procurement Guidelines (2007, as amended from time to

Appendix 4

22

time), and in coordinating with the Asian Development Bank (ADB) counterpart to obtain ADB’s approval for key milestones in the course of awarding the contracts.

(iii) Assist the PMU in developing a comprehensive system for monitoring the Project’s performance, as prescribed in the project design and performance framework, and in identifying the performance parameters to be monitored during the implementation of the Project.

(iv) Review the monthly progress reports submitted by the Implementing Agencies, identify potential problems in the implementation of each component, develop remedial measures to avoid or correct problems, and prepare a monthly progress report summary, including all findings and recommendations, to be submitted to the project director of the PMU, ADB, and the cofinancier.

(v) Coordinate closely with the project manager of each Implementing Agency and keep track of day-to-day implementation status to identify any technical or contractual implementation problems in advance.

(vi) Organize a monthly progress review meeting with the Implementing Agencies and contractors concerned, facilitate interagency coordination and cooperation between project components, reconcile differing views on system design and implementation plans, and prepare a meeting summary to be submitted to the project director of the PMU, ADB, and the cofinancier.

(vii) Coordinate closely with the project manager for the human resources development (HRD) component, and provide technical assistance in developing and implementing the HRD programs prescribed in the project design.

(viii) When requested by the Implementing Agencies, examine the contractors’ work progress in comparison with the work plan, evaluate their performance, and recommend any remedial action for Implementing Agencies to undertake to better supervise the contractors.

(ix) Provide technical advice to the Implementing Agencies in case of technical disputes with contractors.

(x) Review the fund withdrawal applications submitted by the Implementing Agencies, check their appropriateness and accuracy, and advise the project director of the PMU whether or not to endorse them for payment.

(xi) Assist the PMU in maintaining the imprest account, preparing the statement of expenditure for liquidation, maintaining the project account by component and preparing annual project account report, maintaining the record of withdrawal applications, hiring an external auditor for the annual audit of the project account, and reviewing the audit report and providing feedback.

(xii) Prepare a quarterly project progress report and a quarterly project performance monitoring and evaluation report to be submitted to ADB and the cofinancier.

(xiii) Assist the PMU in meeting and coordinating with ADB’s or the cofinancier’s project inception and review missions, preparing the project administration memorandum, and examining the progress of the Project for their purposes.

(xiv) Assist the PMU in preparing a project completion report to be submitted to ADB and the cofinancier.

(xv) Provide technical and contractual management assistance to the PMU as requested by the project director.

5. The team leader/ICT HRD adviser will undertake the following tasks:

Appendix 4

23

(i) Design programs to build awareness, knowledge, and skills among the key stakeholders in ICT governance to help in improving the efficiency of e-service delivery to the community in consultation with the Implementing Agency, for the human resources development (HRD) component.

(ii) Develop an action plan to strengthen networking between training institutions and support for functional linkages.

(iii) Assist the Implementing Agency for the HRD component in revising the existing training curriculum and developing new curricula for public training institutions, to improve the quality of the training curriculum and materials in ICT governance.

(iv) Assist the Implementing Agency for the HRD component in developing an arrangement for sharing knowledge and experiences to promote ICT governance and applications through exchange and fellowship programs designed to recognize the contributions and commitment of exemplary civil servants and NGO leaders to the effective and efficient adoption of ICT governance applications.

(v) Assist the Implementing Agency for the HRD component in developing ICT governance courses, a new curriculum for ICT governance, and new teaching materials in ICT governance, in association with universities and research institutes.

Appendix 5

24

PROCUREMENT PLAN

Project Name: Nepal: Information and Communication Technology Development Project

Grant Number: 0106

Grant Amount: $25 million Executing Agency: Office of the Prime Minister and Council of Ministers

Date of First Procurement Plan: Date of This Procurement Plan: 7 December 2007

A. Project Procurement Thresholds

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

Procurement of Goods and Works Method Threshold ICB for Works > $1,000,000 ICB for Goods > $500,000 NCB for Works ≤ $1,000,000 but > $100,000 NCB for Goods ≤ $500,000 but > $100,000 Shopping for Works ≤ $100,000 Shopping for Goods ≤ $100,000 Direct Purchasing ≤ $10,000 ICB = international competitive bidding, NCB = national competitive bidding.

B. ADB Prior or Post Review 2. Except as ADB may otherwise agree to, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the Project.

Procurement of Goods and Works Procurement Method Prior or Post Comments ICB for Works Prior Usage subject to ADB’s Procurement Guidelines (2007, as

amended from time to time) (Chapter III) and Project Administration Instruction (PAI) 3.03.

ICB for Goods Prior Usage subject to ADB’s Procurement Guidelines (Chapter III) and PAI 3.03.

ADB = Asian Development Bank, ICB = international competitive bidding. NCB for Works

Prior

NCB Goods Prior

Usage subject to the provisions of NCB Annex,a Procurement Guidelines (para. 3.3/3.4), and PAI 3.04.

Shopping for Works Post Shopping for Goods Post

Usage subject to ADB’s Procurement Guidelines (para. 3.5) and PAI 3.04 C.

Limited International Bidding

Prior Usage subject to ADB’s Procurement Guidelines (Section 3.2) and PAI 3.03.

Direct Contracting Post ADB needs to be satisfied that the prices to be paid are reasonable, and the method applied is in accordance with ADB’s Procurement Guidelines (para. 3.6) and PAI 3.05 A.

a NCB Annex to Grant Agreement.

Appendix 5

25

Recruitment of Consulting Firms

Recruitment Method Prior or Post

Thresholds / Comments

Quality- and Cost-Based Selection (80:20) of firm by ADB

Prior Threshold: >$200,000 Executing Agency selects, negotiates, and manages the contract. Three EA submissions (to ADB) are required, namely: (i) draft RFP and shortlist, (ii) technical evaluation report, (iii) overall ranking report, (iv) draft negotiated contract. See Consulting Guidelines (Chapter II, A.1.a.) and PAI 2.02 (Part E, B). Type of proposal dependent on budget (see footnote 1 above).

Consultants Qualification Selection

Prior Threshold: ≤ $200,000 Included as a possible option. Executing Agency selects, negotiates and manages the contract.

Least-Cost Selection Prior Threshold: ≤ $100,000 Included as a possible option. Executing Agency selects, negotiates, and manages the contract.

C. Goods and Works Contracts (in excess of $1 million)

General Description

Value ($’000)

Procurement Method

Prequalification of Bidders (Yes/No)

Advertisement Date

Comments

System Development, Supply, and Installation (Rural E-Community) Wireless Broadband Network, Telecenters

7,700 ICB Yes December 2007

Single bid, multiple lots, following ADB’s Procurement Guidelines

(Government Network) Government Information and Data Center, Government Groupware

4,400 ICB Yes Single bid, multiple lots, following ADB’s Procurement Guidelines

(e-Government applications) Enterprise Architecture, Village Network, National Identification System, e-Governance for Public Service Commission, Land Records Management, Vehicle Registration and Driver’s Licenses

13,900

ICB Yes Single bids per sub-components following ADB’s Procurement Guidelines

ADB = Asian Development Bank, ICB = international competitive bidding.

Appendix 5

26

D. Consulting Services Contracts (in excess of $100,000) General Description

Contract

Value ($’000)

Recruitment

Method

Advertisement

Date

International or National Assignment

Comments Project Management Advisers

700 QCBS (80:20), STP

December 2007 National EA selects, negotiates, and contracts

EA = executing agency, QCBS = quality- and cost-based selection, STP = simplified technical proposal. 3. For the sake of economy and administration, the Executing Agency may call for bids in multiple lots as appropriate. Bids will be evaluated and compared on the basis of a lot or a combination of lots, or as a total of lots, to arrive at the least-cost combination for the Executing Agency.

Appendix 6

27

WITHDRAWAL OF GRANT PROCEEDS

(ADB’s Letter)

Appendix 6

28

Appendix 6

29

Appendix 6

30

Appendix 6

31

Appendix 6

32

Appendix 6

33

Appendix 7

34

DISBURSEMENT PROCEDURES

Reference: ADB’s Loan Disbursement Handbook dated January 2007 A. DIRECT PAYMENT PROCEDURE 1. ADB, pays a designated beneficiary, at the request of the Borrower, from the loan funds (Section 7 of the Handbook). Narrative procedures are in Appendix 14 of the Handbook. Requirements

(i) signed withdrawal application (form ADB-DRP/RMP in Appendix 5 of the Handbook)

(ii) summary sheet (form ADB-DRP-SS in Appendix 8 of the Handbook)

Supporting Documents (i) contract or confirmed purchase order (PO) indicating amount and due date (i) for payment of goods: supplier’s invoice, bill of lading, or other similar documents (ii) for payment of services: consultant’s claim or invoice (iii) for payment of civil works: claim or invoice from the contractor and a work progress

certificate signed by the project engineer and approved by the borrower’s authorized representative

B. COMMITMENT PROCEDURE 2. ADB, irrevocably agrees to reimburse a commercial bank for payments made or to be made to a supplier against a letter of credit (Section 8 of the Handbook). Narrative procedures are in Appendix 20 of the Handbook. 3. ADB issues a Commitment Letter against a letter of credit (LC), and agrees to pay (on behalf of the Borrower and out of loan funds) the negotiating bank for the payments made or to be made to the supplier in accordance with the terms of LC. Requirements

(i) signed application for commitment letter (form ADB-CL in Appendix 6 of the

Handbook) (ii) summary sheet (form in Appendix 9 of the Handbook)

Supporting Documents

(i) contract or confirmed PO (ii) two signed copies of the LC

4. ADB issues a Commitment Letter to the designated commercial bank (usually advising bank) as shown in Appendix 15 of the Handbook. A copy of ADB’s commitment letter is also provided to the EA/PMO for information.

Appendix 7

35

ADB’s Payment to the Commercial Bank

5. ADB pays from the loan account after the receipt of the confirmation from the supplier’s nominated commercial bank (normally a negotiating bank) which has paid for or agreed to pay in accordance with the LC terms. Requests for reimbursement from the nominated commercial bank are made in authenticated SWIFT or tested telex.

6. ADB’s approval is required for amendment to the LC involving changes such as:

(i) extension of the LC expiry date beyond the loan closing date of the loan account;

(ii) change in the LC’s value and currency; (iii) description or quantity of goods; (iv) country of origin; (v) beneficiary; and (vi) terms of payment

The forms are shown at Appendix 17 and 18 of the Handbook. 7. Amendments to the LC for: (i) extending the expiry date and shipping dates up to loan closing date; (ii) other amendments except those mentioned in para. 6 above. The Borrower simply informs ADB using the standard form in Appendix 19 of the Handbook and submits a signed copy of the amendment. C. REIMBURSEMENT PROCEDURE 8. ADB pays to the borrower’s account, or in some cases, to the project account for eligible expenditures, which have been incurred and paid for by the borrower or EA out of its budget allocation or its own resources (Section 9 of the Handbook). Narrative procedures are in Appendix 21 of the Handbook. Requirements

(i) signed withdrawal application (form ADB-DRP/RMP in Appendix 5 of the

Handbook) (ii) summary sheet (form ADB-RMP-SS in Appendix 8 of the Handbook)

Supporting Documents

(i) contract or confirmed PO (ii) copy of the invoice/bill/claim and delivery receipt (iii) evidence of payment showing the amount paid; the date of receipt and the

payee D. STATEMENT OF EXPENDITURES (SOE) UNDER REIMBURSEMENT PROCEDURE 9. This procedure requires no submission of supporting documents (see paragraphs 9.8 to 9.23 of the Handbook for details). Ceiling for the Project is $200,000 per item of expenditures. The SOE is used in lieu of the usual supporting documents and the summary sheet. It may also be used in connection with the liquidation or replenishment of the imprest account.

Appendix 7

36

10. The SOE forms are in Appendix 22 to 25 of the Handbook. E. INSTRUCTIONS FOR WITHDRAWALS 15. Before the first W/A is submitted to ADB, the name of the authorized representative(s) must be provided to ADB, through the Ministry of Finance, including the authenticated specimen signatures of the representative(s). 16. The W/A should be signed by the authorized representative(s), sequentially numbered and should not exceed five digits (00001, 00002, etc.). 18. The W/A forms and summary sheets to be used vary for the different procedures. A separate W/A for each currency requested should be submitted. The Project may use any of the above disbursement procedures. The WA forms can be downloaded from LFIS website http://lfis.adb.org.

19. The W/A to be submitted to ADB must be the signed original copy to the attention of Mr. Francis Emmanuel, Sr. Financial Control Specialist, CTLA-1 and copied to Mr. Kazuhiko Higuchi, Director, SATC. However, supporting documents may be in photocopies and the originals to be kept for audit purposes.

Appendix 7

37

Appendix 7

38

Appendix 7

39

Appendix 7

40

Appendix 8 41

PROFORMA OF THE EXECUTING AGENCY’S PROJECT PROGRESS REPORT A. Introduction and Basic Date Provide the following:

• ADB loan lumber, project title, borrower, executing agency(ies), implementing agency(ies);

• Total estimated project cost and financing plan; • Status of project financing including availability of counterpart funds and cofinancing; • Dates of approval, signing, and effectiveness of ADB loan; • Original and revised (if applicable) ADB loan closing date and elapsed loan period based

on original and revised (if applicable) loan closing dates; and • Date of last ADB review mission.

B. Utilization of Funds (ADB Loan, Cofinancing, and Counterpart Funds) Provide the following:

• Cumulative contract awards financed by the ADB loan, cofinancing, and counterpart funds (commitment of funds to date), and comparison with timebound projections (targets);

• Cumulative disbursements from ADB loan, confinancing and counterpart funds (expenditure to date), and comparison with time-bound projections (targets); and

• reestimated costs to completion, need for reallocation within ADB loan categories, and whether an overall project cost overrun is likely.

C. Project Purpose Provide the following:

• Status of project scope/implementation arrangements compared with those in the report and recommendation of the President (RRP), and whether major changes have occurred or will need to be made;

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

• An assessment of changes to the key assumptions and risks that affect attainment of the development objectives; and

• Other project developments, including monitoring and reporting on environmental and social requirements that might adversely affect the project’s viability or accomplishment of immediate objectives.

D. Implementation Progress Provide the following:

• Assessment of project implementation arrangements such as establishment, staffing, and funding of the PMO or PIU;

42 Appendix 8

• Information relating to other aspects of the EA’s internal operations that may impact on the implementation arrangements or project progress;

• Assessment of the progress of each project component, such as (i) recruitment of consultants and their performance; (ii) procurement of goods and works (from preparation of detailed designs and bidding documents to contract awards); and (iii) the performance of suppliers, manufacturers, and contractors for goods and works contracts;

• Assessment of progress in implementing the overall project to date in comparison with the original implementation schedule–quantifiable and monitorable target (include sample charts such as bar or milestone to illustrate progress, a chart showing actual versus planted expenditure, S-curve graph showing the relationship between physical and financial performance, and actual progress in comparison with the original schedules and budgets, the reference framework or guidelines in calculating the project progress;

• An assessment of the validity of key assumptions and risks in achieving the quantifiable implementation targets.

E. Compliance with Covenants Provide the following:

• The borrower’s compliance with policy loan covenants such as sector reform initiatives and EA reforms, and the reasons for any noncompliance or delay in compliance;

• The borrower’s and EA’s compliance with financial loan covenants including the EA’s financial management, and the provision of audited project accounts or agency financial statements; and

• The borrower’s and EA’s compliance with project-specific loan covenants associated with implementation, environment, and social dimensions.

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

Appendix 8 43

Framework and Guidelines in Calculating Project Progress A. Introduction 1. To ensure that all implementation activities are reflected in measuring implementation progress against the project implementation schedule, the term "physical completion” in the PPR has been changed to "project progress.” 2. Physical and pre-commencement activities are considered in calculating project implementation progress. These activities, which may include recruitment of consultants, capacity building, detailed design, preparation of bid and prequalification documents, etc., could constitute a significant proportion of overall implementation and therefore should be counted. 3. Each activity in the implementation schedule will be weighted according to its overall contribution (using time as a reference) to progress of project implementation. These weights will then be used to calculate the percentage of project progress along the entire time span of the project. This is to provide a holistic view of the pace of implementation. B. Framework for Compiling Activity List and Assigning Weights 4. As implementation activities and their corresponding weights will vary according to the type of project, sector, and country, sector divisions or RMs will be responsible for determining and including them in the project administration memorandum. The actual project implementation progress of these activities should be reported regularly through the EA’s quarterly project progress report. To ensure ADB-wide consistency, the following framework has been established; its application will be monitored through the PPR. a. Compilation of Activity List 5. Sector divisions or RMs concerned should identify major implementation activities and include them in the implementation schedule, which is attached as an appendix in the report and recommendation of the President (RRP). The implementation schedule should follow the critical path of the project’s major activities in project implementation taking account of various country, sector, and project constraints. b. Assignment of Weights 6. Corresponding weights for each activity should be assigned to ensure that “project progress" measures the percentage of achievement (nonfinancial except when the project has credit components) for all events during the entire duration of the implementation schedule. To avoid disproportionate assignment of weights, to the extent possible these should be evenly distributed along the implementation schedule. When activities are concurrent, avoid “double counting.” c. Computation of Project Progress 7. Once all activities are identified and corresponding weights assigned, project progress should be calculated using the following steps:

(i) Determine the actual percentage progress (nonfinancial) of each activity.

44 Appendix 8

(ii) Multiply these percentages by the assigned weight of each activity to arrive at the weighted progress.

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

Page 3 of this Appendix provides an illustration of this calculation using a generic sample implementation schedule and this Appendix, page 4 a specific example in the education sector.

Implementation Schedule with Activities and Weights

Yr1 Yr2 Yr3 Yr4 Yr5

A

a

B

b

Cd

c

De f

E

A C

T I

V I T

I E

S

1. Sum of all weights should equal 100 percent (a+b+c+d+e+f+g = 100%)2. When calculating the percentage of “project progress,” all completed activities should be counted as accomplished, regardless of when they

were scheduled to be completed. For example, when calculating the percentage of “project progress” after year 3, if activity D is completed inyear 3 rather than in year 2, it should still be included in the computation.

3. Total weight of each activity is as follows: Activity A–a; Activity B–b; Activity C–c; Activity D–d; and Activity E–e + f +g4. Project progress of a project is the summation of the actual percentage of progress for each activity multiplied by the total weight of each

activity.

Appendix 8 45

Sample Implementation Schedule

Activities Year 1 Year 2 Year 3 Year 4(a)

AssignedWeight

(b)Actual

Progress

(a) x (b)WeightedProgress

Establish PIU 5% 100% 6%

Establish Accreditation Board, etc. 5% 0% 0%

Appoint Staff and Budget 4% 75% 3%

Adopt Architecture Plans 2% 100% 2%

Shortlist Consulting Firms 6% 100% 6%

Prepare Fellowship Program 6% 76% 4%

Prepare Civil Works Tendering 30% 0% 0%

Civil Works: Classrooms, Dorms, etc. 6% 0% 0%

Procurement of Furniture and Equipment 16% 10% 2%

Field Work of Consultants 7% 0% 0%

Provide Fellowships 6% 0% 0%

Conduct Study Tours 6% 0% 0%

Provide Curriculum Standards 6% 0% 0%Total Weight 100%

Imp. Progress 24%

(a) Assigned weight for each activity(b) Actual progress of each activity(a) x (b) weighted progress for each activityProject progress = sum of all weighted progress for each activity

46 Appendix 9

Worksheet for Quarterly & Yearly Contract Awards/Commitments & Disbursement Projections ($ Million)( Important: Before completing this form, please read carefully the instructions printed at the back of this form. Refer to PAI Nos. 5.02. Issued in December 2001.)

PROJECT: PROJECTIONS MADE IN: LOAN/GRANT NO. SEGMENT NO. FUNDS (OCR, SF, ADF-IX, ATF2/) COUNTRY (Acronym) (Month, Year)

QP QP QP QP

QA QA QA QAQP QP QP QP

QA QA QA QA

1/ In accordance with the allocation of loan proceeds as defined in the loan documents, or any other detailed breakdown if found useful. NOTES AND REMARKS: Page ___ of ___ pages 2/ ATF = Asian Tsunami Fund; Projections should be for the ADB-ATF financed component only. QP-01-20______ QA = Quarterly Actual (already awarded/committed/disbursed, when projections are prepared). QP = Quarterly Projected (to be awarded/committed/disbursed), when projections are prepared).ADB Form No. 16/06 Revised September 2005

Apr, May, Jun 20_____ Jul, Aug, Sep 20_____ Oct, Nov, Dec 20_____

TOTAL OF THIS PAGE___ OF___PAGES (To be carried on next page)

6

3

GRAND TOTAL (LAST PAGE)

QUARTER 1Contracts Awarded on

Previous Year(s)

Jan, Feb, Mar 20_____

7

5

QUARTER 2

10

8

9

TOTAL (Carried Forward) FROM PREVIOUS PAGE ___ OF ___ PAGES

4

1

2

Month, Year Contract Awarded

Contract Value (Bank Financed)

Month Awarded/ Committed or To be

Awarded/ Committed

Contract Value/ Commitment (1)

Disbursement Amount Related to the Contract/ Commitment (2)

QA

Month Awarded/ Committed or To be

Awarded/ Committed

QP Disbursement Amount Related to the Contract/ Commitment (4)

Contract Value/ Commitment (3) QA

Disbursement Amount Related to

the Contract/ Commitment

(10)=(2+4+6+8)

Contract Value/ Commitment

(9)=(1+3+5+7)

QUARTER 4

Month Awarded/ Committed or To be

Awarded/ Committed

QP Disbursement Amount Related to the Contract/ Commitment (8)

Contract Value/ Commitment (7) QA

Ref. Line No.

Cate-gory 1/ CONTRACT/COMMITMENT ITEM /1

QUARTER 3

Month Awarded/ Committed or To be

Awarded/ Committed

QP Disbursement Amount Related to the Contract/ Commitment (6)

Contract Value/ Commitment (5)

QP

QA

TOTAL PROJECTED FOR THE YEAR 20___

(YP)=(QA) + (QP)

Appendix 10

47

PROJECT COMPLETION REPORT

Suggested Topics for Project Completion Reports to be Prepared by Borrowers (project, multiproject, sector, program, sector development program, and

technical assistance loans)

I. PROJECT DESCRIPTION A. Objectives B. Components (or subprojects for sector and multiprojects) C. Implementation methods D. Description and justification of changes in components (or subproject appraisal criteria)

or implementation methods

II. PROJECT IMPLEMENTATION A. Compare original and actual implementation schedules. Indicate delays, length and causes of delays, and remedial action taken. B. Compare cost estimates made during appraisal and actual costs (foreign and local). Local currency costs incurred, appropriate exchange rates for their conversion into US dollars, and the foreign exchange costs financed by cofinanciers must be compiled correctly with reference to audited project accounts. Indicate factors that contributed to any significant overruns or underruns. C. State problems or difficulties in recruiting consultants, with reference to ADB procedures. Assess the consultant's work and the working relationship between the executing agency (EA) and the consultant. Use of a design and monitoring framework is strongly recommended. D. State problems or difficulties encountered in procuring goods and services (including civil works) with reference to ADB procedures. Assess the supplier's or contractor's performance under the contract. E. Give the extent of compliance of the borrower and EA with loan covenants, with reasons for noncompliance or delays in compliance and the remedial actions taken. F. State reasons for any delays in loan utilization. Evaluate the appropriateness of the disbursement methods used. Justify the reallocation of loan proceeds. G. State problems or difficulties with subproject appraisal. Evaluate the EA’s performance and capacity to appraise subprojects.

III. INITIAL OPERATIONS A. Describe initial operations of the project and transitional problems encountered from project completion to initial operations.

48 Appendix 10

B. Describe measures taken to ensure continued smooth operation of the project relative to management, staffing, funding, and maintenance of project facilities. C. Analyze the prospects of the project benefits being realized.

IV. EVALUATION OF THE ASIAN DEVELOPMENT BANK’S PERFORMANCE A. Assess ADB's performance in supervising project implementation. Include comments on the adequacy of the consultants’ terms of reference and appropriateness of specifications in tender documents. Evaluate the effectiveness and timeliness of assistance extended by ADB to solve implementation problems. B. Comment on problems encountered with ADB's procedures. Note the measures taken to resolve these problems and suggest changes in procedures and requirements.

Appendix 11

49

AUDIT LETTER

ASIAN DEVELOPMENT BANK

South Asia Department Transport and Communications Division

Date Dear Sir or Madam:

Subject: Grant 0106-NEP: Information and Communications Technology Development Project

FINANCIAL REPORTING AND AUDITING REQUIREMENTS This letter is to ensure your timely compliance with the loan covenants and the quality of financial information as required by ADB. ADB's Handbook on the Financial Governance and Management of Investment Projects Financed by ADB (the handbook) is enclosed to guide you. ADB, by its Charter, is required to ensure that the proceeds of any loan made, guaranteed, or participated in by ADB are used for the purposes for which the loan was approved. ADB requires accurate and timely financial information from its borrowers to be assured that expenditure was for the purposes stated in the loan agreement. For this particular loan, the requirements are stipulated in sections 4.02(a) of the Grant Agreement of Information and Communications Technology Development Project. A copy of the Grant Agreement is enclosed for onward transmission by your office to your EA and the auditor(s), together with a copy of this letter. The following are the main requirements:

• ADB requires the EA to maintain separate project accounts and records exclusively for the Project to ensure that the loan funds were used only for the objectives set out in the Grant Agreement. The project accounts comprise the audited financial statements of the project and of the EA.

The first set of project accounts to be submitted to ADB covers the fiscal year ending 15 July 2008. As stipulated in the Grant Agreement, they are to be submitted up to 6 months after the end of the fiscal year. For this grant, the deadline is by January 2009. A sample report format with explanatory notes, is available in Section 5.82 (Appendix 11) of the handbook.

• The accounts and records for the project are to be consistently maintained by

using sound accounting principles. Please stipulate that your external auditor is to express an opinion on whether the financial report has been prepared using international or local generally accepted accounting standards and whether they have been applied consistently.

50 Appendix 11

ADB prefers project accounts to use international accounting standards prescribed by the International Accounting Standards Committee. Please advise your external auditor to comment on the impact of any deviations, by Office of the Prime Minister and Council of Ministers from international accounting standards.

• Please ensure that your external auditor specifies in the Auditor's Report the

appropriate auditing standards they used, and direct them to expand the scope of the paragraph in the Auditor's Report by disclosing the key audit procedures followed. Your external auditor is also to state whether the same audit procedures were followed for all supplementary financial statements submitted.

ADB wishes that auditors conform to the international auditing standards issued by the International Federation of Accountants. In cases where other auditing standards are used, request that your external auditor to indicate in the Auditor's Report the extent of any differences and their impact on the audit.

• The external auditor's opinion is also required on whether

- the proceeds of ADB's grant have been utilized only for the project as

stated in the Grant Agreement; - the financial information contains data specifically agreed upon between

the Office of the Prime Minister and Council of Ministers and ADB to be included in the financial statements;

- the financial information complies with relevant regulations and statutory requirements; and

- compliance has been met with all the financial covenants contained in the Grant Agreement.

• The Auditor's Report is to clearly state the reasons for any opinions that are

qualified, adverse, or disclaimers. • Actions on deficiencies disclosed by the external auditor in its report are to be

resolved by Office of the Prime Minister and Council of Ministers within a reasonable time. The external auditor is to comment in the subsequent Auditor’s Report on the adequacy of the corrective measures taken by Office of the Prime Minister and Council of Ministers

Compliance with these ADB requirements will be monitored by review missions and during normal project supervision, and followed up regularly with all concerned, including the external auditor. Yours sincerely, Kazuhiko Higuchi Director Transportation and Communications Division cc: External auditor of the EA

Appendix 12

51

GRANT 0106-NEP: INFORMATION AND COMMUNICATIONS TECHNOLOGY DEVELOPMENT PROJECT

STATUS OF COMPLIANCE WITH GRANT COVENANTS (As of 26 September_2008)

Covenant Status of Compliance

Sector 1. Wireless Broadband Network

The Government of Nepal shall cause the EA to build the wireless broadband network in a phased manner over the Project implementation period. During the first year of implementation, the network shall be pilot tested in three selected districts to establish its ownership and operation modality. During the second year of Project implementation, the pilot testing shall be expanded to 10 more districts. During the third year of Project implementation, the network shall be expanded to 25 districts, applying established ownership and operation modality. Each phase network shall be extended to further remote areas one year after its operation. (GA, Schedule 4, para. 7)

To be complied

2. Telecenters The Government of Nepal shall cause the EA to build and operate the Telecenters in step with the wireless broadband network expansion over a period of four years after the Effective Date. (GA, Schedule 4, para. 8)

To be complied

3. Government Network The Government of Nepal shall develop, install, test, and commission the Government's network, e-Government applications, and human resource development Parts in three years after the award of contracts. (GA, Schedule 4, para. 9)

To be complied

4. Voice Over Internet Protocol (VOIP) Service Provision The Government of Nepal shall fully liberalize VOIP service on a district-by-district basis following the spread of the wireless broadband networks of the Project so that rural internet service providers in concerned districts can interconnect with telephones and cellular mobile services of the incumbent operator to promote implementation of broadband internet which offers multiple service integration through a single network. (GA, Schedule 4, para. 12)

Not yet due

5. e-Government Operation Policies and Guidelines The Government of Nepal shall prepare and issue the e-Government operation policies and guidelines for the common enterprise architecture to be developed under the Project and

Not yet due

52 Appendix 12

Covenant Status of Compliance to be adopted as Nepal's standards for e-Government applications. Within 6 months after awarding the contract for development of enterprise architecture application, the e-Government developed under the Project shall be followed for further development of e-Government applications for establishing the interoperability among Nepal's ICT systems. (GA, Schedule 4, para. 13)

Environmental 6. The Government of Nepal (Recipient) shall ensure that any

unexpected negative environmental impact is addressed in accordance with ADB's environmental requirements. The Recipient shall ensure that the construction of the data center is carried out by taking into account the recommendations from the IEE and by strictly following the conditions attached in the building permit. The Recipient shall ensure that the Project is implemented in compliance with ADB's Environment Policy (2002), and Nepal's Environment Protection Act (1997) and the Environment Protection Regulation (1998).

To be complied

Social 7. Land Acquisition and Resettlement

The Government of Nepal (Recipient) shall ensure that the equipment for wireless broadband network is co-located with Nepal Telecom's tower facilities whenever required, and that Telecenters are housed on the existing land of the Recipient. In the event of (i) any unanticipated or unforeseen involuntary resettlement; (ii) land acquisition; and (iii) resettlement activities during Project implementation, the Recipient shall ensure that the Project is implemented in accordance with ADB's Involuntary Resettlement Policy (1995) and in accordance with all applicable laws and regulations of the Recipient). (GA, Schedule 4, para. 14)

To be complied

8. Labor Laws The Government of Nepal shall ensure that all Works, system development and installation contractors (i) comply with all applicable labor laws of Nepal; (ii) do not employ child labor for construction and maintenance activities; (iii) do not differentiate wages between men and women particularly for work of equal value; (iv) encourage employment of the local poor who meet the job and efficiency requirements, particularly women, dalits, indigenous/ethnic communities and other disadvantaged groups; and (iv) provide timely payment of wages on at least a monthly basis and safe working conditions to all workers. All civil works contracts shall include specific clauses on these undertakings. (GA, Schedule 4, para. 16)

To be complied

Appendix 12

53

Covenant Status of Compliance 9. Good Governance and Anticorruption

Consistent with ADB's and Nepal's commitment to good governance, accountability and transparency, Nepal shall ensure that the Project funds are utilized effectively and efficiently to implement the Project and to achieve the Project objectives. Nepal shall (i) undertake necessary measures to create and sustain a corruption-free environment; (ii) ensure that Nepal's Anticorruption Law and ADB's Anticorruption Policy (1998. as amended to date), are strictly enforced and are being complied with during Project implementation, and that the relevant provisions of ADB's Anticorruption Policy are included in all bidding documents for the Project; (iii) facilitate in ADB's exercise of its right to investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive or coercive practices relating to the Project; (iv) conduct periodic inspections on the Project contractor's activities related to fund withdrawals and settlements; and (v) ensure that all contracts financed by ADB in connection with the Project include provisions specifying the right of ADB to audit and examine Project related records and accounts of the EA and all contractors, suppliers, consultants, and other service providers. Nepal shall cooperate with any audit and investigation and extend necessary assistance, including access to all relevant books and records, as well as engagement of independent auditors and experts that may be needed for satisfactory completion of such audits and investigations. (GA, Schedule 4, para. 17)

To be complied

Financial 10. The Government of Nepal shall (i) maintain, or cause to be

maintained, separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; (iii) furnish to ADB, as soon as available but in any event not later than 6 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors' opinion on the use the Grant proceeds and compliance with the financial covenants of the Grant Agreement as well as on the use of the procedures for imprest account/statement of expenditures), all in the English language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request. (GA, Article IV, Section 4.02)

To be complied

54 Appendix 12

Covenant Status of Compliance 11. Imprest Account, Statement of Expenditures

Except as ADB may otherwise agree, the Government of Nepal (Recipient) shall establish immediately after the Effective Date, and imprest account at commercial bank acceptable to ADB for Part 4. The imprest account shall be established, managed, replenished and liquidated in accordance with ADB's Loan Disbursement Handbook and detailed arrangements agreed upon between the Recipient and ADB. The currency of the imprest account shall be Dollar. The initial amount to be deposited into imprest account shall not exceed the lower of (i) the estimated expenditure to be financed from the imprest account for the first 6 months of Project implementation, or (ii) the equivalent of 10% of the Part 4 amount. The statement of expenditures procedure may be used for reimbursement of eligible expenditures and to liquidate advances provided into the imprest account, in accordance with ADB's Loan Disbursement Handbook and detailed arrangements agreed upon by the Recipient and ADB. (GA, Schedule 2, para 5 [a] and [b]).

To be complied

Others 12. As the EA, the Office of the Prime Minister and Council of

Ministers (OPMCM) shall be responsible for overall implementation and coordination of the Project. Within 1 month of the Effective Date, the Project Management Unit shall be established under the EA and shall comprise at least a Chief Project Director, a Project Director who shall be the joint secretary from OPMCM to be responsible for administrative aspects and another Project Director who shall be the Executive Director of the National Information Technology Center, to be responsible for technical aspects, and a treasurer. The Chief Project Director shall have overall responsibility for Project management. The PMU shall be supported by Project management consultants who shall provide technical inputs for appropriate supervision of Project implementation. (GA, Schedule 4, paras 1 and 2).

Being complied

13. Parts of the Project shall be implemented by respective Implementing Agencies (IAs): (i) Ministry of Information and Communications shall be the IA for Part 1; (ii) Ministry of Environment, Science and Technology for Part 2; (iii) High-Level Commission for Information Technology shall be the IA for Part 3 (i);

Being complied

Appendix 12

55

Covenant Status of Compliance (iv) Ministry of Home shall be the IA for Part 3 (ii); (v) Public Service Commission shall be the IA for Part 3 (iii); (vi) Ministry of Land Reforms and Management shall be the IA for Part 3 (iv); (vii) Ministry of Labor and Transport Management shall be the IA for Part 3 (v); and (viii) Ministry of General Administration shall be the IA for Part 4 (GA, Schedule 4, para. 3)

14. Within 1month of the Effective Date, the Government of Nepal shall cause the following Project Implementation Units (PIUs) to be established by the following Ministries below: (i) Ministry of Environment, Science and Technology shall designate National Information and Technology Center as PIU for Part 2; (ii) Ministry of Land Reforms and Management shall designate the Department of Land Reforms and Management as a PIU for Part 3 (iv); and (iii) Ministry of Labor and Transport Management as PIU for Part 3 (v). For other Parts of the Project, the respective IA shall establish a PIU headed by a Project Manager. The PIU shall (i) coordinate with the contractors and monitor the progress of day-to-day management and implementation; (ii) prepare withdrawals applications to submit tot he PMU under the EA for endorsement; (iii) prepare monthly progress reports to submit to the PMU under the EA; (iv) be responsible for procurement; and (v) maintain Project accounts and prepare the annual reports. Within 1 month of the Effective date, the Government of Nepal shall cause the Project Steering Committee (PSC) to be established to provide overall supervision on Project implementation and coordinate issues related to Project implementation. The PSC shall be chaired by the Chief Secretary, shall have the Chief Project Director acting as vice Chairman and the Executive Director of National Information and Technology Center as secretary. The PSC shall comprise the Secretary of Ministry of Information and Communications and Ministry of Environment, Science and Technology in addition to the member Secretary of High-Level Commission for Information Technology. The PSC shall meet on a regular basis, at least twice a year, or more as necessary. The PSC shall set the direction for overall Project implementation, provide guidance to the PMU on specific Project implementation issues and resolve any controversies between PIUs. (GA, Schedule 4, paras 4, 5 and 6)

Being complied

56 Appendix 12

Covenant Status of Compliance 15. Fielding of Consultants

Except as ADB may otherwise agree, the Government of Nepal shall apply quality- and cost-based selection for selecting and engaging consulting services. (GA, Schedule 3, para. 7)

To be complied

Appendix 13

57

LIST OF ADB REFERENCE MATERIALS

A. Project Related

1. Report and Recommendation of the President to the Board of Directors (Dec 2007)

http://www.adb.org/Documents/RRPs/NEP/38347-NEP-RRP.pdf 2. Grant Agreement 3. Minutes of Grant Negotiations

B. Consultants. May be downloaded from the following website: http://www.adb.org/Consulting/documents.asp

3. Guidelines on the Use of Consultants by ADB and Its Borrowers (Feb 2007) http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf

4. Consulting Services Operations Manual (2008) http://www.adb.org/Documents/Manuals/Consulting-Services-Operations Manual/CSOM.pdf

C. Procurement. May be downloaded from the following website:

http://www.adb.org/Procurement/prequalification-bid-documents.asp 5. Guidelines on Procurement under ADB Loans (Feb 2007)

http://www.adb.org/Documents/Guidelines/Procurement/default.asp D. Disbursement

6. Disbursement Letter issued by Controller’s Department (Appendix 6 of the PAM) 7. Loan Disbursement Handbook (Jan 2007)

http://www.adb.org/Documents/Handbooks/Loan_Disbursement/default.asp E. General – may be downloaded from the following website

http://www.adb.org/Integrity/ (Dec 2007) http://www.adb.org/Documents/Policies/Environment/default.asp (Nov 2002) http://www.adb.org/Documents/Policies/Involuntary_Resettlement/default.asp (Aug 1995) http://www.adb.org/Documents/Policies/Indigenous_Peoples/default.asp (Apr 1998)

http://www.adb.org/Documents/Handbooks/Borrowers_Fin_Gov_Mgt_Investment/borrowers_financial.pdf (2006)