Major Change of Northwest Region Power Transmission Line Project (UZB 47296)
Revised Project Administration Manual
Project Number: 47296-001 Loan Number: 3285 June 2021
Uzbekistan: Northwest Region Power Transmission Line Project
CONTENTS
ABBREVIATIONS III I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 3 A. Project Readiness Activities 3 B. Overall Project Implementation Plan 4 III. PROJECT MANAGEMENT ARRANGEMENTS 6 A. Project Implementation Organizations: Roles and Responsibilities 6 B. Key Persons Involved in Implementation 6 C. Project Organization Structure 7 IV. COSTS AND FINANCING 10 A. Detailed Cost Estimates by Expenditure Category ($ million) 11 B. Allocation and Withdrawal of Loan Proceeds 12 C. Detailed Cost Estimates by Financier ($ million) 13 D. Detailed Cost Estimates by Outputs/Components ($ million) 14 E. Detailed Cost Estimates by Year ($ million) 15 F. Contract and Disbursement S-Curve 16 G. Fund Flow Diagram 17 V. FINANCIAL MANAGEMENT 18 A. Financial Management Assessment (Historical) 18 B. Action Plan 23 C. Disbursement 26 D. Accounting 26 E. Auditing 26 VI. PROCUREMENT AND CONSULTING SERVICES 27 A. Advance Contracting and Retroactive Financing 27 B. Procurement of Goods, Works, and Consulting Services 28 C. Procurement Plan 29 D. Methods, Thresholds, Review and 18-Month Procurement Plan 29 E. Indicative List of Packages Required Under the Project 31 F. List of Awarded, Ongoing, and Completed Contracts 31 G. Non-ADB Financing 35 VII. SAFEGUARDS 36 VIII. GENDER AND SOCIAL DIMENSIONS 40 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 41 A. Project Design and Monitoring Framework 41 B. Monitoring 44 C. Evaluation 45 D. Reporting 45 E. Stakeholder Communication Strategy 45 X. ANTICORRUPTION POLICY 46 XI. ACCOUNTABILITY MECHANISM 47 XII. RECORD OF THE PROJECT ADMINISTRATION MANUAL CHANGES 47
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Project Administration Manual Purpose and Process
1. The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM.
2. JSC National Electric Grid of Uzbekistan (NEGU), the executing agency, is wholly responsible for the implementation of ADB financed project, as agreed jointly between the borrower and ADB, and in accordance with government and ADB’s policies and procedures. ADB staff is responsible to support implementation including compliance by NEGU of its obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.
3. At Loan Negotiations the borrower and ADB shall agree to the PAM and ensure consistency with the Loan agreement. Such agreement shall be reflected in the minutes of the Loan Negotiations. In the event of any discrepancy or contradiction between the PAM and the Loan Agreement, the provisions of the Loan Agreement shall prevail.
4. After ADB Board approval of the project's report and recommendations of the President (RRP) changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.
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ABBREVIATIONS
ADB – Asian Development Bank AH – Affected household EA – executing agency EMP – environmental management plan FMA – financial management assessment FY – fiscal year GWh – gigawatt-hour ha – hectare IEE – initial environmental examination IFRS – International Financial Reporting Standards JSC – joint-stock company km – kilometer kV – kilovolt LARP – land acquisition and resettlement plan MOF – Ministry of Finance NEGU – JSC National Electric Grid of Uzbekistan PAM – project administration manual PMU – project management unit PRC – the People’s Republic of China QCBS – quality- and cost-based selection TPP – thermal power plant
I. PROJECT DESCRIPTION
1. Project's rationale, location, and beneficiaries. The objectives of the proposed project as originally approved were to (i) improve power transmission network capacity and reliability in the northwest region of the country, the Karakalpakstan and Khorezm regions; (ii) reduce transmission losses; and (iii) improve the operational efficiency of the power sector. The project will strengthen energy security through improved power system reliability and efficiency by constructing a new domestic transmission line without passing through any other country.1 The new line will evacuate power from Takhiatash Thermal Power Plant (TPP).2 The project will also increase power supply reliability for the Karakalpakstan 3 and Khorezm 4 regions in the northwestern part of Uzbekistan where major investments are scheduled, benefiting at least three million people. The project’s scope has been expanded to include two additional transmission investments: (i) the restoration of 64.5 kilometers (km) of the 500-kilovolt (kV) transmission line between the Guzar substation in the Surkhandarya region to the border with Tajikistan for reconnection to the Regar substation in Tajikistan, and (ii) expansion of transmission capacity to serve the growing demand in the Jizzakh region through the construction and expansion of substations and the construction of a 142 km double-circuit 220 kV transmission line between substations in Syrdarya and Zafarabad. The project title will change to “Uzbekistan Power Transmission Improvement Project.” The expanded scope will be financed through surplus loan proceeds through a major change in scope approved by the Board.
2. Impact and Outcome. The project’s impact will be adequate and reliable power supply in Uzbekistan by 2023. The outcome will be an expanded and modernized high-voltage transmission grid in Uzbekistan.
3. Outputs. The proposed change in scope will produce two additional outputs: (i) 64.5 km of the Guzar-Regar 500 kV transmission line restored, and (ii) 142-km double-circuit 220 kV transmission line between the Syrdarya TPP and the Zafarabad substation in the Jizzakh region constructed. Transmission capacity of the Guzar-Regar line will increase to 900 MW. Transmission capacity to the Jizzakh region from the Syrdarya TPP complex will increase from 325 MW to 525 MW. The project outputs will now consist of the following components:
(i) Strengthening of northwest region power transmission network. Construction of 220 kV single-circuit overhead transmission line between Takhiatash TPP and Khorezm substation (197.4 km), and between Khorezm substation and Ellikkala substation (166.1 km) totaling 364 km. (ii) Expansion, rehabilitation and/or construction of three substations. Comprising of (a) rehabilitation and expansion of 220/110 kV open switchyards at Takhiatash TPP, (b) rehabilitation and expansion of 220/110 kV Khorezm substation, and (c) construction of a 500/220 kV Ellikkala substation. (iii) Support for institutional development and capacity building. Comprising of (a) upgrading Joint-Stock Company (JSC) Uzbekenergo’s transmission system planning
1 The existing transmission line from Takhiatash to Navoi passes through Turkmenistan. Although the transmission assets belong to Uzbekistan, the difficulty to maintain them causes frequent and prolonged outage which brings down production rate, and hampers development of small-scale businesses which lead to people’s dissatisfaction. 2 Takhiatash TPP is the main source of power supply in the Karakalpakstan and Khorezm regions. The existing Takhiatash TPP has installed capacity of 870 megawatt (MW). Two new CCGT of 250 MW have been planned for Takhiatash TPP. With the proposed project, the surplus power can be reliably transmitted to the load centers. 3 Karakalpakstan is about 37% of the land area of Uzbekistan and has a population of 1.7 million people and is rich in natural resources. 4 Khorezm has a population of 1.6 million people. It is one of the agro-industrial regions. 2
and dispatch automation, (b) strengthening of the Uzbekenergo’s transmission assets management system, (c) external auditing of project account, and (d) strengthening of Uzbekenergo’s operation and maintenance capacity for transmission assets. (iv) Rehabilitation of the Guzar–Regar transmission line. The 64.5 km 500 kV transmission line from Guzar to Regar restored. (v) Construction of the Syrdarya–Zafarabad substations. The 142-km double-circuit 220 kV transmission line between the Syrdarya TPP and the Zafarabad substation in the Jizzakh region constructed.
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II. IMPLEMENTATION PLANS
A. Project Readiness Activities
Original Scope 2015 2016 Responsible Agency Indicative Activities Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Advance action for recruitment of project supervision and management consultants X X X EA-PMU Procurement of goods contracts X EA-PMU Loan negotiations X EA ADB Board approval X ADB Loan signing X ADB-GOU Government Legal opinion provided X GOU Government budget inclusion X GOU Loan effectiveness X GOU-ADB ADB = Asian Development Bank, EA = Executing Agency, GOU = Government of Uzbekistan, PMU = project management unit, Q = quarter.
Major Change in Scope 2020 2021 Indicative activities Responsible Agency Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Advance action on procurement and project supervision and management consultants X EA-PMU Retroactive financing actions X X EA-PMU ADB Board approval X ADB Sign Loan Agreement X ADB-GOU ADB = Asian Development Bank, EA = Executing Agency, GOU = Government of Uzbekistan, PMU = project management unit, Q = quarter.
B. Overall Project Implementation Plan
Project Implementation Schedule (Original Project) Indicative Activities 2015 2016 2017 2018 2019 2020 2021 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 A. Loan Approval Loan Negotiation ADB Board Approval Loan Signing Loan Effectiveness
B. Project Outputs [Physical] 1 220 kV Transmission Line 1.1 Bidding Documents and Specification Preparation 1.2 Bidding Period 1.3 Bid Evaluation 1.4 Contract Negotiation and Award 1.5 Site Preparation and Civil Works 1.6 Manufacturing Materials and Equipment 1.7 Construction and Installation 1.8 Commissioning and Final Test 1.9 Completion of Contract
2 Substations Rehabilitation, Expansion, and Construction 2.1 Bidding Documents and Specification Preparation 2.2 Bidding Period 2.3 Bid Evaluation 2.4 Contract Negotiation and Award 2.5 Site Preparation and Civil Works 2.6 Equipment Procurement and Manufacturing 2.7 Installation 2.8 Commissioning and Final Test 2.9 Completion of Contract
[Non-physical] 3 Project Supervision and Management Consultants 3.1 RFP issued 3.2 Proposal evaluation 3.3 Contract negotiation and award 3.4 Consulting team mobilization 3.5 Project supervision and management C. Loan Closing ADB = Asian Development Bank, kV = kilovolt, RFP = request for proposal.
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Project Implementation Schedule (Major Change in Scope) PROJECT IMPLEMENTATION SCHEDULE - Major Change in Scope Indicative Activities 2021 2022 2023 2024 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 A. Loan Approval Project appraisal and due diligence preparation (Major Changes to Loan) ADB Board Approval for Major Changes for Loan Signing Amendment for Loan Project «Restoration of the high-voltage line 500 kV Guzar-Regar on the B. territory of the Republic of Uzbekistan» [Physical] 1 Restoration of the 500 kV Transmission Line 1.1 Site Preparation and Civil Works 1.2 Manufacturing Materials and Equipment 1.3 Construction and Installation 1.4 Commissioning and Final Test 1.5 Completion of Contract
«Construction of 220 kV Substation «Zafarobod» and two HVL-220 kV C Syrdarya TPP - Substation «Zafarobod» in the Jizzakh region»
2 Construction of 220 kV Digital Substation «Zafarobod» 2,1 Bidding Documents and Specification Preparation 2,2 Bidding Period 2,3 Bid Evaluation 2.4 Contract Negotiation and Award 2.5 Site Preparation and Civil Works 2.6 Preparation Design 2.7 Equipment Procurement and Manufacturing 2.8 Construction and Installation 2.9 Commissioning and Final Test 2.10 Completion of Contract
3 Construction of two HVL-220 kV "Syrdarya TPP" to Substation "Zafarobod" 3,1 Bidding Documents and Specification Preparation 3,2 Bidding Period 3,3 Bid Evaluation 3,4 Contract Negotiation and Award 3,5 Site Preparation and Civil Works 3,6 Preparation Design 3,7 Equipment Procurement and Manufacturing 3,8 Construction and Installation 3,9 Commissioning and Final Test 3,10 Completion of Contract
[Non-physical] 4 Project Supervision and Management Consultants 4,1 Consulting team mobilization 4.2 Project supervision and management
5 External Auditing 5.1 RFP issued 5.2 Proposal evaluation 5.3 Contract negotiation and award 5.4 External auditing C. Loan Closing ADB = Asian Development Bank, HVL= high-voltage line, kV=kilovolt, RFP = request for proposal, TPP = thermal power plant.
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III. PROJECT MANAGEMENT ARRANGEMENTS
A. Project Implementation Organizations: Roles and Responsibilities
Project Implementation Organizations Management Roles and Responsibilities • MOF on behalf of the Borrower Republic of Uzbekistan MOF representing for external borrowing
Ensuring loan proceeds are used in accordance with the
Loan Agreement Handling of issues pertaining to project-related taxes and duties Electricity tariff setting
• NEGUa Executing Agency Project execution, including consultant recruitment and procurement of all contract Funding civil work contracts cost, PMU recurrent costs, and balance of project cost (financial charges) Project progress reporting to ADB
• ADB Lender Main project financier
ADB = Asian Development Bank, MOF = Ministry of Finance, NEGU = Joint-Stock Company National Electric Grid of Uzbekistan, PMU = project management unit. a On 27 March 2019, the Presidential Resolution No. PP-4249 decree reorganized Joint-Stock Company (JSC) Uzbekenergo into three joint-stock companies: (i) JSC Thermal Power Plants (TPP)to manage thermal power plants that generate electricity and thermal power; (ii) NEGUto manage main electric networks; and (iii) JSC Regional Electrical Networks (REN)to manage territorial electric networks enterprise distribution to end-users.
B. Key Persons Involved in Implementation
Executing Agency JSC NEGU Officer's Name Mr. Dadajon Isakulov Position Chairman of the Board Telephone (+998 71) 2336128 Email address NEGU PMU
Officer's Name Khusan Aliev Position Project Manager Telephone Email address NEGU PMU
Osiyo str. 42, Tashkent, 100084, Uzbekistan
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ADB Division Director Staff Name Joonho Hwang Position Director, Energy Division, Central and West Asia Department (CWRD/CWEN) Telephone No. +63-2-8632-6387/4479 Email address [email protected]
Mission Leader Staff Name Michael Trainor Position Energy Specialist, CWEN Telephone No. +63-2-86321407/1406 Email address [email protected]
C. Project Organization Structure
4. Joint-Stock Company (JSC) National Electric Grid of Uzbekistan (NEGU), the project executing agency, has established a dedicated full-time project management unit (PMU). The PMU will administer all consulting and procurement contracts on behalf of NEGU.
5. The PMU Manager will be supervised by the Deputy Chairman of the Board of Investments/Head of Department for Attraction of Foreign Investments and Implementation of Investments Projects who will report to the Chairman of JSC NEGU. The PMU will be the main point of contact for working communication between JSC NEGU and the Asian Development Bank (ADB). The PMU will coordinate the consultants and contractors.
6. The PMU, assisted by the consultants, will prepare and submit the necessary project plans, request for proposal and bidding documents, proposal and bid evaluation reports, progress reports, applications for withdrawal of funds, and any other required reports to ADB.
7. The PMU Manager will have appropriate academic qualifications with experience of working on large investment project implementation and/or operations. The PMU will comprise of (i) a dedicated manager, (ii) procurement specialists, (ii) transmission engineers, (iii) substation engineers, (iv) accountant, (v) social and environmental specialists, and (vii) interpreters.
8. The PMU will include the positions with the following terms of reference:
Position Terms of Reference Project Manager • Manage the project implementation, schedule, and budget - Khusan Aliev • Manage project management unit (PMU) staff and PMU activities • Manage supervision and project management consultants and contractors • Undertake administrative coordination and liaising with financiers • Prepare project reports and other project documentation • Coordinate with regional managers, regional project implementation units in the respective regions • Be responsible for keeping record of all project related correspondence and data • Be responsible for coordinating Asian Development Bank (ADB) missions and meetings with Joint-Stock Company National Electric Grid of Uzbekistan (NEGU) Procurement • Lead recruitment of project management and supervision consultant Specialist • Lead procurement of goods and works • Provide inputs identify and resolve issues in the area of specialty
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Position Terms of Reference • Monitor compliance of consultants and contractors with contract requirements • Assist the project manager in contract administration of the consultants and contractors • Prepare overall project progress report • Prepare contract award and disbursement projections • Coordinate with other Specialists in the PMU in the respective regions Transmission • Coordinate with the project manager in ensuring efficient project Engineer implementation; -Rikhsitilla Yakubov • Prepare technical data and inputs to project reports and other project documentation • Review the contractor's design submissions • Supervise and monitor the project implementation of related transmission lines works • Monitor progress against plan • Ensure adherence to project quality assurance plan Substation • Coordinate with the project manager in ensuring efficient project Engineers implementation - Turaev Umid • Prepare technical data and inputs to project reports and other project - Umarova Malika documentation - Abdulaev Akmal • Review the contractor's design submission • Supervise and monitor the project implementation of related substations work • Monitor progress against plan • Ensure adherence to project quality assurance plan Accountant • Maintain project accounts - Alimardon Ziyotov • Prepare withdrawal application • Prepare reports on the project disbursement as required by respective Financial Specialist financiers and government authorities - Khushnud Jumaev • Monitor loan covenants • Prepare project financial statements and reports • Provide inputs identify and resolve issues in the area of specialty • Assist Project Manager in delivery of his/her duties • Coordinate with other Specialists in the PMU in the respective regions Environmental and • Ensure all necessary government permits and license, including ecological Social Specialist expertise opinion, for all civil works will be obtained; - Aziz Botirov • Ensure environmental management plan (EMP) included in bidding documentation and contract document Consultants • Review and clear contractor’s site-specific EMPs (SEMPs); - Abdullah • Ensure that the SEMPs contain coronavirus disease (COVID-19) health and Kuchkarov safety management plan following international good practice and relevant national/local requirements • Carry out public consultation during project implementation • Establish a grievance redress mechanism (GRM) and act as the GRM secretary to make sure that the GRM is operational to effectively handle environmental and social concerns of project affected persons • Build up and sustain institutional capacity in environmental management • Supervise contractors in the implementation of the EMP for overall compliance with ADB Safeguard Policy Statement (2009) requirements and project environment-related legal covenants
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Position Terms of Reference • Conduct environmental monitoring and ensure that the day-to-day construction activities are carried out following the EMP and SEMPs and in an environmentally-sound and sustainable manner • Ensure corrective actions are implemented when necessary • Prepare semiannual environmental monitoring reports and submit to ADB for disclosure, within 30 days after a completion of the monitoring period, until ADB’s Project Completion Report is issued • Disclose relevant information from environmental safeguards documents (including semiannual environmental monitoring reviews) to affected persons • Report in a timely manner to ADB of any noncompliance or breach of ADB safeguard requirements • Update the project’s initial environmental examination in case of unanticipated impacts • Work closely with contractor’s supervisor (project engineer, environmental and social officer, and health and safety specialist), monitor (cross check) and supervise the contractor in implementing the EMP • Supervise monitoring plan and environmental management framework measurements in accordance with EMP requirements • Ensure, together with the resettlement consultant, the updating of the section-LARPs following detailed design and their submission to ADB for review • Orient the contractors of the LARP-related requirement for commencing civil works in LAR-sections (i.e. completion of compensation payments and and approval of LARP completion report, and preparation/implementation of corrective action plan in case of unanticipated LAR impacts) and monitor their compliance • Closely coordinate with the local hokimiyats on the valuation of affected assets, disbursement of compensation payments, land allocation and other related activities • Ensure timely submission of LARP completion reports and semi-annual social monitoring reports • Monitor the contractor’s work to ensure that temporarily affected land are restored to their original condition after completion of works and that the farmers are able to resume their agricultural activities • In the event that there are any unforeseen social risks and consequences during the construction, implementation or operation of the Project that were not considered by the LARP, immediately inform ADB about the occurrence of such risks or impacts, with a detailed description of the event and a proposal for a plan and corrective actions • Report any actual or potential violations of the measures and requirements set forth in the LARP as soon as they become aware of the violation.
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9. The project implementation organizational structure will be as below:
IV. COSTS AND FINANCING
10. The project costs consist of (i) goods and works contracts for construction of 220 kV and 500 kV transmission lines; (ii) goods and works contracts for rehabilitation, expansion, and construction of five substations; (iii) consulting services; (iv) institutional capacity development; (v) environmental impact mitigation; (vi) land acquisition and resettlement; (vii) taxes and duties; (viii) recurrent costs; and (ix) financial charges. ADB loan will cover the entire costs for goods contracts; works contracts associated with outputs 4 and 5; consulting service contracts; and capacity building contracts, excluding taxes and duties, which will be covered by the Government. NEGU will finance the costs of the entire civil works, environmental impact mitigation, land acquisition and resettlement, financing charges, and PMU recurrent costs.
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A. Detailed Cost Estimates by Expenditure Category ($ million)
ORIGINAL PROJECT REVISED PROJECT
Foreign Local Total Foreign Local Total A. Investment Costsa Exchange Currency cost Exchange Currency cost 1 Takhiatash-Khorezm-Ellikkala 220kV Line 84.02 47.66 131.68 27.80 47.66 75.46 a. Physical investment 84.02 46.33 130.35 27.80 46.33 74.13 b. Environmental impact mitigation - 1.00 1.00 - 1.00 1.00 c. Land acquisition and resettlement - 0.33 0.33 - 0.33 0.33 2 Substations and switching stations 39.73 14.52 54.25 19.14 14.52 33.66 a. Physical investment 39.73 14.26 53.99 19.14 14.26 33.40 b. Environmental impact mitigation - 0.26 0.26 - 0.26 0.26 c. Land acquisition and resettlement ------3 Syrdarya TPP – Zafarabad Substation 220kV line - - - 27.29 40.02 67.31 a. Physical investment 27.29 39.33 66.63 b. Environmental impact mitigation - 0.40 0.40 c. Land acquisition and resettlement - 0.29 0.29 4 Guzar-Regar 500kV transmission line - - - 10.36 4.97 15.33 a. Physical investment 10.36 4.43 14.80 b. Environmental impact mitigation - 0.40 0.40 c. Land acquisition and resettlement - 0.14 0.14 5 Institutional development 8.33 - 8.33 9.31 - 9.31 a. Project implementation consulting services 2.50 - 2.50 4.47 - 4.47 b. Transmission system planning 0.53 - 0.53 - - - c. Asset Management system 4.80 - 4.80 - - - d. External audit 0.50 - 0.50 0.50 - 0.50 e. Asset maintenance and management 4.35 - 4.35 6 Taxes and Duties - 25.25 25.25 - 22.89 22.89 Subtotal (A) 132.08 87.43 219.51 93.92 130.05 223.97 B. Recurrent Costs - 1.30 1.30 - 1.30 1.30 Total Base Cost 132.08 88.73 220.81 93.92 131.35 225.27 b C. Contingencies 1 Physical 14.00 6.43 20.43 4.55 11.60 16.15 2 Price 4.05 1.71 5.76 0.60 2.39 2.99 Subtotal (C) 18.05 8.14 26.19 5.15 13.99 19.14 D. Financing Charges During Implementationc 1 Interest during implementation 7.31 - 7.31 2.19 - 2.19 2 Commitment charges 0.65 - 0.65 1.21 - 1.21 Subtotal (D) 7.96 - 7.96 3.40 - 3.40 158.09 96.87 254.96 102.47 145.35 247.81 Total Project Cost (A+B+C+D) a Original project costs in 2015 prices, revised project costs at actual cost or 2020 prices. b Physical contingencies on the new components computed at 10%. Price contingencies computed at 1.1% on foreign exchange costs and 10.0% on local currency; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. c Includes interest and commitment charges. Interest during construction has been calculated using the existing interest rate for ADB's ordinary capital resources (OCR) loan. Commitment charges for ADB's OCR loan are 0.15% per year to be charged on the undisbursed loan amount. Source: Asian Development Bank estimates.
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B. Allocation and Withdrawal of Loan Proceeds
Total Amount Allocated Percentage of ADB Financing from Item for ADB Financing ($) the Loan Account 1. Goods 51,300,000 100% of total expenditures claimeda 2. Consulting Services 5,100,000 100% of total expenditures claimeda a 3. Works 89,800,000 100% of total expenditures claimed 4. Unallocated 3,800,000 Total 150,000,000 a Exclusive of taxes and duties imposed within the territory of the borrower. Source: Asian Development Bank estimates.
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C. Detailed Cost Estimates by Financier ($ million)
a Original project costs in 2015 prices, revised project costs at actual cost or 2020 prices. b Physical contingencies on the new components computed at 10%. Price contingencies computed at 1.1% on foreign exchange costs and 10.0% on local currency; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. c Includes interest and commitment charges. Interest during construction has been calculated using the existing interest rate for ADB's ordinary capital resources (OCR) loan. Commitment charges for ADB's OCR loan are 0.15% per year to be charged on the undisbursed loan amount. Source: Asian Development Bank estimates.
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D. Detailed Cost Estimates by Outputs/Components ($ million)
ORIGINAL PROJECT REVISED PROJECT
Takhiatash-Khorezm-Ell Substations and Institutional Developmen220kV Transmission Lines Substations and Syrdarya TPP – ZafarabGuzar-Regar Institutional Development Switching Stations Switching Stations % Cost % Cost % Cost % Cost % Cost % Cost Total Amount Category Amount % Cost Category Amount Category Amount Category Amount % Cost Category Amount Category Amount Category Amount Category Total A. Investment Costsa 211.18 147.79 70% 61.82 29% 1.57 1% 82.08 38% 36.77 17% 77.26 36% 17.60 8% 0.94 0% 214.66 1 Goods 123.75 84.02 68% 39.73 32% - 0% 27.80 59% 19.14 41% - 0% - 0% - 0% 46.95 a. Output 1 (Takhiatash-Khorezm) 84.02 84.02 100% 0% 0% 27.80 100% 0% 0% 0% 0% 27.80 b. Output 2 (Substations) 39.73 0% 39.73 100% 0% 0% 19.14 100% 0% 0% 0% 19.14 2 Civil Works 60.59 46.33 76% 14.26 24% - 0% 46.33 76% 14.26 24% - 0% - 0% - 0% 60.59 a. Output 1 (Takhiatash-Khorezm) 46.33 46.33 100% 0% 0% 46.33 100% 0% - 0% 0% 0% 46.33 b. Output 2 (Substations) 14.26 0% 14.26 0% 0% 0% 14.26 0% 0% 0% 0% 14.26 3 Works - - - - - 0% - 0% 66.63 82% 14.80 18% - 0% 81.42 c. Output 3 (Syrdarya-Zararobod) - 0% 0% 0% 66.63 100% 0% 0% 66.63 d. Output 4 (Guzar-Regar) - 0% 0% 0% 0% 14.80 100% 0% 14.80 4 Environmental impact mitigation 1.26 1.00 79% 0.26 21% 0% 1.00 49% 0.26 13% 0.40 19% 0.40 19% 0% 2.05 5 Land acquisition and resettlement 0.33 0.33 100% - 0% 0% 0.33 43% - 0% 0.29 38% 0.14 19% 0% 0.76 6 Taxation 25.25 16.11 64% 7.57 30% 1.57 6% 6.62 29% 3.11 14% 9.95 43% 2.27 10% 0.94 4% 22.89 B. Recurrent Costs 1.31 0.88 67% 0.37 28% 0.06 5% 0.88 67% 0.37 28% 0% 0% 0.06 5% 1.31 C. Institutional Development 8.33 - 0% - 0% 8.33 100% - 0% - 0% - 0% - 0% 9.31 100% 9.31 a. Project implementation consulting servic 2.50 0% 0% 2.50 100% 0% 0% 0% 0% 4.47 100% 4.47 b. Transmission system planning 0.53 0% 0% 0.53 100% 0% 0% 0% 0% - 0% - c. Asset Management system 4.80 0% 0% 4.80 100% 0% 0% 0% 0% - 0% - d. External audit 0.50 0% 0% 0.50 100% 0% 0% 0% 0% 0.50 100% 0.50 e. Asset maintenance and management - 0% 0% 0% 0% 4.35 100% 4.35 TOTAL BASE COST (A+B+C) 220.82 148.67 67% 62.19 28% 9.96 82.96 37% 37.14 16% 77.26 34% 17.60 8% 10.32 5% 225.28 D. Contingenciesb 26.18 17.63 7.37 1.18 5.48 2.29 8.75 46% 1.99 10% 0.63 19.14 1 Physical 20.42 13.75 67% 5.75 28% 0.92 5% 4.33 27% 1.81 11% 7.73 48% 1.76 11% 0.52 3% 16.15 2 Price 5.76 3.88 67% 1.62 28% 0.26 5% 1.15 38% 0.48 16% 1.02 34% 0.23 8% 0.11 4% 2.99 E. Financing Charges During Implementationc 7.96 5.36 2.24 0.36 1.31 0.54 1.15 34% 0.26 8% 0.12 3.40 1 Interest during implementation 7.31 4.92 67% 2.06 28% 0.33 5% 0.66 30% 0.28 13% 0.95 44% 0.22 10% 0.07 3% 2.19 2 Commitment charges 0.65 0.44 68% 0.18 28% 0.03 5% 0.65 54% 0.27 22% 0.20 17% 0.05 4% 0.05 4% 1.21 Total Project Cost (A+B+C+D+E) 254.96 171.66 67% 71.80 28% 11.50 5% 89.76 36% 39.98 16% 87.17 35% 19.86 8% 11.07 4% 247.82 a Original project costs in 2015 prices, revised project costs at actual cost or 2020 prices. b Physical contingencies on the new components computed at 10%. Price contingencies computed at 1.1% on foreign exchange costs and 10.0% on local currency; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. c Includes interest and commitment charges. Interest during construction has been calculated using the existing interest rate for ADB's ordinary capital resources (OCR) loan. Commitment charges for ADB's OCR loan are 0.15% per year to be charged on the undisbursed loan amount. Source: Asian Development Bank estimates.
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E. Detailed Cost Estimates by Year ($ million)
Total Cost 2016 2017 2018 2019 2020 2021 2022 2023 A. Investment Costsa 1 Takhiatash-Khorezm-Ellikkala 220kV Line 75.46 0.34 0.19 1.89 50.86 18.19 3.99 0.00 0.00 a. Physical investment 74.13 0.00 0.00 1.49 50.56 18.09 3.99 0.00 0.00 b. Environmental impact mitigation 1.00 0.01 0.19 0.40 0.30 0.10 0.00 0.00 0.00 c. Land acquisition and resettlement 0.33 0.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2 Substations and switching stations 33.65 0.00 0.09 2.16 20.63 7.08 3.69 0.00 0.00 a. Physical investment 33.40 0.00 0.00 2.11 20.53 7.07 3.69 0.00 0.00 b. Environmental impact mitigation 0.25 0.00 0.09 0.05 0.10 0.01 0.00 0.00 0.00 c. Land acquisition and resettlement 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3 Syrdarya TPP – Zafarabad Substation 220kV line 67.31 0.00 0.00 0.00 0.00 0.00 12.54 35.45 19.32 a. Physical investment 66.63 0.00 0.00 0.00 0.00 0.00 12.39 35.13 19.11 b. Environmental impact mitigation 0.40 0.00 0.00 0.00 0.00 0.00 0.01 0.18 0.21 c. Land acquisition and resettlement 0.29 0.00 0.00 0.00 0.00 0.00 0.14 0.14 0.00 4 Guzar-Regar 500kV transmission line 15.33 0.00 0.00 0.00 0.00 1.11 13.76 0.26 0.21 a. Physical investment 14.80 0.00 0.00 0.00 0.00 1.11 13.60 0.09 0.00 b. Environmental impact mitigation 0.40 0.00 0.00 0.00 0.00 0.00 0.01 0.18 0.21 c. Land acquisition and resettlement 0.14 0.00 0.00 0.00 0.00 0.00 0.14 0.00 0.00 5 Institutional development 9.31 0.22 0.00 0.00 0.76 2.47 4.20 0.84 0.83 a. Project implementation consulting services 4.47 0.22 0.00 0.00 0.11 0.73 2.07 0.67 0.67 b. Transmission system planning 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 c. Asset Management system 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 d. External audit 0.50 0.00 0.00 0.00 0.00 0.00 0.17 0.17 0.17 e. Asset maintenance and management 4.35 0.00 0.00 0.00 0.65 1.74 1.96 0.00 0.00 6 Taxes and Duties 22.89 0.00 0.00 0.33 6.65 2.49 6.52 6.88 0.00 Subtotal (A) 223.96 0.56 0.28 4.38 78.91 31.34 44.69 43.43 20.36 B. Recurrent Costs 1.30 0.30 0.30 0.30 0.20 0.20 0.00 0.00 0.00 Total Base Cost 225.26 0.86 0.58 4.68 79.11 31.54 44.69 43.43 20.36 C. Contingenciesb 1 Physical 16.15 0.00 0.00 0.00 2.02 4.41 3.21 4.67 1.85 2 Price 2.99 0.00 0.00 0.00 0.51 1.20 0.18 0.63 0.47 Subtotal (C) 19.14 0.00 0.00 0.00 2.53 5.61 3.39 5.30 2.32 D. Financing Charges During Implementationc 1 Interest during implementation 2.19 0.00 0.00 0.01 0.16 0.37 0.55 0.40 0.70 2 Commitment charges 1.21 0.00 0.22 0.22 0.20 0.23 0.26 0.06 0.02 Subtotal (D) 3.39 0.00 0.23 0.23 0.36 0.59 0.81 0.46 0.72 Total Project Cost (A+B+C+D) 247.80 0.86 0.81 4.92 82.00 37.74 48.89 49.19 23.39
a Original project costs in 2015 prices, revised project costs at actual cost or 2020 prices b Physical contingencies on the new components computed at 10%. Price contingencies computed at 1.1% on foreign exchange costs and 10.0% on local currency; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. c Includes interest and commitment charges. Interest during construction has been calculated using the existing interest rate for ADB's ordinary capital resources (OCR) loan. Commitment charges for ADB's OCR loan are 0.15% per year to be charged on the undisbursed loan amount. Source: Asian Development Bank estimates.
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F. Contract and Disbursement S-Curve
Contract Awards (in USD million) Disbursements (in USD million) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total 2016 0.00 0.00 2.48 0.00 2.48 0.00 0.00 0.00 0.22 0.22 2017 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2018 0.00 0.00 11.23 27.80 39.04 0.00 0.00 0.00 1.65 1.65 2019 6.16 1.37 0.00 0.38 7.91 2.65 3.35 16.38 10.62 33.00 2020 0.00 0.00 4.05 0.00 4.05 4.10 1.80 2.72 4.45 13.06 2021 0.00 16.80 40.00 0.00 56.80 2.08 0.00 1.68 4.50 6.18 2022 35.50 4.23 0.00 0.00 39.73 3.50 11.84 0.20 32.00 47.54 2023 0.00 0.00 0.00 0.00 0.00 28.00 0.60 0.74 2.00 31.34 2024 0.00 0.00 0.00 0.00 0.00 2.25 4.49 10.26 0.00 17.00 Total Contract Awards 150.00 150.00
Contract Awards and Disbursements Projections
150.00 $ million $
1.00 2016 2017 2018 2019 2020 2021 2022 2023 2024 Year
Contract Awards (in USD million) Total Disbursements (in USD million) Total
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G. Fund Flow Diagram
Loan Agreement Republic of Uzbekistan (Ministry of Finance)
Subsidiary Loan Agreement
Withdrawal Application and
Asian Invoice/Receipt Joint-Stock Company Development National Electric Grid of Bank Uzbekistan
Invoice/Receipt
Contractors Direct Payment and Commitment Procedure
Invoice/Receipt
Project Supervision
and Management Consultants
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V. FINANCIAL MANAGEMENT
A. Financial Management Assessment (Historical)
11. A financial management assessment (FMA), including assessed risks and mitigation measures, analysis on historical financial performance, and projections of financial statements, was conducted during preparation of the originally-approved project. Uzbekenergo, the executing agency (EA) of the project at the time of its preparation and commencement, was a 100% state- owned holding company responsible for operation of Uzbekistan’s power generation, transmission system, and distribution in Uzbekistan. It was established in August 2001 after the public sector reorganization and is the legal successor of the former Ministry of Energy and Electrification. Incorporated as an open joint-stock company (JSC), Uzbekenergo had 54 subsidiaries with its shares ranging from 51% to 100% in each subsidiary. These subsidiaries included power generation, transmission, and distribution and supply companies. Most of those subsidiaries were incorporated as separate JSCs.
12. At the time of the original FMA’s preparation, Uzbekenergo’s financial management risk was considered high. The need was identified for Uzbekenergo to strengthen its financial management capacity. Uzbekenergo’s accounting policies, procedures, and financial reporting followed the National Accounting Standards of Uzbekistan and National Standards on Auditing. Under Presidential Resolution No. 48 Article 442 of 2010, Uzbekenergo was also required to adopt international auditing standards for external auditing of its financial statements during the period 2011–2015. In order to comply with this resolution and to enhance its financial management, Uzbekenergo undertook an external audit based on International Standards on Auditing issued by the International Assurance Auditing Standards Board of its financial statements from the fiscal year (FY) ending on 31 December 2011. The results of the audit indicated the need for further improvements in areas such as the classification methods and impairment provisions on account receivables, the scope of account consolidation, and the accounting system.
13. Uzbekenergo started adopting the International Financial Reporting Standards (IFRS) conversion since the FY ending on 31 December 2012 and planned to complete full conversion to cover all subsidiaries for the FY ending 31 December 2015. Uzbekenergo produced audited entity financial statement (AFS) for FY2015, which were prepared based on the IFRS. FY2016 and FY2017 were to follow. The capacity development plan under other ADB loan projects5 and World Bank projects were expected to address the training of the IFRS specialists as well as the strengthening of Uzbekenergo’s information systems, with the objective of improving its financial management capability.
14. While Uzbekenergo’s financial management capacity required improvement, it was expected to operate profitably as a vertically-integrated power utility throughout the period of the loan. With improving collection rate and commissioning of new generation facilities as well as other rehabilitated infrastructure, Uzbekenergo’s financial situation was expected to continue to improve. The financial performance of Uzbekenergo, however, remained sensitive to gas price changes. Such changes needed to be factored into electricity tariff adjustments in order to ensure adequate cashflow for operation and financing of investments.
5 ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Loans and Administration of Loan to the Republic of Uzbekistan for the Talimarjan Power Project. Manila (Loans 2629-UZB, 2630-UZB, and 8944-UZB).
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15. Table 1 summarizes the financial management risks of Uzbekenergo and mitigation measures prescribed at the time of the original loan preparation.
Table 1: Financial Management Risks and Mitigation Measures Risk Management Plan and/or Risk Assessment Mitigation Measures 1. Inherent risks High . The project management unit (PMU) to be supported by international consultants. Training on Asian Development Bank (ADB) procedures to be provided. 2. Funds flow Substantial . ADB direct payment, commitment letters, and reimbursement arrangements procedures are to be used for the project. No imprest account will be established. . Relending agreement between the Ministry of Finance and Uzbekenergo to be submitted to ADB. 3. Staffing High . Uzbekenergo to be responsible for retaining adequate staffing and timely payment of salaries to staff. . Recruitment and training of staff for international financing reporting standards (IFRS) to be implemented by Uzbekenergo with the help of international consultant. 4. Accounting Substantial . An accounting system to be established and maintained for policies, the project in order to minimize risk. procedures, and . Information technology systems diagnosis and strategy systems development to be carried out by international consultant to identify the weaknesses and to design mitigation plan including upgrading accounting system and the introduction of an integrated management information system. . Recruitment of or internally trained IFRS accountants to introduce the adoption of IFRS. . Documented procedures and staff training to be provided to retain institutional knowledge. 5. Internal audit Substantial . Adequate staffing in the newly established internal audit unit and sufficient training to be provided by Uzbekenergo through the help of international consultant. 6. External audit Substantial . Loan and project agreements require Uzbekenergo’s financial statements and project financial statements be audited in accordance with International Standards on Auditing (ISA) by auditor acceptable to ADB. . Uzbekenergo will submit to ADB the audited project financial statements within 6 months of the end of the fiscal year. 7. Reporting and High . A reporting system, which will have functionality for automatic monitoring generation of financial reports to be established and maintained for the project. . Implementation consultants will be recruited to assist PMU in supervising the project implementation, recording project costs, preparing withdrawal applications, and progress reports. 8. Information High . Information systems and processes to be enhanced to meet systems the demands of organization, ensure operational stability, and allow for full consolidation of management information as well as financial data. Overall High
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16. Based on this assessment, action plans to improve financial management capacity of Uzbekenergo are the following:
Action Responsibility Resources Timing Development of management information Uzbekenergo’ s ADB Loan 2015–2018 system to improve accounting PMU, IT (Talimarjan Power infrastructure of the company Department Project) Regular training of accounting staff to Uzbekenergo’s Uzbekenergo’s From the improve their financial management Accounting internal resources beginning of the capacity Department project on a regular basis Engagement of reputable external auditors Uzbekenergo’s ADB loans (2010– Annually to conduct entity and project account Accounting 2011, 2017–2021) audits Department and World Bank loan (2012–2016) Engagement of consultants to provide Uzbekenergo’s ADB loan From the project supervision and monitoring and PMU beginning of the financial management training to clarify project on a ADB requirements including disbursement regular basis requirements and financial covenants calculation Engagement of training contractors for Uzbekenergo’s World Bank loan Within 6 months enhancement of IFRS-based accounting Accounting capacity, including asset valuation and Department consolidation of subsidiary accounts
B. Financial Management Assessment (for Major Change and Loan Amendment)
17. In 2019, Uzbekenergo was legally unbundled along functional lines. JSC National Electric Grid of Uzbekistan (NEGU) was established as a 100% state-owned company responsible for operation of Uzbekistan’s transmission system, and for coordinating power generation dispatch. (Generation and distribution assets of Uzbekenergo were assigned to other new state-owned enterprises.)
18. In preparation for the major change of the project’s scope to include Output 4 and Output 5, a supplemental FMA was prepared specifically for NEGU.
19. Financial management risks are evident in NEGU, where specific intervention is warranted.
20. Existing PMU staff for the Northwest transmission project are largely to be transferred to the PMU for this project. While the PMU staff have experience in managing ADB procedures, further improvements in the quality of reporting is required. ADB training to the PMU should continue to enhance capacity in procurement, finance, and contract management issues associated with internationally financed projects, and in ADB procedures, especially in the move to using the ADB’s Client Portal for Disbursement.
21. NEGU has existing plans to facilitate the introduction of IFRS accounting and spread of International Standards on Auditing. Significant hands-on training and support is still needed, both for staff in the IFRS Unit and to enable accountants that are currently focusing on statement
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prepared under the National Accounting Standards to gain necessary exposure in the IFRS. It is also critical that NEGU develops its IFRS accounting policies and procedures as proposed.
22. There is an urgent need to populate the internal audit unit and strengthen its role to support business modernization. Terms and conditions of employment should be reviewed to promote the use of full-time staff paid at market-based rates. Training on internal auditing and risk management is also important for recruited staff to ensuring the internal audit role is highly proactive, understood by management, and reflects accounting trends towards the IFRS.
23. Budget monitoring is focused on the annual shareholder meeting, with an urgent need for enhanced in-year monitoring and regular management reporting, together with control procedures for spending above business plan allocations. NEGU needs to develop medium-term forecasting capability, which is especially critical given uncertainty over its regulatory model, the requirements of the Corporate Code, and the expectations that a multiyear tariff methodology may be introduced from 2023. At the same time, supportive risk management procedures and processes should be implemented.
24. The FMA has considered two types of risks: (i) inherent risks, i.e., risks outside the direct control of the entity financial management; and (ii) control risks, i.e., risks concerning the internal functioning and control of the entity’s accounts division and related financial divisions. Table 2 identifies the following key risks:
Table 2: Financial Management Internal Control and Risk Assessment of Joint-Stock Company National Electric Grid of Uzbekistan Risk Mitigation Measure or Risk Description Assessment Risk Management Plan Inherent Risk I. Country Specific Public sector audit function is not Substantial The new PFM reforms package aims to fully independent and is still not improve the tax administration, introduce performed in compliance with a medium-term budget framework, international standards of audit for establish international public sector supreme audit institutions. accounting and audit standards, and strengthen external audit. ADB will assist in this transition by providing policy advice, investments, and capacity development in three strategic areas: (i) supporting private sector development, (ii) reducing economic and social disparities, and (iii) promoting regional cooperation and integration. II. Entity Specific 1. NEGU is still in the process of Substantial NEGU is receiving support from the World becoming functional as an Bank. independent entity following the Further support is required to address unbundling of JSC Uzbekenergo. gaps in corporate governance, including It inherits from JSC Uzbekenergo the creation of an Audit Committee and an several significant corporate Action Plan to improve executive governance weaknesses. management. Overall Inherent Risk Substantial
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Control Risk – NEGU I. Funds Flow 2. Funds flow will essentially remain the Moderate Capacity of the PMU needs to be same to the existing Northwest strengthened further, including through transmission project. continued training and recruitment of an accountant for the project. II. Staffing 3. Limited knowledge in the IFRS is Substantial NEGU is receiving support from the World impeding the required Bank to enhance skills of the dedicated implementation of credible accounts IFRS unit, and accounting and finance under the IFRS. staff in the IFRS. III. Accounting Policy and Procedures 4. Accounting policies, procedures, and Substantial NEGU is developing an IFRS policy and systems are taken from those of JSC procedures with World Bank support. Uzbekenergo. The NAS policy should be adopted to There is lack of segment reporting, reflect the new organization and the management accounting, and asset needs of the regulatory environment. insurance. Segment reporting should be introduced and Management Accounts developed. NEGU should insure its assets. IV. Internal Audit 5. In-operating internal audit function is Substantial NEGU should recruit new internal audit insufficient. staff as a matter of urgency. There is need to ensure appropriate staff remuneration and training, with focus on the IFRS and ADB procedures. The Audit Committee within NEGU’s Supervisory Board should be created. V. External Audit 6. External audit not yet performed Low Presidential Resolution No. PP-3946 of 19 under the ISA. September 2018 stipulated that from 1 January 2020 all financial audits will be conducted based on the ISA. A new updated Law approved by the Senate in February 2021 (ZRU-677), and which comes into force in May 2021, extends this date to June 2021. VI. Reporting and Monitoring 7. Issues include absence of regular Substantial Detailed budget monitoring and control monitoring of its business plan, lack procedures should be developed, of controls over exceeding plan including for capital projects. allocations, and absence of medium- Capacities for medium-term forecasting of term forecasting and risk capital and operating expenditures and management capacity. financial planning should be developed. VII. Information Systems 8. Absence of automated and regularly Medium The roll out of an integrated financial updated performance data is management information system will restricting the quality of information address this issue, but only in the provided to management. medium-term. There is need to ensure that the ERP system to be implemented with World Bank support facilitates improved financial reporting.
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Overall Control Risk Substantial Overall Pre-Mitigated Financial Substantial The implementation of mitigation actions Management Risk Assessment as proposed may reduce the risk to Moderate.
ADB = Asian Development Bank, ERP = enterprise resources planning, IFRS = International Financial Reporting Standards, ISA = International Standards on Auditing, JSC = Joint-Stock Company, NAS = National Accounting Standards, NEGU = JSC National Electric Grid of Uzbekistan, PFM = public financial management, PMU = project management unit. Source: ADB.
B. Action Plan
25. The development of an Action Plan reflecting the above considerations needs to take into account broader reforms required of NEGU, including the need for regulatory reform to support its independence and sustainability of its transmission business. Based on this assessment, the following Action Plans are presented to improve financial management capacity in NEGU.
Table 3: Financial Management Action Plan No. Weakness Mitigating Action Responsibility Target Date 1 Gaps in corporate Preparation of the scope, NEGU Transitional committee governance and subsequent formation to be set up within 3 of the Audit Committee to months of report to the Supervisory effectiveness of Major Board (as required under Change the Corporate Governance Code), and a risk Full Audit management working Commission, group incorporating independent Initially one committee can Members, to be set up perform the key assigned within 1 year of functions, namely effectiveness of Major monitoring governance and Change managing risk and the control environment in the company. 2 Limited forecasting Development of annual NEGU To be operational for and planning medium-term business plan the FY2022 procedures with forecast period of at least the upcoming 3 years (consistent with the Corporate Governance Code) 3 General weakness in World Bank is extensively NEGU/PMU Training to be PMU on loan working with NEGU on provided upon disbursement and IFRS capacity buildinga effectiveness of the reporting Major Change by ADB/URM to organize ADB/URM ADB/URM and/or refer disbursements, and NEGU/PMU staff to (IPSAS-based) financial PwC Academy reporting webinar for NEGU webinars on the IFRS and PMU staff and/or refer and IPSAS
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NEGU/PMU to PwC Academy, Uzbekistan webinars on IPSAS, IFRS NEGU financial and ACCA’s financial management and reporting webinarsb disbursement staff are required to complete NEGU financial NEGU/PMU the self-study within 2 management staff to self- months upon study Loan Disbursement recruitment. Handbook 2017,c which is also available in Russian language, and avail of e- Learning/self-study modules of the ADB Client Portal for Disbursements systemd 4 Difficulties with staff PMU to ensure continuity PMU/NEGU Continuous retention in financial and propose actions to management positions improve staff retention in financial management functions 5 Limited knowledge in Further training to NEGU NEGU Training ongoing the IFRS, impeding on IFRS is being provided during duration of the required by the World Bank. World Bank support implementation of (footnote 8) accounts under the IFRS 6 Limited knowledge in NEGU to prepare Annual NEGU Annual IFRS reports preparing accounts IFRS report starting from to be issued under the IFRS FY2019 and unaudited consistent with quarterly IFRS reports statutory timeframes, starting from FY2021 unaudited quarterly financial statements and reports within 2 months of the end of the quarter 7 Outdated accounting Update internal accounting NEGU Within 6 months of policies and policies and manuals to effectiveness of Major procedures designed reflect the revised Change loan for JSC Uzbekenergo organizational amendment arrangements, including transition to the IFRS
Develop internal IFRS policies and procedures, with support of existing TA from the World Bank 8 Lack of segment Development of financial NEGU Reporting to be reporting reporting by key business implemented in full for segments, and its FY2022 incorporation in business planning 9 Insufficient staffing of Recruitment of all vacant NEGU Within 3 months of Internal Audit function internal audit staff and effectiveness of Major
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ensuring that ADB-funded Change loan project is included in the amendment internal audit workplan 10 Insufficient knowledge ADB to provide training on ADB/NEGU Upon recruitment of all of internal auditors on international best practices Internal Audit unit staff international practices in internal audit, including in internal auditing governance, risk, and control environment within the organization 11 Weak budgetary NEGU to review NEGU Upon effectiveness of controls and management monitoring Major Change loan monitoring system and standard amendment operating procedures to enhance budgetary reporting to the Supervisory Board incorporating quarterly monitoring and pre-approval mechanisms where expenditure is above budget limits 12 Weak budgetary ADB to provide training on ADB Upon effectiveness of controls and budgetary reporting and Major Change loan monitoring monitoring and the amendment development of expenditure controls 13 Absence of automated ADB to support the ADB/NEGU Upgrades to 1C to be and regularly updated engagement of consultants identified within 3 performance data to map out necessary months restricting the quality accounting software of information upgrades to provide near- Major upgrades to provided to real-time accounting data software to be management and move toward a more identified within 1 year comprehensive financial of effectiveness of management information Major Change loan system. amendment
As an interim step, NEGU to identify upgrades required to 1C system to best support the IFRS reporting ADB = Asian Development Bank, ACCA = Association of Chartered Certified Accountants, FY = fiscal year, IFRS = International Financial Reporting Standards, IPSAS = International Public Sector Accounting Standards, JSC = Joint- Stock Company, NEGU = JSC National Electric Grid of Uzbekistan, PMU = project management unit, TA = technical assistance, URM = Uzbekistan Resident Mission. a World Bank. Modernization and Upgrade of Transmission Substations (Project ID P156584). b PwC Academy Uzbekistan. For newsletters on new trainings, mail to [email protected]. c ADB. 2017. Loan Disbursement Handbook 2017. Manila. d Disbursement eLearning. Source: ADB.
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C. Disbursement
26. The Loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time), 6 and detailed arrangements agreed upon between the government and ADB.
27. A project management and supervision consultant (project implementation consultant) will be recruited to assist NEGU in project management, including preparing disbursement projections, collecting supporting documents, and preparing and sending withdrawal applications to ADB.
28. Direct payment and commitment procedure will be adopted for the procurement of goods and consulting services contracts.
29. Before the submission of the first withdrawal application, the Ministry of Finance (MOF) should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is US$100,000 equivalent. Individual payments below this amount should be paid by the government or NEGU and subsequently claimed to ADB through reimbursement, unless otherwise accepted by ADB. National companies are paid into national bank accounts for nationally based work. Payments will be made only into countries in which the contractor, subcontractor, or supplier is incorporated. It will not be allowed to pay into third country bank accounts or pay into bank account of non-ADB member country.
D. Accounting
30. NEGU will cause the PMU to maintain separate project account and records by funding source for all expenditures incurred on the project. The PMU will prepare consolidated project financial statements in accordance with the government’s accounting laws and regulations, which are consistent with international accounting principles and practices, in accordance with the International Public Sector Accounting Standards, “Financial Reporting under the Cash Basis of Accounting.” The annual entity’s financial statements will follow international accounting principles and practices in accordance with the IFRS.
E. Auditing
31. NEGU will cause the detailed consolidated project financial statements to be audited, in accordance with the International Standards on Auditing and with the government's audit regulations, by an independent auditor acceptable to ADB. The audited project financial statements will be submitted in the English language to ADB within 6 months of the end of the fiscal year by the executing agency.
32. NEGU will also cause the entity-level financial statements to be audited, in accordance with the International Standards on Auditing and with the government's audit regulations, by an independent auditor acceptable to ADB. The audited entity-level financial statements, together with the auditors’ report and management letter, will be submitted in the English language to ADB within 1 month after their approval by the competent authority.
6 ADB. 2017. Loan Disbursement Handbook 2017. Manila.
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33. The annual audit report will include an audit management letter and audit opinions, which cover (i) whether the project financial statements present a true and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting framework; (ii) whether loan proceeds were used only for the purposes of the project or not; and (iii) the level of compliance for each financial covenant contained in the legal agreements for the project.
34. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal project supervision, and followed up regularly with all concerned, including the external auditor.
35. The government, NEGU, and the PMU have been made aware of ADB’s policy on 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.
36. Public disclosure of the project financial statements, including the audit report on the project financial statements, will be guided by ADB’s Public Communications Policy (2011).8 After review, ADB will disclose the project financial statements for the project and the opinion of the auditors on the financial statements within 30 days of the date of their receipt by posting them on the ADB’s website. The Audit Management Letter will not be disclosed.
VI. PROCUREMENT AND CONSULTING SERVICES
A. Advance Contracting and Retroactive Financing
37. All advance contracting will be undertaken in conformity with ADB’s Procurement Guidelines (2015, as amended from time to time) 9 and ADB’s Guidelines on the Use of Consultants and Its Borrowers (2013, as amended from time to time).10 The issuance of invitations to bid under advance contracting will be subject to ADB’s approval. The borrower and NEGU have been advised that approval of advance contracting does not commit ADB to finance the project.
7 ADB’s policy on delayed submission of audited project financial statements include the following: • When audited project financial statements are not received by the due date, ADB will write to the executing agency advising that (i) the audit documents are overdue; and (ii) 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. • When audited project financial statements have not been 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 (i) inform the executing agency of ADB’s actions; and (ii) advise that the loan may be suspended, if the audit documents are not received within the next 6 months. • When audited project financial statements have not been received within 12 months after the due date, ADB may suspend the loan. 8 ADB. 2011. Public Communications Policy 2011: Disclosure and Exchange Information. Manila. 9 ADB. 2015. Procurement Guidelines. Manila. 10 ADB. 2013. Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers. Manila.
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38. Advance contracting will be undertaken by PMU for the recruitment of supervision and project management consultants.
39. Retroactive financing is the financing of project expenditures incurred by the borrower prior to the effective date of the related loan agreement (or amendment). Retroactive financing will be employed to allow NEGU to recover eligible costs incurred in the 12 months preceding the amendment to the loan agreement, up to a cumulative value not to exceed 20% of the total ADB loan amount, in accordance with the ADB Loan Disbursement Handbook 2017 (footnote 6).
B. Procurement of Goods, Works, and Consulting Services
40. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines (2015, as amended from time to time). Procurement of civil works, which will be financed entirely by NEGU, will be subject to, and will be governed by, all applicable laws and regulations of the Borrower relating to procurement and contract management.
41. Works contracts to be financed by ADB will be governed by ADB’s Procurement Guidelines (2015, as amended from time to time).
42. International competitive bidding procedure will be used for goods contract estimated to cost $2,000,000 or more. ADB's standard bidding documents for goods contract will be used.
43. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section C.
44. All consultants will be recruited according to ADB’s Guidelines on the Use of Consultants.11
45. Supervision and project management consultant: Original project. An estimated 92 person-months (60 international, 32 national) of consulting services are required to provide technical, financial, and administrative support to the PMU during the entire project implementation period. Estimated contract duration is 36 months. Consulting firms will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality–cost ratio of 90:10, considering a high level of technical expertise and experience required for the supervision consultancy. The supervision and project management consultant contract shall be awarded, approved by the Ministry of Foreign Economic Relations, Investment and Trade (MFERIT), and that key personnel shall be deployed prior to procurement of goods contracts.
46. Supervision and project management consultant: Major change in scope of the project. An estimated 150 person-months (66 international, 84 national) of consulting services are required to provide technical, financial, and administrative support to the PMU during (i) the rehabilitation of the high-voltage line L507 (500 kV) Guzar (Republic of Uzbekistan)–Regar (Republic of Tajikistan) Regional Power Transmission Line Project on the territory of the Republic of Uzbekistan in Surkhandarya Region (Component 1), and (ii) the construction of the 220 kV
11 Checklists for actions required to contract consultants by method available in the e-Handbook on Project Implementation. ADB. 2012. Handbook on Project Implementation. Manila.
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Substation in Zafarobod, and two high-voltage Power Transmission Line Project (220 kV) Sirdarya TPP–Substation Zafarobod in Jizzakh Region (the Component 2). Estimated contract duration is 24 months. Consulting firms will be engaged using the QCBS method with a standard quality– cost ratio of 90:10, considering a high level of technical expertise and experience required for the supervision consultancy. The supervision and project management consultant contract has been awarded as advance action in March 2021 and will be financed through retroactive financing, with endorsement from the State Committee of Investment.
C. Procurement Plan
Basic Data Project Name: Northwest Region Power Transmission Line Project Project Number: 47296-001 Approval Number: 3285 Country: Executing Agency: Uzbekistan Joint Stock Company National Electric Grid of Uzbekistan Project Procurement Risk: Implementing Agency: N/A High Project Closing Date: Project Financing Amount: $255,500,000 30 June 2021 ADB Financing: $150,000,000 Cofinancing (ADB Administered): Non-ADB Financing: $105,500,000
Date of First Procurement Plan: Date of this Procurement Plan 22 September 2015 13 May 2021 Version 7 Advance Contracting: e-GP: No No
D. Methods, Thresholds, Review and 18-Month Procurement Plan
1. Procurement and Consulting Methods and Thresholds
47. 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 $2,000,000 and above Goods Shopping for Goods Up to $900,000 Prior review required International Competitive Bidding for $5,000,000 and above Prior review required Works Government Procedure for Works No threshold (allowed for any amount) To be entirely financed by JSC National Electric Grid of Uzbekistan
Consulting Services Method Comments Consultant's Qualification Selection for Consulting Firm Prior review required Quality- and Cost-Based Selection for Consulting Firm Prior review required
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2. Goods and Works Contracts Estimated to Cost $1 Million or More
48. 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.
Advertisement Package General Estimated Procurement Review Bidding Date No. Description Value Method (Prior/ Post) Procedure (quarter/year) Comments Package Construction of 40,000,000.00 ICB Prior 1S1E Q2 2021 Prequalification 5 220 kV of Bidders: N Zafarabad Substation and Domestic two line-bay in Preference the Sirdarya Applicable: N TPP Bidding Document: Plant
Package Construction of 35,000,000 ICB Prior 1S1E Q3 2021 Prequalification 6 220 kV HVL of Bidders: N Sirdarya TPP- Substation Domestic Zafarabad Preference Applicable: N
Bidding Document: Plant HVL = high-voltage line, ICB = international competitive bidding, kV = kilovolt, Q = quarter, TPP = thermal power plant.
3. Consulting Services Contracts Estimated to Cost $100,000 or More
49. The following table lists consulting services contracts for which the recruitment activity is either ongoing or expected to commence within the next 18 months.
Review Advertisement Package Estimated Recruitment (Prior/ Date Type of Number General Description Value Method Post) (quarter/year) Proposal Comments CS-2 External audit (three 500,000.00 CQS Prior Q3 2021 BTP Assignment: multiyear contracts) International
4. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000 (Smaller Value Contracts)
50. The following table lists smaller-value goods, works, and consulting services contracts for which the activity is either ongoing or expected to commence within the next 18 months.
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Goods and Works
Review Advertisement Package General Estimated No. of Procurement (Prior/ Bidding Date Number Description Value Contracts Method Post) Procedure (quarter/year) Comments None
Consulting Services Review Advertisement Package General Estimated No. of Recruitment (Prior/ Date Type of Number Description Value Contracts Method Post) (quarter/year) Proposal Comments None
E. Indicative List of Packages Required Under the Project
51. The following table provides an indicative list of goods, works, and consulting services contracts over the life of the project, other than those mentioned in the previous sections (i.e., those expected beyond the current period).
Goods and Works Estimated Estimated Package General Value Number of Procurement Review Bidding Number Description (cumulative Contracts Method (Prior/Post) Procedure Comments None
Consulting Services Package General Estimated Number of Recruitment Review Type of Number Description Value Contracts Method (Prior/ Post) Proposal Comments None
F. List of Awarded, Ongoing, and Completed Contracts
52. The following tables list the awarded, ongoing, and completed contracts.
1. Awarded and Ongoing Contracts
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Goods and Works Date of ADB Estimated Awarded Advertisement Approval of Package Value Contract Value Procurement Date Contract Number General Description ($) ($) Method (quarter/year) Award Comments Package 1 Substation equipment 38,900,000.00 18,757,666.49 ICB Q3 2018 1 Mar 2019 Lot 2-awarded to JSC O'zelektroapparat Lot 2: Supply of High Voltage Electroshield (UZB) Equipment and Protection Devices 13 Sep 2018 Lot 3 awarded to JSC Lot 3: Supply of Communications, 11,230,248.49 O'zelektroapparat
Control and Automation Electroshield (UZB)
Equipment
10 May 2019 Lot 5-awarded to Lot 5: Supply of Reactive Power Consortium Source of Statcom Type 1,365,418.00 between Sieyuan Electric Co. Ltd 5 Feb 2019 (PRC) and JSC Ozelektroapparat 4,000,000.00 Electroshield (UZB) 300,000.00 210,000.00 Shopping Q3 2019 4 Dec 2019 Awarded to Xian Lot S5: Brigade aerial platforms West Baishun with a crane for 4-6 people. Trading Co. Ltd
Package 3 Lot 1 - Truck crane with lifting 800,000.00 1,075,200.00 Shopping Q3 2019 15 Sep 2019 Awarded to capacity of 30 UzAutoTrailer, LLC ton (8 units) (Uzbekistan)
Lot 2- Supply of 360,000.00 2,006,000.00 Shopping Q3 2019 15 Sep 2019 Awarded to Asia equipment for Motors Co., Ltd construction and (the People’s operation of power Republic of China) transmission line 2.1 Tracked bulldozer (4 units) 2.2 Crawler excavator (2 units) 2.3 Wheeled excavator
(8 units) Lot 3- Tractors 2 units, trailers 810,000.00 304,000 Shopping Q3 2019 15 Jan 2021 Awarded to (supports) for UzAutoTrailer, transportation of reinforced LLC concrete for power lines 2 units, (Uzbekistan) Specialized trailers (sliding 13.6-26 m) 2 units
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Lot 8 300,000.00 412,850.00 Shopping Q3 2019 21 Sep 2020 Xinjiang Pkg 3 8.1. Leader nylon cable Qibao Trade for pulling overhead Co. Ltd cable lines and wires (PRC)
8.2. Roller blocks for rolling wires and cables to 500/220/110 kV
8.3. Rocker arms for pulling two or three split wires
8.4. Coupling connecting wires
8.5. Rollers for lightning protection cable
8.6. Mounting blocks for steel cable (1,3,5 and 10 tons)
8.7. Triple castors with rotating hook
8.8. Aluminum wire tensioner
8.9. Ratchet hoist with steel chain
8.10. Ratchet hoist for lifting and pulling during wire loading
8.11. Digital dynamometer with sensor
8.12. Binoculars for inspection of overhead lines 8.13. Polyester slings (4 types)
8.14. Trolley for moving along overhead lines
8.15. Aluminum ladder
8.16. Mounting wedge (MK-300/400/500)
8.17. Mounting wedge (frog) 95-185 mm2
8.18. Anemometer
8.19. Radio set
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Pkg Lot 10.1. - Hydraulic 289 000.00 551,090.00 Shopping Q3 2019 21 Sep 2020 Xinjiang 3-Lot presses with a set of Qibao Trade 10 dies – 9 Co. Ltd (PRC) Lot 10.2 - Mobile welding machines
Lot 10.3- Centrifuges, oil purification device - 9 pcs.
Lot 10.4- Set of hydraulic scissors with foot pump for cutting cables under voltage up to 500 kV - 30 pcs. Pkg 4 EPC contract for the 25,000,000.00 14,795,715.00 Plant Q1 2020 17 Dec 2020 Shanghai construction of 500 kV Electric Power single circuit Transmission transmission line from and Distribution 500 kV Guzar Engineering substation (Uzbekistan) Co. Ltd. (PRC) to existing 500 kV Regar substation (approx. 63.3 km)
Consulting Services Awarded Date of ADB Estimated Contract Advertisement Approval of Package Value Value Recruitment Date Contract Number General Description ($) ($) Method (quarter/year) Award Comments PIC-01 Project 3,000,000.00 2,460,778.47 QCBS Q1 2015 30 Sep 2016 Awarded to Implementation “Fichtner Consultant GmbH” (Germany) CS-PIC 03 Project 2.000,000.00 EUR1,084,648 QCBS Q2 2020 PIC signed co Implementation $730,360 ntract Consultant for the submitted to construction of ADB on 7 Guzar–Regar and April 2021 Zafarabad– Syrdarya transmission lines
2. Completed Contracts
Goods and Works Date of ADB Packag Awarded Advertisement Approval of
e Estimated Contract Procurement Date Contract Numb General Description Value ($) Value ($) Method (quarter/year) Award Comments Package 1 Lot 1- Transformers 5,800,000.00 ICB 25 Feb 2019 Lot 1- 2,162,000.00 and current limiting awarded reactors to Shandong Lot S4: Repair and 300,000.00 Shopping 14 Nov 2019 Lot 4- 174,000.00 maintenance vehicles awarded and mechanisms for to "Xian asset maintenance Rong Feng Automobil
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Package 2 Lot 1 - Supply of 42,700,000.00 ICB 27 Dec 2018 Lot 1- 8,009,272.22 Q2 2017 Galvanized Steel awarded to Tower Structures and Shandong Accessories Electrical Engineering and Equipment Lot 2: Insulators and 6,600,000.00 1,378,981.39 ICB 26 Dec 2018 O'zelektroG C Q2 2017 Hardware apparat
Electroshi eld (UZB)
Lot 3: Supply of 16,200,000.00 5,273,668.00 ICB 30 Oct 2018 Lot 3- Q2 2017 Conductors, Cables awarded to
and OPGW Xian Electric Engineering Lot 4 - Supply of 17,600,000.00 ICB 27 Dec 2018 Lot 4 - 13,142,849.74 Q2 2017 Concrete Foundations awarded to and Piles Shandong Electrical Engineering and Equipment Package 3 Lot 1: Truck crane not Shopping 21 Aug 2020 LotG 1: C 800,000.00 1,075,200.00 less than 25 tons -8 awarded to units "Uz Auto Trailer" Lot 2: "Caterpillar Shopping 21 Aug 2020 Lot 2: 360,000.00 2,006,000.00 bulldozer - 4 units, awarded to Caterpillar excavator - "Asia Motors 2 units, Co. Ltd" Wheel excavator - 8 (PRC) units"
Consulting Services
Date of ADB Packa Awarded Advertisement Approval of ge General Estimated Contract Procurement Date Contract Numb Description Value Value Method (quarter/year) Award Comments er
G. Non-ADB Financing
53. The following table lists goods, works and consulting services contracts over the life of the project, financed by Non-ADB sources.
Goods and Works Estimated Value Estimated Number Procurement General Description ($, cumulative) of Contracts Method Comments Civil works contract 62,000,000.00 1 GP To be entirely financed by JSC “National Electric Grid of Uzbekistan”
Review of Contract Modifications
54. ADB will review contract modifications in accordance with the procedures set forth in the loan agreement between the borrower and ADB.
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VII. SAFEGUARDS
55. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS), ADB funds should not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. The government, through the NEGU, will ensure that all safeguard requirements prescribed for the project that have been prepared will be implemented. The project, in accordance with ADB SPS (2009), was categorized as “B” for environment, as “B” for involuntary resettlement, and as “C” for indigenous peoples. Therefore, the following safeguard documents were prepared for the original scope during project preparation:
(i) The initial environmental examination (IEE) report, including its environmental management plan (EMP), was prepared. The IEE report identified potential impacts related with the project and proposed mitigation measures and monitoring plan that were presented in the EMP. The IEE report also includes the findings from the environmental compliance audit report and recommended corrective actions for the existing facilities. (ii) The land acquisition and resettlement plan (LARP).
56. The expansion of the scope of the project to include Output 4 (restoration of the 500 kV line from Guzar to Regar) and Output 5 (construction of a 220 kV line from Syrdarya to the Zafarabad substation in the Jizzakh region) does not change the environmental safeguard categorization (Category B) and required preparation of discrete IEEs for each of these subprojects, including critical habitats screening and preparation of framework biodiversity action plans (F-BAPs) that were incorporated into the respective EMPs for these subprojects.
57. These two additional subprojects will involve both permanent and temporary land acquisition. Approximately 8.06 ha will be permanently affected while 684.39 ha will be temporarily affected. Most of the affected land are agriculture lands. Most affected households are losing marginal portions of their agricultural land. However, eight households (with 48 members) located within the safety corridor will be physically displaced and are considered as experiencing major impacts. These incremental impacts do not change the involuntary resettlement category B of the Project. Separate draft LARPs were prepared for each subprojects. Updated section-wise LARPs and social due diligence report (SDDR) will be prepared following detailed design.
58. The government, through NEGU, is obliged to implement the recommendations from the aforementioned IEEs (and their EMPs) and LARPs that were prepared with adequate consultation with the people living in areas surrounding each subproject. The following paragraphs describe briefly the activities to be implemented during project implementation and operation.
(i) Environment
59. Potential environmental impacts from all project activities, area of impact influence, project alternatives, and their potential impacts were examined. Each discrete subproject’s EMP includes the proposed mitigation measures, environmental monitoring and reporting requirements, related institutional or organizational arrangements, capacity development and training measures, implementation schedule, cost estimates, and performance indicators at each stage of the project cycle. If any unanticipated environmental risks or impacts arise during construction, implementation, or operation of each subproject that were not considered in the IEE and the EMP, an update of the environmental assessment and EMP is required.
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60. Environmental impacts are not expected to be significant and can be managed at all stages: pre-construction, construction, operation and maintenance, and decommissioning.
61. Preconstruction activities have minor impact to soil, air quality, terrestrial vegetation, and land use. Also, some noise and vibration are caused in this phase of the project. All these adverse impacts can be minimized by mitigation measures proposed in the EMP, e.g., detailed planning of the overhead line (OHL) corridor location, careful planning and execution of works, and by selecting low-emission equipment. Permanent loss of agriculture land shall be minimized by detailed planning of the OHL corridor location and compensated to the affected households according to the LARP. The overall impact of the preconstruction phase is minor.
62. Most of the environmental impacts of the subprojects take place during the construction of the OHLs and the expansion and rehabilitation of related substations and switchyards. Major potential environmental impacts during the construction activities include limited impacts on land, hydrology, soil erosion, and water quality, terrestrial and aquatic ecology, air quality and noise, waste generation and disposal, oil management, historical and cultural resources, traffic disturbance, health, and safety issue to workers and to the local communities.
63. The EMPs define required mitigation measures for adverse impacts of the construction of the OHLs and related substations and switchyards. These measures include detailed planning of the structures and routes, timing of the construction works, careful planning and execution of works, selecting a low-emission equipment, health and safety training of the personnel and informing local residents, and application of waste management good practices.
64. During the operation and maintenance phase, main impacts are noise from transformers and wires, electromagnetic field, soil contamination due to spills, and occupational health and safety risk. All these impacts can be minimized by careful planning of the structures and by proper safety and accident prevention training of the personnel.
65. Environmental impacts caused by decommissioning activities are related to the waste disposal, possible spills, and occupational health and safety issues. Proper waste management practices, safety and accident prevention training of the personnel, and accurate planning and execution of demolition works will be used to mitigate these possible adverse impacts. The overall impact of the decommissioning phase is minor.
(ii) Involuntary Resettlement
66. To assess and mitigate physical and economic involuntary displacement impacts caused by the project and provide adequate displacement and rehabilitation assistance to the affected households, a Land Acquisition and Resettlement Plan (LARP) was prepared. The LARP includes the Entitlements Matrix summarizing all compensation and assistance provided in this project, resettlement budget and financing plan, as well as implementation schedule for the land acquisition and resettlement activities. The LARP is based on the pre-project design documents and needs to be updated after approval of the detailed design.
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67. The project will require:
(i) Permanent land acquisition for the construction of transmission line towers for the erection of OHL towers permanently: 13.32 hectares (ha) of land will be required, from which 4.35 ha are occupied by affected households (AHs); 118 AHs in Khorezm Province and 36 in Karakalpakstan will be the objects of the permanent impact; and 8.97 ha of the permanently affected land is state-owned, reserved, forest, and other land. (ii) Permanent land acquisition for a new switch substation at Sarimay: land for a new 220 kV switching station at Sarimay will be allocated from state reserve land. (iii) Temporary land acquisition for stringing the conductor cables of the transmission line: temporarily affected area will be 536.01 ha in total; the AH’s land is 158.73 ha; 133 AHs in Khorezm Province and 36 in Karakalpakstan will be the objects of the permanent impact; and 377.28 ha of the temporarily affected area is state-owned, reserved, forest, and other land.
68. AHs incurring impact on their cropping farmlands will not experience significant impact since the impact in terms of percentage consists of a maximum 8.4%. There are no significantly vulnerable AHs affected. Three disabled affected persons were identified in two AHs in Karakalpakstan and one female-headed household in Khorezm.
69. For this project, the compensation for agricultural land is based on monetary compensation only. The LARP sets eligibility and entitlement provisions establishing compensation rates in accordance with guidelines from the Government of Uzbekistan and ADB’s SPS 2009.
70. Under this project, AHs will not experience a significant loss of their productive assets. On this basis, the income restoration and rehabilitation measures are not applicable for these households, as described in the draft LARP. Livelihood improvement measures will be undertaken under existing governmental social support scheme. If based on updated LARP, there arises a need to develop income restoration program. NEGU will work closely with local community-based organizations and authorities to provide the necessary support and develop income restoration program.
71. The tentative LARP budget, based on compensation calculations for losses to agricultural land, forestry trees and plants, agricultural land replacement, and support allowances, is estimated to be $ 330,000. In order to ensure that sufficient funds are available for land acquisition and resettlement tasks, NEGU, as the executing agency (EA), will allocate 100% of the cost of compensation at replacement cost and expected allowances estimated in each LARP, plus contingencies before LARP implementation.
72. The EA and ADB agreed to split project components into seven sections. The draft LARP prepared during project processing stage have been updated into section-specific LARPs and SDDRs. Social Due Diligence Reports for Sarimay and Khorezm substations were prepared and endorsed by ADB. Also, ADB cleared Sections 2a and 6, as the LARP was updated and implemented. The contractor started civil works on cleared sections. Submission of the LARP update for (i) section 1 by 20 August 2019, (ii) section 2b by 11 September 2019, (iii) section 3 by 13 September 2019, and (iv) section 5 by 31 August 2019. After some delays, LARPs for these remaining 4 sections were completed in April 2021 as confirmed by an independent monitor engaged by ADB. LARP completion reports have been prepared for all the section-LARPs.
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73. Separate LARPs were prepared for Output 4 and Output 5. ADB cleared the draft LARP for Guzar-Regar transmission line rehabilitation in April 2020 and the draft LARP for Zafarabad- Sirdarya transmission line and associated substation in November 2020.
74. Output 4 will require permanent land acquisition of 2.48 ha from 28 AHs. Additionally, there will be temporary requisition of 171 ha from 21 AHs. The cost of compensation to affected households is estimated at $0.143 million and will be the responsibility of NEGU.
75. Output 5 will require permanent land acquisition of 2.65 ha and temporary land requisition of 306.69 ha. All land acquisition and requisition will be from agricultural lands and orchards, with the exception of 0.34 ha from residential landholdings. One dwelling will be demolished, with one AH to be relocated. The cost of compensation to AHs and landowners is estimated at $0.287 million and will be the responsibility of NEGU.
76. Section-wise LARPs and social due diligence reports (SDDRs) will be prepared following the detailed design. In sections without LAR impacts, ADB approval of the SDDR is a condition for commencing civil works, Compensation and other assistances prescribed in respective subprojects’ LARPs will be scheduled and paid, in full, to the AHs prior to commencement of civil works. The PMU will develop compensation payment plans after receiving the final design and confirmation of amount of affected assets and number of AHs and landowners. PMU, with support from its consultants, will closely monitor the EPCM contractors’ activities to ensure that works are done only in sections without LAR impacts or in sections where LARP has been fully implemented. In sections where compensation payments have been completed, PMU will prepare a LARP implementation completion report that confirms and documents the completion of disbursement of compensation. Monitoring of unanticipated LAR impacts during construction and grievances from affected people will be done. Related to this, semi-annual social monitoring reports will be prepared and submitted to ADB throughout project implementation which will be disclosed on the ADB website.
(iii) Indigenous Peoples
77. No special action is required concerning Indigenous Peoples safeguards under this project since there were no ethnic groups identified, which maintains cultural and social identities separate from the mainstream Uzbek society, fitting the ADB definition of Indigenous Peoples in the context of the project’s area of influence.
(iv) Institutional Arrangements for Safeguard Management
78. NEGU will have the overall responsibility to implement the EMP as the EA. The PMU within NEGU hired Safeguards Specialist who is responsible for the EMP implementation, monitoring, and reporting tasks set forth in the IEE.
79. The Project Management Consultant (PMC), recruited by NEGU, assisted the PMU in the project implementation, monitoring, and reporting of the implementation of the EMP during the construction phase. During the operation and maintenance phase, NEGU is responsible for ensuring that the EMP implemented by the operators of the substations and the OHL. The PMC is providing guidance to contractors in preparing site-specific EMPs (SEMPs) and endorse SEMPs for NEGU approval before construction or physical work.
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80. NEGU have overall responsibility to implement the LARP as the EA. The PMU is responsible for the day-to-day management of the LARP implementation. The PMU team will consist of Resettlement Expert responsible for planning, implementation, and monitoring of the LARP. The PMU works closely with relevant government agencies and community-based organizations. The PMU Resettlement Expert is carrying out internal monitoring routinely in close coordination with local khokimiyat (government).
81. The PMU established a simple and accessible grievance redress mechanism (GRM) to address grievances and complaints of any affected person in a timely and satisfactory manner. NEGU will ensure the GRM is properly staffed and working on ground and that the procedure to resolve issues will be followed strictly based on the five levels of grievance redressal.
(v) Information Disclosure and Consultation
82. The IEE report will be translated into Uzbek language and disclosed at project sites. The English version of the IEE report will be posted on the ADB website. Public consultation is being conducted along the transmission line route and in the communities where the substations are located. Records of the consultation will be attached to the final draft IEE.
83. The public consultation process is an ongoing process, continuing throughout the project phases and beyond. NEGU will do its best during construction, operation, and maintenance to inform the public of major environmental issues and concerns related to its operation through mass media and local community networks.
84. Nine consultations were carried out with the AHs during the LARP preparation. Similar consultations need to be carried out after the LARP is updated and before starting payment of compensations.
85. Disclosure meeting describing the final LARP will be organized to all AHs and respective community-based organizations and local authorities during the LARP evaluation stage. A leaflet in local language will be distributed to the AHs, relevant agencies, and civil society organizations during the disclosure meeting. The draft and final LARP documents will be disclosed on the websites of the NEGU and ADB upon approval by both ADB and the EA.
86. The project GRM will be disseminated via the LARP leaflet that will be distributed to the AHs through local khokimiyat, the mahalla (local community), village assembly of citizens, or farmers councils during the disclosure process.
VIII. GENDER AND SOCIAL DIMENSIONS
87. A poverty and socioeconomic assessment report was prepared. The increased efficiency and reliability of power supply resulting from the project will have a positive impact on economic growth, poverty reduction, and social services such as schools, colleges and kindergartens, clinics, and shops, which ultimately will improve well-being and community welfare. Improved energy supply will have a positive effect on business development and, thus, supports new job creation. The project has no gender issues envisaged during the project construction and implementation. The improvement in the delivery of electricity will equally benefit households and businesses run by women.
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IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION
A. Project Design and Monitoring Framework
88. The revised design and monitoring framework strikes out content for deletion and underlines content to be added.
Impact the Project is Aligned with Adequate and reliable power supply in Uzbekistan by 2023 (Program of Measures to Promote Structural Reforms, Modernization and Diversification of Production in 2015–2019)a Data Sources and Reporting Risks and Critical Results Chain Performance Indicators Mechanisms Assumptions Outcome By 2023: An expanded a. Power transmission capacity in a.–c. NEGU’s R: Investments made by and Khorezm and Karakalpakstan annual report other financiers that modernized regions increased to 813 MW (2014 have direct effects on high-voltage baseline: 513 MW) the project are delayed. transmission grid in b. Losses in power transmission Khorezm and network reduced to below 4%. Karakalpakstan (2014 baseline: 5%) regions Uzbekistan c. Energy not served reduced to below 80 GWh (2014 baseline: 120 GWh).
d. Exchange of electricity between Uzbekistan and Tajikistan increased to 4 TWh per year (2021 baseline: 1.5 TWh) (OP 3.1.3; OP 3.3.5; OP 7.1.3)
e. Transmission capacity sufficient to fully satisfy customer demand in Jizzakh region (2021 baseline: Capacity constraint 2251 GWh per year) Outputs 1. A 220 kV New 220 kV transmission line of Commissioning R: Weak institutional transmission 364 km commissioned and certificates by capacity delays approval line between operational by 2021 NEGU of procurement Takhiatash (2014 baseline: 0) contracts and TPP–Khorezm registration. substation– Ellikkala R: Weak financial substation management and commissioned accounting policies, 2. Substations Two substations at Takhiatash TPP Commissioning procedures, and rehabilitated and Khorezm rehabilitated and certificates by systems. and new expanded and one new 500/220 kV NEGU switching switching station at Ellikkala station constructed and operational by constructed 2021 (2014 baseline: 0)
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Data Sources and Reporting Risks and Critical Results Chain Performance Indicators Mechanisms Assumptions 3. Support for a. At least 50 staff (at least 20% a.–b. NEGU’s institutional women) trained in key aspects of project completion development transmission network operation and report and capacity maintenance by 2023 (2014 building baseline: 0)
b. At least 10 staff (at least 20% women) from NEGU project management unit trained in procurement, contract management, financial management, safeguards, and overall project management by project supervision and management consultants by 2020 (2014 baseline: 0) 4. The Guzar– Transmission capacity of L507 from Commissioning R: Construction is Regar 500 kV the Guzar substation in Uzbekistan certificates by delayed because of transmission to the Regar substation in Tajikistan NEGU delay in LARP line (64.5 km) increased to 900 MW by 2022 implementation, restored (2021 baseline: 0) including compensation (OP 3.1.3; OP 3.3.5; OP 7.1.3) payments, and/or significant changes to environmental 5. Double- Transmission capacity of high- Commissioning management plan circuit 220 kV voltage lines from the Syrdarya TPP certificates by requirements entailing transmission complex to the Jizzakh region NEGU additional mitigation line (142 km) increased to 525 MW (2021 measures. between the baseline: 325 MW) Syrdarya TPP and the Zafarabad substation in the Jizzakh region constructed
Key Activities with Milestones
1. A 220 kV transmission line Takhiatash TPP–Khorezm substation–Ellikkala substation commissioned 1.1 Tender documents finalized by September 2015 (completed) 1.2 Land acquisition and compensation completed by March 2016 (completed) 1.3 Equipment and materials, and civil works contracts procured by June 2016 (completed) 1.4 Construction and installation completed by March 2021 (completed) 1.5 Commissioning and final test completed by June 2021
2. Substations rehabilitated and new switching station constructed 2.1 Tender documents finalized by September 2015 (completed) 2.2 Land acquisition and compensation completed by March 2016 (completed) 2.3 Equipment and materials, and civil works contracts procured by June 2016 (completed) 2.4 Construction and installation completed by March 2021 (completed)
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Key Activities with Milestones
2.5 Commissioning and final test completed by June 2021
3. NEGU’s capacities for project supervision and management enhanced and operational efficiency improved 3.1 Project supervision and management consultants engaged by December 2015 (completed) 3.2 Staff from project management unit trained in procurement, contract management, financial management, safeguards, and overall project management by project supervision and management consultants by June 2021 3.3 Selection of new project supervision and management consultant by December 2020 (completed) 3.4 Execution of contract and consultant mobilization by April 2021 (completed)
4. The Guzar–Regar 500 kV transmission line (65.4 km) restored 4.1 Tender documents finalized and issued by April 2020 (completed) 4.2 EPC contract awarded to selected bidder by December 2020 (completed) 4.3 Advance payment to EPC contractor made by December 2020 (completed) 4.4 Contractor mobilized by February 2021 (completed) 4.5 LARP implementation completion reported by June 2021 4.6 Construction, commissioning, and final test completed by December 2021
5. Double-circuit 220 kV transmission line (142 km) between the Syrdarya TPP and the Zafarabad substation in the Jizzakh region constructed 5.1 Tender documents finalized and issued by April 2021 for substations (completed) 5.2 Tender documents finalized and issued for high-voltage line by June 2021 5.3 EPC contract awarded for substation construction package by September 2021 5.4 Advance payment to EPC contractor for substation construction by September 2021 5.5 EPC contract awarded for high-voltage line construction package by December 2021 5.6 Advance payment to EPC contractor for high-voltage line construction by December 2021 5.7 EPC contractors for both packages mobilized by January 2022 5.8 LARP implementation completion reported by April 2022 5.9 Construction, commissioning, and final tests completed by December 2023
Project Management Activities Recruitment of project implementation consultants for management of expanded project scope Completion and issuance of invitation for bids for Syrdarya–Zafarabad substations and transmission line Vigilant monitoring of social and environmental safeguards compliance and satisfaction of project implementation and financial reporting requirements Inputs Asian Development Bank $150 million (ordinary capital resources) Government of Uzbekistan $25 million Joint Stock Company NEGU $80 million Total $255 million
A = assumption; EPC = engineering, procurement, and construction; GWh = gigawatt-hour; km = kilometer; kV = kilovolt; L507 = Line No. 507; LARP = land acquisition and resettlement plan; MW = megawatt; NEGU = National Electric Grid of Uzbekistan; OP = operational priority; R = risk; TPP = thermal power plant; TWh = terawatt-hour. Note: Expected values and methodological details for all OP indicators to which this operation will contribute results are detailed in Contribution to Strategy 2030 Operational Priorities (accessible from the list of linked documents in Appendix 2). a Government of Uzbekistan. 2015. Program of Measures to Promote Structural Reforms, Modernization and Diversification of Production in 2015–2019. Tashkent. Source: Asian Development Bank
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B. Monitoring
89. Project performance monitoring. The following indicators will be updated in the quarterly progress reports and at the time of the semiannual meetings and the midterm review expected approximately 12 months from the date of effectiveness of the loan amendment. Financial indicators will be monitored annually at the time of submission of the annual financial reports.
Project Performance Indicators • Installed transmission line by kV (km) (disaggregated by subproject) • Power transformer capacity (megavolt amperes [MVA]) (disaggregated by subproject) • Losses in high-voltage transmission network (%) (disaggregated by subproject) • Average yearly energy not served (kilowatt-hour [kWh]) (disaggregated by subproject, as relevant) • Power tariff structure and level (Sum/kWh) • Power trade volume (GWh/year) and amount ($ million) by country • JSC NEGU's annual report and financial statements (including balance sheet/cashflow/income statement)
Risks and Assumptions • Customer tariff by customer category • Infrastructure in Tajikistan is intact and serviceable, and the Tajikistan transmission system operator completes interconnection in concert with NEGU (for Output 4) • Delay in construction due to delay in the LARP implementation, including compensation payments (for Output 4 and Output 5)
Financial Indicators • Net income after tax – annually • Debt service coverage ratio of NEGU (the ratio of cash flow from operations to annual debt service obligations) – annually • Self-financing ratio (the ratio of cash flow from operations to average capital expenditures) – annually • Days in receivables (average accounts receivable x 360 days/revenues)
90. Compliance monitoring. Loan covenants––policy, legal, financial, economic, environmental, and others––will be monitored through semiannual project meeting and the midterm review.
91. Safeguards monitoring will be performed by the project supervision and project management consultant and the PMU. The monitoring results will be included in the quarterly progress reports, and semiannual environmental reports. Within 3 months after completion of all civil works, a report on the project's environmental compliance performance (including lessons learned that may help the PMU in their environmental monitoring of future projects) will also be prepared. This report will be part of the input to the overall project completion report. The PMU will prepare and submit to ADB semiannual environmental monitoring reports until ADB’s project completion report is issued. The reports will be disclosed on the ADB website. The relevant information of the reports in Russian and Uzbekistan languages will also be disclosed to the affected people by posting on the NEGU website. In addition to the above-mentioned reports, in case of any accident related to occupational and community health and safety, the PMU is expected to (i) report to ADB within 72 hours, and (ii) prepare and submit an incident report with
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action plan within 7 days of the occurrence. The project management consultant will support the PMU in preparing such reports.
C. Evaluation
92. Inception Mission. ADB will field an inception mission after loan signing to (i) establish a working relationship between ADB and the EA, and (ii) to ensure that the borrower and the EA understand ADB's procedures.
93. Review Missions. ADB will field review missions at least once a year to review the overall implementation of the project and update project implementation schedule based on mission findings.
94. Midterm Review Mission. ADB will field a midterm review mission after approximately 12 months from the effectiveness of the loan amendment to allow the loan to finance Output 4 and Output 5 to assess whether attainment of the project’s objectives (purpose in terms of the design and monitoring framework) is still likely.
95. Project Completion Review Mission. ADB will field a project completion review mission upon physical completion of the project to commence preparation of ADB's project completion report. NEGU will submit a project completion report to ADB within 6 months of physical completion of the project.12
D. Reporting
96. NEGU will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system and containing sections on compliance with safeguard requirements; (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; (iii) semiannual environmental monitoring reports starting from the contract award to be submitted to ADB in January and July (within 1 month after each half calendar year) until ADB’s project completion report is issued;13 and (iv) a project completion report within 2 months of physical completion of the project. To ensure projects to continue to be both viable and sustainable, project accounts and the executing agency AFSs, together with the associated auditor's report, should be adequately reviewed.
E. Stakeholder Communication Strategy
97. Project information will be strategically disseminated through media at main milestones including loan signing, contract awards, and project completion. The GRM will be established at the PMU and each relevant PES and distribution service centers, by phone and email, and through public consultation events.
98. In compliance with the minimum requirements of ADB’s Public Communications Policy (2011), the NEGU will designate an officer as focal point for regular contact with project-affected people and other stakeholders at the PMU. The designated officer will be responsible for obtaining
12 Project completion report format available at http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-Sector- Landscape.rar. 13 See para.95 for detail.
46 the information from the complainant to identify source of the problem and verify the complaint. The PMU shall provide project performance updates on progress every 6 months.
ADB Public Communications Strategy Project Documents Means of Responsible [language] Communication Party Frequency Audience(s) Project Information Document ADB’s website ADB Initial PID no later than General Public (PID) 30 calendar days of [English/Russian] approval of the concept paper; quarterly afterwards Design and Monitoring ADB’s website ADB Draft DMF after post fact- General Public Framework (DMF) finding mission [English] Report and Recommendation ADB’s website ADB Within 2 weeks of Board General Public of the President approval of the project [English] Legal Agreements ADB’s website ADB Within 2 weeks of Legal General Public [English] Agreements signing Social Poverty Reduction and ADB’s website ADB Within 2 weeks of Board General Public, Social Strategy approval of the project project-affected [English] people in particular Project Administration Manual ADB’s website ADB Within 2 weeks of Board General Public [English] approval of the project Major Change to Project ADB’s website ADB Within 2 weeks of General Public [English] approval of the change Initial Environmental ADB and ADB and Upon receipt by ADB General Public, Examination Reports NEGU’s website NEGU project-affected people in particular Environmental Monitoring ADB’s and ADB and Semiannually, to be General Public, Reports NEGU’s website NEGU disclosed upon receipt by project-affected ADB people in particular Completion Report ADB’s website ADB Within 2 weeks of General Public [English] circulation to the Board for information Business opportunities, bidding ADB’s website ADB Per project progress General Public process and guidelines, results NEGU’s website NEGU of bidding process, ADB = Asian Development Bank, NEGU = Joint-Stock Company National Electric Grid of Uzbekistan.
99. The work plan on public information program is summarized under XIII Gender and Social Dimensions.
X. ANTICORRUPTION POLICY
100. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project. 14 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all project contractors, suppliers, consultants, and other service providers. Individuals 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 project.15
14 ADB. 1998. Anticorruption Policy. Manila. 15 ADB. Anticorruption and Integrity.
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101. To support these efforts, relevant provisions are included in the loan agreement and/or regulations and the bidding documents for the project. Procurement will follow ADB's Procurement Guidelines (April 2015, as amended from time to time), consultant selection will adopt ADB's Guidelines on the Use of Consultants (March 2013, as amended from time to time), and disbursement will be made in accordance with ADB's disbursement policies, guidelines, practices, and procedures.
XI. ACCOUNTABILITY MECHANISM
102. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.16
XII. RECORD OF THE PROJECT ADMINISTRATION MANUAL CHANGES
103. All revisions and updates during the course of implementation should be retained in this Section to provide a chronological history of changes to implemented arrangements recorded in the project administration manual.
Date Revised/Updated Project Administration Manual Section Change 28 September 2017 Key Persons Involved in Implementation Updated 28 September 2017 Contract Award and Disbursement Schedule Updated 28 September 2017 Procurement Plan Updated 2 November 2018 Key Persons, Procurement Plan, Contract Award Updated and Disbursement Schedule August 2019 Key Persons, Procurement Plan, Contract Award Updated and Disbursement Schedule, Safeguards June 2021 Major Change in Scope for Board approval (i) Project description to add a new scope (i) Updated (ii) Overall Implementation Plan (ii) Updated (iii) Key persons involved in the implementation (iii) Updated (iv) Cost tables (iv) Revised (v) Allocation and withdrawal of loan proceeds (v) Revised (vi) Revised (vi) Contract awards and disbursement and s- (vii) Updated curve (viii) Revised (vii) Safeguards (ix) Updated (viii) Design and monitoring framework (ix) Procurement plan
16 For further information, visit ADB. Accountability Mechanism.