Technical Assistance Consultant’s Report

Project Number: 49387-001 June 2018

Kingdom of : Second GMS Tourism Infrastructure for Inclusive Growth Project (Financed by ADB PPTA)

The document is prepared by Norconsult AS(NORWAY) in association with NORCONSULT MANAGEMENT SERVICES, INC. (PHILIPPINES)

For Ministry of Tourism, Kingdom of Cambodia

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Appendix 11: Project Climate Risk Assessment and Management

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 11

Project Climate Risk Assessment and Management1

I. Basic Project Information

Project Title: Second Greater Mekong Subregion (GMS) Tourism Infrastructure for Inclusive Growth Project Project Budget: $30 million ADB; Government $0.89 million Location: Kep and Preah Sihanouk Provinces, Cambodia Sector: Transport; Water and other Urban Infrastructure and Services; Industry and Trade Theme: Inclusive economic growth, environmentally sustainable growth, regional integration Brief Description (particularly highlighting aspects of the project that could be affected by weather/climate conditions): The project will help transform secondary GMS central and southern corridor towns into economically inclusive, competitive tourism destinations by improving transport infrastructure, urban environmental services, and capacity to sustainably manage tourism growth. Residents in project areas are expected to directly benefit from climate- resilient infrastructure development and increased access to economic opportunities. The project outputs are: (i) urban-rural access infrastructure and urban environmental services improved; (ii) capacity to implement ASEAN tourism standards strengthened; and (iii) institutional arrangements for tourism destination management and infrastructure O&M strengthened. Output 1 infrastructure subprojects, summarized below, are most sensitive to weather/climate conditions.

1. Kep Solid Waste Management Improvements. The subproject will improve solid waste management in the seaside town Kep by converting an 9.5-hectare active open dumpsite into a managed landfill with about 250,000 m3 storage capacity Subproject components include: (i) earthworks and perimeter runoff interceptor drains; (ii) impermeable liners, leachate collection and treatment, and landfill gas recovery system; (iii) small materials recovery facility for waste separation and recycling; (iv) medical waste treatment and storage; (v) septage treatment facility; and (vi) site office, toilets, and fencing. The landfill access road (3 km) will be paved with reinforced concrete (6m carriageway and verges) to accommodate new waste collection trucks to be provided by the project.

2. Preah Sihanouk Seaside Access and Environmental Improvements. Access and environmental conditions at Ocheuteal and Otres beaches suffers from poor pedestrian access, traffic congestion, unsanitary drainage with intermittent flooding, and lack of public amenities. This situation creates public health hazards for residents and tourists, deters private investment, and puts future tourism growth at risk. To address these problems, subproject components include: (i) road improvement to asphalt concrete (2.0 km) at Ocheutal Beach; (ii) road improvements to reinforced concrete (4.0 km) at Otres beach; and (iii) improve footpaths, lighting and landscaping along the new roads and connect them with a 0.3 km concrete path across the Preah Damnak peninsula.

3. Preah Sihanouk City-Koh Rong Passenger Piers Improvements. The existing dilatated passenger piers are inadequately constructed and frequently overwhelmed during peak periods. They lack sanitation and parking, causing congestion and hazardous conditions for passengers and boat operators. The subproject will address these problems by: (i) constructing a 600 m2 concrete pier with associated facilities at Victory Beach on vacant government-owned land (4,000 m2) that is reserved for this purpose, incorporating ticketing/waiting areas, food and beverage service facilities, toilets, and vehicle parking; (ii) constructing a 750m2 concrete pier at Koh Touch village, Koh Rong island, incorporating ticketing/waiting area facilities, sanitation, tourist information and retail kiosks, and (iii) install storm drains along the 850m-long 2m-wide walkway at Koh Touch Beach and pave it with reinforced concrete. II. Summary of Climate Risk Screening and Assessment (Initial climate risk screening can be carried out using AWARE for Projects. Upon the completion of this initial screening, a report will be generated with risks ranked for different climate hazards and advice for possible next steps provided. Mission leaders for projects ranked at medium or high risk could arrange for more detailed climate risk assessments, to further identify the nature, level of risks, and more critically, options to manage such risks within the context of the proposed project.)

1 Follows ADB (2012) Guidelines for Climate Proofing for Investments in Transport Sector: Road Infrastructure Projects; and ADB (2016) Climate Proofing for Investments in Urban Water Sector: Water Supply & Sanitation Projects

335 Appendix 11

A. Sensitivity of project component(s) to climate/weather conditions and sea level The climate/weather variables to which the three (3) subprojects are sensitive are: 1) sea level rise, increased storm surge, and increased wind velocity; 2) increased rainfall and resultant local flooding; and 2) maximum air temperature. The climate/weather sensitive components of the subprojects are summarized below. Sensitive subproject components: Sensitivity of components to climate/weather conditions & projected climate change: Kep Solid Waste Management Improvements 1. Upgrade 3.0km X 6m access road; and Increased rainfall intensity and surface flooding 2. New peripheral stormwater interceptor drainage overwhelms drains, road access, and impedes system. proper leachate collection and treatment

Preah Sihanouk Seaside Access and Environmental Beachfront roads and peninsula footpath are sensitive Improvements to sea level rise and increased storm surge, which Upgrade beachfront roads and footpaths along Otres could intermittently flood the road surfaces and weaken and Ocheutal beaches. the road/path foundation. Intense rainfall could flood overwhelm drains and flood road surfaces. Asphalt concrete and concrete able to withstand higher air temperatures. City-Koh Rong Passenger Piers Improvements The two piers and shoreline tourist facilities such as Construction of two piers and shoreline tourist facilities. ticket and retail kiosks and toilets are sensitive to sea level rise, storm surge, and wind damage. Sensitivity of subproject to increased rainfall & local flooding is a minor. B. Climate Risk Screening The subprojects were initially screened for climate change risk with ADB’s climate change checklist as part of the Rapid Environmental Assessment. The checklist identified a risk level of High for the two coastal subprojects, and Medium for the inland landfill subproject. The AWARE climate risk software was subsequently applied to the three subprojects and which generated a risk level of High for all three subprojects. The key climate change risk topics are described below.

Risk topics designated by AWARE: Description and assessment of risk:

1. Sea level rise: “High risk”. 1. Both Preah Sihanouk coastal subprojects are sensitive to sea level rise and associated potential increase in storm surge; and associated increased wind velocity. The Kep solid waste subproject is not sensitive to sea level rise.

2. Increased flooding from increased precipitation: “High- 2. The high flooding risk assigned by AWARE to all risk”. three subprojects is not justified. Rainfall-induced flooding is Medium to Low-risk for the Preah Sihanouk beachfront access road upgrades because there is sufficient natural drainage in this sandy beach area. Moreover, the new passenger piers on Koh Rong island and in Preah Sihanouk City are not sensitive to increases or decreases in rainfall as they are elevated, well drained structures. The upgraded landfill and 3.0km access road is sensitive to increased rainfall but considered Medium-risk because it is not in a low- lying area. 3. Landslides from increased precipitation: “High-risk”. 3. High-risk of landslide from increased precipitation assigned to all three subprojects by AWARE is not justified. The slightly hilly site for the Kep landfill has no steep slopes and is not sensitive to landslide or even landslip. Moreover, the

336 Appendix 11

beachfront access roads are on flat coastal land. The pier site on Koh Rong island is located at the 4. Increased temperature: “Medium-risk”. base of a steep slope and thus is potentially exposed to local landslip. However, the risk to the subproject is low because the steep slope is densely forested and because the pier is set over the water.

4. The Medium-risk of increased temperature is accurate which applies to asphalt concrete road surfaces. Reinforced concrete road sections are Low-risk. C. Climate risk assessment and impact Mean global sea level has increased 3.2 mm/yr since 1990, and under the medium RCP4.5 emission scenario, average output of 21 climate models of the CMIP5 project mean sea level is to increase 26cm and 47cm by 2065 and 2100, respectively.2 Cambodia does not monitor sea level, thus future sea level rise for coastal Preah Sihanouk are drawn from sea level rise projections for nearby monitoring sites. Under the 4.5 RCP emission scenario sea level at Ha Tien, Viet Nam (about 100 km southeast of Preah Sihanouk City) is projected to increase an average of 23cm and 55cm by 2060 and 2100, respectively.3 Using data from Thailand sea level at about 300 km northwest of Preah Sihanouk is projected to increase 10 cm by 2025.4 Rainfall and air temperature is projected to increase in Preah Sihanouk and Kep provinces..5 Under the RCP8.5 emission scenario, downscaled projections of 5 models of CMIP5 show maximum 1-hour rainfall in Sihanoukville for the 10- year return period increasing 7% by 2050. Air temperature is projected to increases between 0.3oC and 2.0oC by 2050.6 Given these projections, climate resilience measures included in the feasibility design of the subprojects are summarized below. III. Climate Risk Management Response within the Project (Describe project activities, outputs, indicators and/or targets aimed to address identified climate risks and budgetary allocations, and other adaptive measures to be included/considered in the project design to address climate risks identified). A 2-prong strategy to adapt the subprojects to projected climate change incorporates “hard” and “soft” measures to make the infrastructure components resilient to climate change. The hard resilience measures consist of engineering design criteria that are modified to anticipate projected changes in rainfall, sea level rise, storm surges and wind, and temperature. Soft resilience measures focus on capacity development for management and maintenance of the upgraded infrastructure.

1. Kep Solid Waste Management Improvements. The peripheral drainage system design capacity (m3) will be increased by 7% to accommodate projected 10-year maximum 1-hour rainfall. The access road’s lateral V-drainage capacity is increased 7% to accommodate projected increases in road catchment runoff, to be finalized using Cambodia Road Design Standards considering road catchment runoff (Q) using Rational Method for small rural road catchments; and the Rational Method for calculating road drainage.7,8 The existing dirt road will be replaced with concrete slab, providing maximum resilience to increased temperature and water absorption The estimated marginal cost of climate resilience measures is $0.6 million.

2. Preah Sihanouk Seaside Access and Environmental Improvements. The existing dirt road along Otres beach road is close to the high tide mark. The height of that road will be raised by at least 26cm, equal to projected sea level rise at 2065. Lateral and cross drainage capacity, especially culverts for all road sections will be increased over present design norm to accommodate the projected 7% increase in maximum 1-hour rainfall. Road side drains will connect to a 1 m storm drain that channels rainwater and wave-wash to the sea. Drainage capacity will be finalized at detailed design, Cambodia Road Design Standards considering road catchment runoff (Q) using Rational Method for small rural road catchments; and the Rational Method for calculating road drainage. The upgraded road sections will be constructed with asphalt concrete and reinforced concrete slab to provide maximum

2 IPPC. (2014). Synthesis Report of AR5. 3 MONRE (2016). Sea Level Rise Scenarios for Viet Nam. 4 ADB TA - 7459 REG: Greater Mekong Subregion Biodiversity Conservation Corridors Project Pilot Program for Climate Resilience Component, Cambodia, Supplementary Appendix M. 5 ADB. (2017). Provincial Water Supply and Sanitation Project (PWSSP) 48158-002-CAM. 6 ADB. (2016). Road Asset Management Project, Cambodia. 7 State of Queensland (2015). Department of Transport and Main Roads, Road Drainage Manual. 8 ADB. 2016. Climate Resilience for Provincial Road Improvement Project. Loan 2839-CAM (SF) / 8254-CAM.

337 Appendix 11 resilience to increased temperature and prevent water absorption. Road slope material and geometry will be resilient to erosion from possible inundation from seawater during major storm events. The estimated marginal cost of climate resilience measures is $0.87 million.

3. Sihanoukville City-Koh Rong Passenger Piers Improvements. The height of the two new piers at Koh Rong and Preah Sihanouk City have been set equal to the current maximum high tide plus the projected higher sea level increase in nearby Ha Tinh (55cm), essentially raising the piers about half a meter higher than present. Pier structures and foundations will be reinforced concrete and steel, significantly stronger than the existing facilities, able to withstand storm surges and high winds. The 850m concrete footpath on Koh Touch will be resilient to lateral erosion from periodic inundation during storm events, constructed of reinforced concrete. The estimated marginal cost of climate resilience measures is about $0.80 million. 4. Tourism destination management and infrastructure O&M capacity building programs. The project budgets $1.0 million for tourism destination management and infrastructure O&M capacity building. Provincial departments of public works and transport will receive road, drain, pier and landfill asset management training and institutional development support to strengthen budget planning for O&M.

338 Appendix 12: Climate Change Resilience Measures

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 12

CLIMATE CHANGE RESILIENCE MEASURES: CAMBODIA

1. The three subprojects in Kep and Preah Sihanouk, Cambodia consist of infrastructure improvements such as upgraded coastal roads and pedestrian walkways, new tourist piers and support buildings, and an upgraded managed landfill (Table 1). A detailed description of the proposed subprojects is in the Project Administration Manual.

Table 1 : Subproject Components

Province / Description Subproject Kep Kep Solid Subproject will develop: (i) site access road – 6m wide to landfill turnoff (2.85km), 4m wide to Waste landfill (750m); (ii) site clearance and 4 clay lined cells developing as much of the 9ha as Management required, with gas collection and flaring; (iii) 4m concrete site roads (inside boundary); (iv) retire Improvements existing waste into one cell; (v) lined leachate sumps with pumped leachate recirculation; (vi) waste separation and recycling facility; (vii) hazardous/medical waste treatment area separately fenced; (viii) septage treatment facility (0.5ha); (ix) perimeter site drainage system; (x) 3 x 10m3 collection vehicles and 1 bulldozer; (xi) 1 x 8m3 and 1 x 5m3 septage trucks (xii) site office, toilets and fencing; (xiii) power and water supply to site; and (xiv) monitoring boreholes. Preah Sihanouk Sihanoukville Section 1. Northwestern end of Ochheuteal Beach: Landscaping and street side improvements Seaside where possible, generally 10m width on seaward side and 5m on opposite side, plus street Access and lighting along the seaward side every 25m. Environmental Section 2. Widen existing 6m road to 8m, with 2.5m footpath rebuilt on the seaward side. Reseal Improvements full road width to conceal joint. Box culvert drain within the 8m road on both sides with concrete covers suitable for car traffic loading and manholes under footpaths. Short outfalls from road drain every 200m to tree planted area between road and beach. Street lighting along seaward side every 25m. Section 3. End of Ochheuteal Beach (340m): Short section of curved road connecting the new section 2 road to existing road which is closer to the sea. Road will be 8m wide with 3.5m footpaths either side. Box culvert drain within the 8m road on both sides with concrete covers suitable for car traffic loading and manholes under footpaths. Outfalls for road drains at both ends of 340m section. Natural waterways at both ends will be utilized. Landscaping in sections where possible (estimate 1m width either side on average) and street lighting along seaward side every 25m. Section 4. Peninsula: Upgrade existing path around the seaward side of the peninsula and add street lighting every 25m. Section 5. Widen road to 8m with 3.5m foot/cycle paths either side. Landscaping on seaward side (average 5m width). Provide box culvert drain within the 8m road on seaward side only with concrete covers suitable for car traffic loading and manholes under footpaths. Outfalls for road drains every 200m onto beach above high tide mark, with discrete wingwall outlet structures. Street lighting along seaward side every 25m. Section 6. Southeast of Otres Corner (Otres 1): Provide 8m road and 3.5m footpaths either side. Pockets of landscaping will be provided where feasible. Provide box culvert drain within the 8m road on both sides with concrete covers suitable for car traffic loading and manholes under footpaths. Outfalls for road drains every 200m onto beach above high tide mark, with discrete wingwall outlet structures. Street lighting along seaward side every 25m. Section 7. Otres 1: Widen road to 8m with 3.5m foot/cycle paths either side. Current landscaping to remain. Provide box culvert drain within the 8m road on the seaward side only with concrete covers suitable for car traffic loading and manholes under footpaths. Short outfalls from road drain every 200m onto beach above high tide mark, with discrete wingwall outlet structures. Street lighting along seaward side every 25m. Four access roads to beachfront, each

340 Appendix 12

approximately 130m, with parking bays. Section 8. Otres 2: At south east end of beach, which is built up both sides. Widen road to 8m with 3.5m foot/cycle paths either side. Current landscaping to remain. Provide box culvert drain within the 8m road on both sides with concrete covers suitable for car traffic loading and manholes under footpaths. Short outfalls from road drain every 200m onto beach above high tide mark, with discrete wingwall outlet structures. Street lighting along seaward side every 25m. Two access roads to beachfront, approximately 150m and 60m, with parking bays. Beach Sections: Public toilet blocks with outdoor showers every 500m, within the 50m coastal strip of public land resulting in 7 blocks on Otres beach and 6 blocks on Ochheuteal beach. Sihanoukville Component 1. In Sihanoukville construct a new standard tourist ferry port facility built on – Koh Rong concrete piles with service facilities on land including a loop road access, carpark, toilets, 60m2 Passenger of port office space, 180m2 of shaded waiting area, 132m2 ticket office and tourist information Piers with ASEAN standard toilets, and 4 commercial units of 120m2 total. The pier is 90m long with a Improvements 20m “L” at the end of it for protection from the prevailing winds, allowing space for up to 10 15m boats at one time Component 2. On Koh Rong island (Koh Touch beach) construct a 2m wide concrete footpath from the proposed new ferry pier (below) to the north-eastern end. Also, construct 3 concrete drains following the natural path of the creeks with culverts underneath the footpath under Component 1, with wingwall outlets. Component 3. On Koh Rong island (Koh Touch beach) construct a new passenger ferry pier at the south end of the beach, with a 75m2 public toilet and ticket office block, a 75m2 shaded waiting area, an additional indoor 75m2 waiting room, 3 commercial units of total 48m2. The pier will be 80m long with a 30m landing at end allowing space for up to eight 15m boats at one time. Source: Consultant’s estimates.

2. The Ministry of Environment uses international and recent national research conducted by the IPCC1, UNEP2, World Bank3, ADB4, to generate climate change scenarios for the country. All recent studies show that against the historical record, mean air temperatures could increase until the end of the current century by 0.5–2.7oC, with varying higher estimates in minimum and maximum daily temperatures. Annual rainfall is projected to change by -11% and +31% until 2100. Due to thermal expansion of water and ice cap melting sea level is projected to rise by as much as 1m by 2100. However, while sea level is a key consideration for coastal development, storm surge elevates the risk of catastrophic events. Storm surge is the temporary elevation of ocean that occurs during a major windstorm. Storm surge arises from the complicated interaction among windspeed, nearshore bathymetry, and shoreline exposure. For example, storm surge in Hong Kong has been recorded between 0.5 and 1.5 m above mean sea level and is expected to increase with climate change. 5

3. Cambodia’s Coastal Zone. The recent assessment of regional climate change in Koh Kong province6 for two scenarios of future GHG emissions (4.5 and 8.5 Representative Concentration Pathways) show increases in air temperature against the baseline of 1980-1999 of 0.7–1.0 oC by 2025. However, contrasting projected changes to air temperature and the longer-term projections of rainfall from other studies above show annual precipitation decreases

1 IPCC 2014. IPCC Fifth Assessment Report: Working Group 2 Impacts, Adaptation and Vulnerability Chapter 24 Asia Intergovernmental Panel on Climate Change. 2 UNEP, 2010. Assessment of Capacity Gaps and Needs of Southeast Asian Countries Addressing Impacts, Vulnerabilities, and Adaption to Climate Variability and Climate Change. 3 World Bank, GFDDR, 2011. Vulnerability, Risk Reduction, and Adaptation to Climate Change: Cambodia. 4 ADB TA - 7459 REG: Greater Mekong Subregion Biodiversity Conservation Corridors Project Pilot Program for Climate Resilience Component, Cambodia, Supplementary Appendix M. 5 Lee et al., 2010. Sea level Rise and Storm Surge: Impacts of Climate Change in Hong Kong. 6 Thoeun Hang Sen, 2015. Observed and Projected Changes in Rainfall and Temperature in Cambodia. Water and Climate Extremes.

341 Appendix 12 by -1 to -2.5% by 2025. By 2025 sea level is expected to increase 10cm. Given these projections, climate resilience measures included in the feasibility design of the subprojects are summarized below.

4. Kep Solid Waste Management Improvements. The main relevant projected climate change variable is rainfall increase. The upgraded landfill access road and internal landfill roads will be higher than any projected local flooding from extreme rainfall events. Lateral and cross drains for the two road sections will have sufficient volume to handle increased storm water runoff events. Similarly, the road beds must be constructed of erosion-resistant aggregates, able to withstand heavy road-surface and lateral runoff. If constructed with concrete the upgraded access road will not be sensitive to projected increases in maximum air temperatures. Importantly, the landfill requires a perimeter surface runoff drainage system of sufficient capacity to protect cells from inundation.

5. Preah Sihanouk Province. The new and upgraded roads, landscaping and tourist facilities along Otres and Ochheuteal beaches, including the path around the peninsula share the same requirements as the landfill access road in Kep. The elevations of all upgraded roads and walkways, tourist service buildings and facilities will be above project local flooding from extreme rainfall events, with sufficient lateral drainage. The road and walkway beds, and foundations of all tourist facilities, will be constructed of flood-resistant aggregates. The elevations of subproject infrastructure will remain accessible, consistent with the elevations of adjacent buildings and connecting infrastructures.

6. To account for projected sea level rise and storm surge, roads, walkways, and tourist facilities along Otres, Ochheuteal, and Koh Touch beach will be set at least 1.0 m above the current maximum spring high tide mark or follow guidelines and standards on beachfront road and walkway heights. New piers on Victory beach and Koh Touch beach will also set at least 1.0 m above the current maximum spring high tide mark. Storm surge resilience needs to come primarily from infrastructure design measures that are strong enough to withstand the lateral forces and erosion potential of storm surge while the infrastructures is inundated. Resilience also comes from “softer” early warning and response planning that allows unfixed and moveable assets (e.g., boats, chairs, tables, recreation equipment) to be tied down or moved inland. This same early warning system would also be used to move tourists out of affected areas. Thus, the engineering designs of the new piers, new and upgraded beachfront roads and pedestrian walkways will be strong enough to withstand projected storm surges.

7. Greenhouse Gas Emissions Abatement. The upgraded Kep managed landfill gas (CH4) recovery and flaring system will prevent future GHG emissions. Additionally, commissioning a septage treatment facility will partly offset GHG emissions from septic tanks in Kep. Installation of energy efficient lighting, required by the ASEAN Green Hotel Standard, will also help reduce greenhouse gas emissions.

342 Appendix 13: Resettlement Due Diligence Report

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Kep Town Solid Waste Management Improvements Preah Sihanouk – Koh Rong Passenger Piers Improvements

The document is prepared by the Ministry of Tourism under the Royal Government of Cambodia, for the Asian Development Bank. The views expressed herein do-not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature.

Appendix 13

LIST OF ABBREVIATIONS

ADB – Asian Development Bank AH – Affected Household AP – Affected Person DMS – Detailed Measurement Survey DOT – Department of Tourism DPWT – Department of Public Works and Transport EA – Executing Agency EMP – Environmental Management Plan GAP – Gender Action Plan GMS – Greater Mekong Subregion IA – Implementing Agency IOL – Inventory of Loss IR – Involuntary Resettlement KSWMI – Kep Solid Waste Management Improvements LAR – Land Acquisition and Resettlement MEF – Ministry of Economy and Finance MOT – Ministry of Tourism MPWT – Ministry of Public Works and Transport O&M – Operations and maintenance PIB – Project Information Booklet PRC – Provincial Resettlement Committee RC – Resettlement Committee RCS – Replacement Cost Survey RDDR – Resettlement Due Diligence Report RP – Resettlement Plan SES – Socio-economic Survey SPS – Safeguards Policy Statement (ADB, 2009) TOR – Terms of reference TWG – Tourism Working Group

CURRENCY EQUIVALENTS (As of 12 December 2017)

KHR 1.00 = $0.0002 $1.00 = KHR 4,200

344 Appendix 13

DEFINITION OF TERMS

Compensation Payment in cash or in kind to replace losses of land, housing income, and other assets caused by the project/subproject. Cut-off Date Refers to the date after which people will not be eligible for compensation or assistance. The cut-off date for eligibility for entitlements of this project will be the completion date of the detailed measurement survey (after completion of the detailed design of the components). Eligibility Any person who, at the cut-off date was located within the affected area of the project or any component or subprojects thereof and would be considered an "affected person". Involuntary Addresses social and economic impacts that are permanent or temporary and Resettlement are (i) caused by acquisition of land and other fixed assets, (ii) change in the use of land, or (iii) restrictions imposed on land as a result of an ADB operation, or(iv) loss of resources, and means of livelihood or (v) social support systems, which people suffer as a result of the project and project components Land Acquisition The process whereby a person is compelled by a public agency to alienate all or part of the land he/she owns or possesses, to the ownership and possession of that agency, for a public purpose, in return for fair compensation. Monitoring The process of regularly measuring the progress in effectively completing the project activities and in achieving the goal and objectives of the project. Monitoring provides all stakeholders with continuous feedback on implementation. It identifies actual or potential successes and problems as early as possible to facilitate corrections during the Project implementation Project Includes any people, households, firms or private institutions who, on account of Affected Person changes that result from the Project will have their (i) standard of living adversely affected, (ii) right, title, or interest in any house, land (including residential, commercial, agricultural, forest, and/or grazing land), water resources, or any other moveable or fixed assets acquired, possessed, restricted, or otherwise adversely affected, in full or in part, permanently or temporarily; and/or (iii) business, occupation, place of work or residence, or habitat adversely affected, with or without displacement Rehabilitation Rehabilitation measures include re-establishment of incomes, livelihoods, and social systems. Measures include a) restoration of access to public facilities, infrastructure, and services, b) mitigation of the loss of access to cultural sites, public services, water resources, grazing or forest resources through the establishment of access to equivalent or culturally acceptable resources and income-earning opportunities. These measures are determined in consultation with affected communities, even when their rights are not formally recognized in national legislation Relocation Rebuilding of house assets and public infrastructure in another location Resettlement All negative situations directly caused by the Project, including loss of land, Effects property income generation opportunities and cultural assets Resettlement A time-bound action plan with a budget setting out the resettlement strategy, Plan objectives, entitlements, actions, responsibilities and arrangements for monitoring and evaluation. Vulnerable Distinct groups of people who might suffer disproportionately from resettlement Groups effects, including the poor, landless and semi-landless, female-headed, disabled and elderly HH without means of support and those from minority groups.

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Appendix 13

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... 348 I. PROJECT AND SUBPROJECT DESCRIPTION ...... 349 A. The Project ...... 349 B. Kep Solid Waste Management Improvements Subproject ...... 349 II. FIELDWORK AND PUBLIC CONSULTATIONS ...... 352 A. Fieldwork ...... 352 B. Public Consultations ...... 352 III. SCOPE OF LAND ACQUISITION AND INVOLUNTARY RESETTLEMENT ...... 353 A. Impacts on Land ...... 353 B. Impacts on Income and Business ...... 354 C. Other impacts...... 354 IV. INFORMATION DISCLOSURE, PARTICIPATION AND CONSULTATION ...... 354 A. Information Disclosure and Consultation Carried-Out ...... 354 B. Consultation and Information Disclosure during Subproject Implementation ...... 356 C. Post-Project Implementation ...... 357 D. Information Disclosure ...... 357 V. GRIEVANCE REDRESS MECHANISM ...... 357 VI. LEGAL FRAMEWORK, COMPENSATION AND ENTITLEMENT POLICY ...... 358 A. Objectives ...... 358 B. The Legal Basis, Compensation and Entitlements ...... 358 VII. PROJECT PRINCIPLES ...... 359 VIII. INSTITUTIONAL ARRANGEMENTS ...... 362 IX. RESETTLEMENT BUDGET ...... 365 X. INTERNAL MONITORING AND REPORTING ...... 366 A. Community Monitoring ...... 366 B. Internal Monitoring ...... 366 APPENDICES ...... 367 Appendix 1: Provincial Governor’s land assurance letter for Kep Landfill Site ...... 367 Appendix 2: Involuntary Resettlement Screening...... 368 Appendix 3: List of Participants in Public Consultative Meetings ...... 370 Appendix 4: Selected Photos on Consultation Meetings ...... 379 Appendix 5: Selected Photos on the Field-Work with MOT and Local Authorities ...... 380 Appendix 6: Selected Photos on Consultation Meetings ...... 382

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Appendix 13

LIST OF TABLES

Table 1: Components and Current Land Use of the Areas for the Kep Solid Waste Managements Subproject ...... 353 Table 2: Components and Current Land Use of the Areas for the Preah Sihanouk – Koh Rong Passenger Piers Improvements Subproject ...... 353 Table 3: Summary of Public Consultation Meetings with Stakeholders in Kep Town ...... 355 Table 4: Summary of Public Consultation Meetings with Stakeholders in Preah Sihanouk and Koh – Rong Island ...... 356 Table 5: SPS Requirements and Project Policy on Involuntary Resettlement ...... 360

LIST OF FIGURES

Figure 1: Location of Proposed Landfill ...... 350 Figure 2: Boundaries and Areas of Proposed Landfill ...... 350 Figure 3: Location of new pier & facilities on Victory beach in Preah Sihanouk town ...... 351 Figure 4: Location of new pier (black) on Koh Touch beach, Koh Rong Island ...... 352

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Appendix 13

EXECUTIVE SUMMARY

1. Kep Solid Waste Management Improvements and Preah Sihanouk – Koh Rong Passenger Piers Improvements are two subprojects under the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project which will improve urban-rural transport infrastructure and urban environmental services, strengthen capacity to implement regional tourism standards, and strengthen tourism destination management in Cambodia. 2. The Kep Solid Waste Management Improvements subproject will be implemented in the Cambodia’s southern coast and Kep town () which is a popular tourist destination, known for its beach, seafood restaurants and quiet and natural surroundings. The subproject will mainly benefit Kep’s urban core (Sangkat Kep and around half of Sangkat Prey Thom) with a residential population of 9,000 persons. Additionally, there are some of 95 hotels and guesthouses and approximately 52 restaurants and cafes and other commercial outlets, which will benefit from the subproject. The subproject will develop a managed landfill area, which will address the waste disposal needs of in a comprehensive and more sustainable manner. Principle features of the subproject will include: (i) managed and covered landfill with gas capture system; (ii) small materials recovery facility for waste separation; (iii) medical waste treatment area; (iv) septage treatment facility; and (v) waste collection equipment. 3. The Preah Sihanouk – Koh Rong Passenger Piers Improvements subproject will be implemented in Preah Sihanouk town (Preah Sihanouk province). The subproject will construct (i) a new 600 m2 concrete pier with associated facilities at Victory Beach incorporating ticketing/waiting areas, food and beverage service facilities, toilets, and vehicle parking, (ii) a new 750 m2 concrete pier at Koh Touch village, Koh Rong, incorporating ticketing/waiting area facilities, sanitation, tourist information and retail kiosks, and (iii) 850m- long 2m-wide concrete walkway along Koh Touch Beach with drains. The subproject will benefit 38 ferry boat operators, 31 associated business operators, and an expected 438,000 passengers during the first year of operation. 4. Resettlement Due Diligence was conducted for the Kep Solid Waste Management Improvements subprojectin September and December 2017. For the Preah Sihanouk – Koh Rong Passenger Piers subproject, it was carried out in June 2017 and January 2018. Findings of the resettlement due diligence activities show that there is no land acquisition required with private land of individuals or households by the subprojects in the local. The proposed landfill in Kep town will be constructed in the existing dump site area which is on the public land managed by Kep province while the proposed piers at Victory Beach and Koh – Rong Island will be constructed on vacant government-owned land. The subprojects’ construction will not cause any impact on crops, trees, houses and other structures and public assets, nor will is cause any economic displacement. 5. This Resettlement Due Diligence Report has been prepared in consultation with local communities, authorities and concerned agencies.

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I. PROJECT AND SUBPROJECT DESCRIPTION

A. The Project 1. The Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project will improve urban-rural transport infrastructure and urban environmental services, strengthen capacity to implement regional tourism standards, and strengthen tourism destination management in Cambodia. It will help transform secondary towns in the Greater Mekong Subregion (GMS) Economic Corridors into green, inclusive and competitive international tourism nodes to boost trade in services and deepen market linkages between members of the GMS and Association of Southeast Asian Nations (ASEAN). The project will build on the ongoing GMS Tourism Infrastructure for Inclusive Growth Project, implemented in Cambodia, the Lao PDR, and Viet Nam (2014–2019). 2. The expected impact of the project is sustainable, inclusive, and more balanced tourism development, as envisaged in the ASEAN Tourism Strategic Plan 2016 standards, and strengthen tourism destination management in Cambodia, the Lao PDR, Myanmar and Viet Nam. The outputs of the Project include: (i) urban-rural access infrastructure and urban environmental services improved, (ii) capacity to implement ASEAN tourism standards strengthened, and (iii) institutional arrangements for tourism destination management and infrastructure operations and maintenance (O&M) is strengthened. B. Sub-Projects Assessed Kep Solid Waste Management Improvements Subproject 3. Kep province is located on Cambodia’s southern coast and Kep town is a popular tourist destination, known for its beach, seafood restaurants and quiet and natural surroundings. The province received 1.1 million tourists in 2016 and forecasts suggest visitor arrivals could rise to 1.8 million in 2026. 4. A landfill will be constructed as part of the project. The existing arrangements for solid waste management in Kep are inadequate, characterized by low coverage, lack of sanitation awareness, and an open, unsanitary dumpsite. The subproject will address these problems by expanding the quality and coverage of solid waste collection and treatment services, and develop a managed landfill site. 5. The proposed landfill site is in Damnak Chang’aeur village at Sangkat Prey Thum of Keb town. It is an undeveloped rural area, about 4.0 km from Damnak Chang’aeur market, 6.0 km from Sangkat Prey Thum center and approximately 8.0 km north-west of Kep town. An unpaved track links the site to National Road No.33 near Domnak Chong Oeu market. 6. The subproject components include: (i) preparatory earthworks and installation of a perimeter runoff interceptor drainage system; (ii) construction of an impermeable liner, leach- ate collection/treatment system, and a landfill gas recovery system; (iii) construction of a small materials recovery facility for waste separation and recycling; (iv) construction of a medical waste treatment area; (v) construction of a septage treatment facility (0.5 ha); and (vi) construction of site office, toilets, and fencing. The landfill access road (3.0 km) will be paved with concrete (6.0 m carriageway and verges) to accommodate collection trucks and other vehicles. On-site equipment will include 3.0 new 10.0 cubic meter collection trucks, bulldozer, and two vacuum trucks to support septage collection. Sanitation and waste management awareness programs will be supported under output 3 capacity building programs. 7. The subproject will benefit the Kep’s urban core (Sangkat Kep and around half of Sangkat Prey Thum) with a residential population of 9,000 persons. Additionally, there are 95 hotels, and 52 restaurants/cafes, and other commercial outlets which will benefit from the subproject.

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8. Proposed landfill area covers 9.3016 ha of public land, which is the property of Kep provincial government, the subproject owner. The issued Assurance Letter of Provincial Governor of Kep province on Handing-over of the Site to Kep Solid Waste Management Improvements, with legitimate proof of government land ownership, is attached in Appendix 1 of this Report. The location, boundary and area of the proposed landfill are presented in Figures 1 and 2. Figure 1: Location of Proposed Landfill

Figure 2: Boundaries and Areas of Proposed Landfill

Preah Sihanouk – Koh Rong Passenger Piers Improvements 9. Preah Sihanouk Province is in the south-west of Cambodia with Preah Sihanouk town. Preah Sihanouk Province received 2.1 million international and domestic tourists in 2016 and forecasts suggest visitor arrivals could rise to 3.5 million in 2026.

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10. The two passenger piers are located at Victory Beach of Preah Sihanouk; and Koh Touch village, the main gateway to Koh Rong Island. Koh Rong received about 300,000 international and domestic tourists in 2016 and this could increase to more than 470,000 in 2026. Since the introduction of fast ferry services in 2012 the number of trips between Preah Sihanouk and Koh Rong has increased to 7,400 per year (2016) and is expected to reach over 12,000 by 2026. The existing passenger piers in Preah Sihanouk and Koh Touch are inadequately constructed and easily overwhelmed by a surge in passengers during peak periods and lack sanitation and adequate parking. This causes congestion and hazardous conditions for passengers and boat operators. 11. The subproject will construct (i) a new 600 m2 concrete pier with associated facilities at Victory Beach on vacant government-owned land (4,000 m2) that is reserved for this purpose, incorporating ticketing/waiting areas, food and beverage service facilities, toilets, and vehicle parking, (ii) a new 750 m2 concrete pier at Koh Touch village, Koh Rong, incorporating ticketing/waiting area facilities, sanitation, tourist information and retail kiosks, and (iii) 850m-long 2m-wide concrete walkway along Koh Touch Beach with drains. 12. The subproject will benefit 38 ferry boat operators, 31 associated business operators, and an expected 438,000 passengers during the first year of operation. The locations of the new piers are presented in Figures 3 and 4.

Figure 3: Location of new pier & facilities on Victory beach in Preah Sihanouk town

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Figure 4: Location of new pier (black) on Koh Touch beach, Koh Rong Island

13. A due diligence process has been conducted to examine if land acquisition and resettlement are required by the subprojects in line with ADB’s Safeguards Policy Statement (SPS, 2009). This report describes the due diligence activities conducted, the findings obtained and the results on consultations carried-out with local communities, authorities and concerned agencies on the proposed subprojects.

II. FIELDWORK AND PUBLIC CONSULTATIONS

A. Fieldwork 14. Site visits were conducted in September 2017 and December 2017 at three villages in Kep town (Sangkat Kep, Sangkat Prey Thum and Sangkat OuKrasa) and in June 2017 and January 2018 in Preah Sihanouk Town and Koh – Rong Island. 15. Based on the preliminary design of the proposed landfill, concrete piers and walkway, Social Safeguard Consultants together with technical staff of Ministry of Tourism (MOT) and local authorities visited the site to assess if land acquisition and resettlement are required. The locations of the subproject components and the current land use in the areas were checked against land-use maps for the site, as well as verification by field visits. 16. The Involuntarily Resettlement Screening Forms were completed during the fieldwork and is presented in Appendix 2. B. Public Consultations 17. Three consultation meetings were conducted in Kep town (Sangkat Kep, Sangkat Prey Thum and Sangkat OuKrasa) on 5 September 2017 and two consultation meetings were carried out in Preah Sihanouk Town and Koh Rong Island on 17 June 2017 with representatives of the villages in which the subproject components are located. Another round of consultation was also carried-out with other stakeholders including Ministry of Transport (MOT), Ministry of Public Works and Transport (MPWT), Provincial Department of Public Works and Transport (DPWT), Provincial Department of Tourism (DOT), District

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Authority, and residents residing nearby the proposed subproject locations on 8 December 2017. A visit was also made by relevant agencies and local authorities for site review on 16 January 2018. Discussions with the stakeholders helped determine that land acquisition and resettlement are not required and provided opportunities for stakeholders to clarify any concerns related to the subproject. Lists of consulted persons are in Appendix 3.

III. SCOPE OF LAND ACQUISITION AND INVOLUNTARY RESETTLEMENT 18. The Resettlement Due Diligence was conducted based on the subproject’s preliminary design. The proposed landfill will be constructed in the existing dump site area which is on public land owned and by Kep province. For the Preah Sihanouk – Koh Rong Passenger Piers Improvements, the proposed pier at Victory Beach will be constructed on vacant government-owned land that is reserved for this purpose while the proposed pier and walkway at Koh Touch Beach will be constructed on vacant public land owned by Preah Sihanouk province . A. Impacts on Land 19. The proposed landfill site is in Damnak Chang’aeur village consists of 9.3016 ha of public land, which is the property of the provincial government. The subproject will (i) use available public land for the site (landfill); and (ii) use the current Right of Way (RoW) of the existing road to the dump-site to provide all-weather access to the landfill; therefore, neither land nor assets of individuals or households will be affected by the subproject. Table 1 below shows the subproject' components and the current land use in the areas. Table 1: Components and Current Land Use of the Areas for the Kep Solid Waste Management Subproject

MAIN COMPONENTS DESCRIPTION CURRENT LAND USE Access road For transporting the  The current access road to the dumpsite will be collected solid waste to improved (not constructing of a new access road the main landfill to the future landfill)  The current access road is with the reserved RoW (in the public land) that is sufficient to be improved as per the preliminary design. Landfill and Landfill area, materials  Within 9.3016 ha of land owned by Kep Provincial Associated Facilities recovery facility for Government at Damnak Chang’aeur Village, waste separation, Sangkat Prey Thum, KepTown, Kep province (the medical waste treatment existing dump-site area). area, septage treatment facility and others

20. For the Preah Sihanouk – Koh Rong Passenger Piers Improvements, the proposed piers and walkway will be constructed on the public land on the existing beach; therefore, neither land nor assets of individuals or households will be affected by the subproject. Table 2 below shows the subproject' components and the current land use in the areas. Table 2: Components and Current Land Use of the Areas for the Preah Sihanouk – Koh Rong Passenger Piers Improvements Subproject

MAIN COMPONENTS DESCRIPTION CURRENT LAND USE Pier at Victory Beach A new 600 m2 concrete  Within 4,000 m2 of vacant government-owned pier with associated land that is reserved for this purpose facilities: ticketing/waiting areas, food and beverage service facilities, toilets, and vehicle parking Pier at Koh Touch A new 750 m2 concrete  Within the land owned by Provincial Government Village pier incorporating at Koh Touch village, Koh Rong Sangkat.

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MAIN COMPONENTS DESCRIPTION CURRENT LAND USE ticketing/waiting area facilities, sanitation, tourist information and retail kiosks, Walkway 850m-long 2m-wide  Within the land owned by Provincial Government concrete walkway along at Sangkat 3 and Sangkat 4, Koh Rong Island Koh Touch Beach with drains 21. For any temporary site installation or other areas, the contractor(s) will have to propose in a site installation and access plan and obtain approval from the Project Implementation Units (PIUs). There is sufficient public land available for temporary use during construction. It is anticipated that, the temporary impacts on land, if any, will be within the public land that is being managed by the Provincial Government. Temporary impacts on private land of individuals and households, therefore, will not occur. B. Impacts on Income and Business 22. For the Kep Solid Waste Management subproject, there are only three intermittent waste-pickers using the dumpsite. There are not many recyclables because much of the waste is segregated by collectors in town, or by the waste collecting company before transporting it to the dump. Interviews with the waste-pickers show that they will not be affected by the subproject construction as the current dump-site will not be closed until the new facility is constructed and it is not the main place they collect waste to sell. However, during the detail design of the subproject, intensive consultations will be conducted with the waste-pickers to identify opportunities for them to work at the landfill if they are interested. 23. For the Preah Sihanouk – Koh Rong Passenger Piers Improvements subproject, the construction activities of the subproject will not cause any impact on business of households or vendors in the area as there is no business facility on the proposed land for the subproject. C. Other impacts 24. There is no expected impact on crops and trees, houses and other structures, and other private or public assets by the subprojects.

IV. INFORMATION DISCLOSURE, PARTICIPATION AND CONSULTATION A. Information Disclosure and Consultation Carried-Out 25. Information disclosure and consultation activities were carried out as part of the subproject preparation and due diligence discussions. 26. Information that has been provided to the stakeholders includes (i) the subproject's components and the locations of the subproject's components; (ii) entitlements to compensation and assistance if land and assets are affected; (iii) tentative implementation schedule of the subproject; and (iv) the project's grievance redress mechanism. 27. Three consultation meetings were conducted in Kep town (Sangkat Kep, Sangkat Prey Thum and Sangkat OuKrasa) in September 2017. Sixty-five (65) attendants comprising people who reside near, but not within the site, heads of the villages, and representatives of mass-organizations. Consultations were also held in December 2017 at the Department of Tourism of Kep Province with representatives of involved stakeholders including MOT, MPWT, DOT, DPWT, Project Implementing Unit and others. Table 3 summarizes public consultation meetings.

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Table 3: Summary of Public Consultation Meetings with Stakeholders in Kep Town Stakeholders Date Location and Time Discussions comments/suggestions/concer n 05 September Meeting 1  Description of the  The subproject causes no 2017 Venue: Sangkat Prey subproject and impact on land and asset Thum subproject's owned by individuals and Participants: 20 components households as the subproject (Female: 05)  Potential impacts of will be constructed on the public Meeting 2 the landfill and land. Venue: Sangkat Kep access road  During the construction stage, if Participants: 28  Entitlements to there is any land and/or other (Female: 10) compensation, assets affected, the Meeting 3 assistance and compensation at replacement Venue: Sangkat Ou resettlement if the cost will be paid to affected Krasa subproject causes households. Participants : 17 land acquisition and  Any concerns and complaints (Female: 08) resettlement impacts; raised by the local people shall  Grievance redress be addressed in a timely mechanism; manner following the Project's  Indicative Grievance redress mechanism. implementation schedule 08 December Meeting 4  Land ownership of  The proposed landfill area is 2017 Venue: DOT office the proposed landfill 9.3016 ha. It belongs to Kep Participants: 10 area and the RoW of Provincial Government. The (Female: 02) the access road to reserved RoW is also the public the landfill. land owned and managed by Kep Provincial Government. 28. For the Preah Sihanouk – Koh Rong Passenger Piers Improvements, two consultation meetings were conducted in Preah Sihanouk Town and Koh – Rong Island. The meetings were conducted with relevant agencies (Provincial Department of Public Works and Transport, Provincial Department of Tourism, Provincial Cadastral Office and others) on 14 - 15 June 2017, and with local authorities and villagers on 16 - 17 June 2017. Thirty-five (35) attendants comprising villagers, heads of the villages, and representatives of mass- organizations attended in the consultation meeting in the village level. A visit was also made by relevant agencies and local authorities for site review on 16 January 2018. The consultation and the site review results confirmed that there is no land acquisition required by the subproject. The table below summarizes public consultation meetings with Stakeholders in Preah Sihanouk and Koh- Rong Island.

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Table 4: Summary of Public Consultation Meetings with Stakeholders in Preah Sihanouk and Koh – Rong Island Stakeholders Date Location and Time Discussions comments/suggestions/concer n 17 June Meeting 1  Description of the subproject  No land and asset owned by 2017 Participants: 23 and subproject's components individuals and households will (Female: 05)  Potential land acquisition and be acquired or demolished as resettlement impacts the subproject will be  Entitlements to compensation, constructed on the public land assistance and resettlement if which is reserved for this the subproject causes land purpose. acquisition and resettlement  During the construction stage, if impacts; there is any land and/or other  Grievance redress mechanism; assets affected, the  Indicative implementation compensation at replacement schedule cost will be paid to affected households.  Civil works will be conducted during the low tourism season.  Any concerns and complaints raised by the local people shall be addressed in a timely manner following the Project's Grievance redress mechanism.

17 June Meeting 2  Description of the subproject  The proposed pier at Koh 2017 Participants: 12 and subproject's components Touch Beach and walkway will (Female: 02)  Potential land acquisition and be constructed on the public resettlement impacts land.  Entitlements to compensation,  All potential loss or damage to assistance and resettlement if structures and cultural property the subproject causes land will be avoided. acquisition and resettlement  The subproject will include impacts; business support services.  Grievance redress mechanism;  Implementation schedule will be  Indicative implementation consulted with the local schedule authorities and will be publicly announced in the subproject areas.

29. The results of the stakeholder consultations of the subproject in Kep town and Preah Sihanouk Town as well as in Koh-Rong Island show overall positive support for the subprojects. Consulted local authorities, concerned agencies and residents are aware of the benefits that the subprojects would bring to them and to their communities and they completely agreed with the subprojects’ implementation. Concerns raised in the consultation meetings were temporary impacts of the subprojects during the construction phase like noise, dust or traffic disturbance, which are addressed in the environmental management plan. Above all, everyone fully supported the subprojects, hoped waste collection services would improve, and expect the PIUs to closely coordinate with the local authorities. B. Consultation and Information Disclosure during Subproject Implementation 30. Before the commencement date and during the subprojects’ implementation, the PIUs will organize public consultation meetings at the subproject areas and publish the subproject’s Public Information Booklet and post subproject’s information related to such affected Sangkat’s, in public places. Such information will cover the (i) nature of the subprojects, (ii) the subproject components and locations of the components, (iii) the

356 Appendix 13 construction time and schedule, and (iv) the project's grievance mechanisms. The contact details of the site manager and the person(s) in charge of the Contractor representatives will be posted on the subprojects’ information boards at the worksite. 31. If the subprojects have land acquisition and resettlement impacts, the public, especially affected individuals and households, local governments and other target beneficiaries will be consulted and will participate in the preparation and implementation of a resettlement plan (RP). The RP preparation and implementation will be in line with the principles and requirements of ADB's Safeguard Policy Statement (SPS, 2009) and relevant policies of the Royal Government of Cambodia. 32. The consultations with affected persons (APs), if any, will be carried out throughout the subproject cycle, so that AP needs, and preferences can be incorporated into the detailed design and operating arrangements, where practicable. APs will also be encouraged to participate in various RP processes such as detailed measurement survey (DMS), replacement cost survey (RCS), consultations, payment of compensation and delivery of other assistance; and monitoring of impacts and benefits. In these public consultation meetings, the information to be provided to APs includes: (i) descriptions of the project/subprojects; (ii) scope of impacts on land and assets upon land; (iii) policy principles, requirements, eligibility and entitlements; (iv) the implementation schedule of related activities; (v) grievance redress mechanism; and (vi) institutional responsibilities. C. Post-Project Implementation 33. The MOT will inform ADB when the project is completed. As part of the appraisal, all aspects of the subproject such as technical issues, finance, economics, environment, and RP implementation (if any) shall be evaluated if their respective objectives have been met as to their relevance, efficiency, and sustainability. APs will participate in the public consultation meetings and interviews during the project's completion evaluation. D. Information Disclosure 34. Semi-annual safeguards monitoring reports on resettlement, if land acquisition and resettlement occurs, will also be uploaded on the websites. 35. Updating and dissemination of the Resettlement Due Diligence Report is integral to the project’s Stakeholder Communication Strategy designed to support review, updating and dissemination of the Resettlement Due Diligence Report through (i)establishment, and regular consultation with, local focal points in all subproject areas; (ii) community meetings in parallel with detailed infrastructure design; (iii) individual consultations with potential/affected persons (if any); and (iv) joint meetings between officials, potential/affected persons, project staff, and civil society/ mass organizations on matters of resettlement planning, implementation, and monitoring.

V. GRIEVANCE REDRESS MECHANISM 36. Based on the preliminary design, it is not required to establish a Resettlement Compensation Committee. However, to ensure that any questions and complaints from the residents (not only relating to compensation and resettlement, but also other issues of the subproject) are addressed in a timely and satisfactory manner, and that all possible avenues are available to residents to air their grievances, a well-defined grievance redress mechanism will be established. 37. This mechanism will resolve concerns and complaints from affected households in an active and timely manner through an easy-to-understand and clear process that meets the requirements on gender equality and that is appropriate with local cultures and is easily accessed by all the affected residents with no cost and penalty. This mechanism will not cause any obstructions to access to the national judiciary and administrative systems. All expenses related to the grievance will be borne by the project.

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38. The procedures/stages for grievance redress are set out below:  Stage 1: Resident or an affected person will file a letter of complaint/request to the Sangkat/village. The Sangkat/village grievance committee will acknowledge receipt of the complaint and enter this in its logbook. The Sangkat/village grievance committee will convene within 15 days to act and deliberate on the complaint. If after 15 days the aggrieved resident or affected person does not hear from the village/Sangkat grievance committee, or if the resident or affected person is not satisfied with the decision reached in the first stage, the complainant may elevate his/her complaint to the District Authority acting as the Grievance Committee at district level.  Stage 2: The complaint is filed at the District Authority level acting as District Grievance Committee and it is recorded in their logbook to acknowledge its receipt. The District office has 15 days to deliberate and resolve the complaint to the satisfaction of all concerned particularly the complainant. When the complaint is not acted upon after 15 days or if the complainant is dissatisfied with the results, this will be elevated to the Ministry of Tourism.  Stage 3: Upon receipt of the complaint the Ministry of Tourism acting as one body meets with the aggrieved party and acts to resolve the complaint within 30 days. Within 30 days after the filing of the complaint, the Ministry of Tourism must make a written decision the complainant. 39. At any stage in the grievance redress mechanism, the complainant may have the option to elevate the complaint to authorized local courts for litigation following the rules of court. During the litigation of the case, Royal Government of Cambodia will request from the court that the project proceed without disruption while the case is being heard. If any party is dissatisfied with the ruling of the provincial court, that party can elevate the case to a higher court. The Royal Government of Cambodia shall implement the decision of the court. However, the mechanism should not impede access to the country’s jurisdiction or administrative remedies. 40. During subprojects’ implementation stage, contact details of the village and district grievance redress committees and MOT will be posted in the accessible public places and in the subproject areas. If efforts to resolve disputes using the grievance procedures remain unresolved or unsatisfactory, complainants have the right to directly discuss their concerns or problems with the ADB Cambodia Resident Mission (CARM). If APs are still not satisfied with CARM’s response they can directly contact the ADB Office of the Special Project Facilitator1. The Office of the Special Project Facilitator procedure can proceed based on the Accountability Mechanism in parallel with the subproject implementation.

VI. LEGAL FRAMEWORK, COMPENSATION AND ENTITLEMENT POLICY A. Objectives 41. Although the Kep Solid Waste Management Improvements Subproject and the Preah Sihanouk – Koh Rong Passenger Piers Improvements Subproject are categorized C for involuntary resettlement, and preparation of a resettlement plan (RP) is not required; if land acquisition and affected persons are identified during the construction period, an RP for the subprojects will be prepared. Affected persons that will emerge due to changes in the subprojects’ design or alignment prior to or even during construction works will be compensated as per the principles, requirements and provisions of the ADB's Safeguard Policy Statement (SPS, 2009) and relevant policies of the Royal Government of Cambodia. B. The Legal Basis, Compensation and Entitlements

1Complainants can send their concerns to the Office of the Special Project Facilitator using the information at: http://www.adb.org/accountability-mechanism

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42. There are existing laws that govern land acquisition and resettlement in Cambodia. These laws, together with the ADB’s Safeguard Policy Statement (SPS, 2009) shall regulate the land acquisition and compensation of affected households under the project and all the subprojects. 43. The main objectives of ADB’s Policy on involuntary resettlement is to avoid or minimize impacts on people, property, and businesses affected by the acquisition of land, or other impacts of the project/subprojects, including impacts on livelihood and income, that arise from the implementation of the project or subprojects. Where involuntary resettlement is not avoidable, it must be minimized either by exploring project alternatives or by providing specific mitigation to enhance or at least restore the living standards of the affected people to their pre-project levels. 44. ADB’s Policy on Gender and Development (2006) also has a bearing on resettlement. This policy adopts gender mainstreaming as a key strategy for promoting gender equity, and for ensuring that women participate and that their needs are explicitly addressed in the decision-making process. For projects that have the potential to cause substantial gender impacts, a gender plan is prepared to identify strategies to address gender concerns and the involvement of women in the design, implementation, and monitoring of the project. ADB’s Policy on Indigenous Peoples (SPS, 2009) states that the borrower/client will ensure (i) that affected Indigenous Peoples receive culturally appropriate social and economic benefits; and (ii) that when potential adverse impacts on Indigenous Peoples are identified, these will be avoided to the maximum extent possible. Where this avoidance is proven to be impossible, based on meaningful consultation with indigenous communities, the Indigenous Peoples Plan will outline measures to minimize, mitigate, and compensate for the adverse impacts. 45. Other policies of the ADB that have bearing on resettlement planning and implementation are the (i) Public Communications Policy (2011); and (ii) Accountability Mechanism (2012). According to these policies, the PCU is required to proactively share and disclose the subprojects’ information with stakeholders and the public at large. Affected people should have easy access to the subprojects’ information. The grievance redress mechanism, therefore, must be disclosed to the affected people. 46. Together, the ADB Safeguard Policy Statement 2009, Laws of the Royal Government of Cambodia including 1993 Constitution, 2001 Land Law and Expropriation Law on resettlement provide an adequate legal basis to identify the past, present, and future involuntary resettlement impacts and risks, outlining principles, procedures to determine the scope of resettlement planning through a survey and/or census of displaced persons, including a gender analysis, specifically related to resettlement impacts and risks.

VII. PROJECT PRINCIPLES 47. The principles for resettlement policy in the Project are as follows: a. Involuntary resettlement and impacts on land, structures and other fixed assets will be avoided, if not minimized - where possible by exploring all alternative options. b. Compensation will be based on the principle of replacement cost reflecting the current market price and other administrative costs. c. All AHs residing, working, doing business or cultivating land within the recovered area under the project or subprojects as of the cut-of-date are entitled to be provided with rehabilitation measures sufficient to assist them to improve or at least maintain their pre-project living standards, income earning capacity and production levels. d. Meaningful consultation will be carried out with the AHs, indigenous households, affected communities and concerned groups and ensure participation from planning up to implementation. The comments and suggestions of AHs and communities will be considered.

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e. The final draft and any updates on the RP will be disclosed at relevant village/Sangkat offices in after approval from the Government and ADB. f. Resettlement identification, planning and management will ensure that gender concerns are incorporated. g. Provide all affected households requiring relocation with needed assistance including the following; assistance and allowances, secure tenure to the relocated land, and better living conditions at resettlement sites. h. Special measures will be incorporated in the resettlement plan to protect socially and economically vulnerable groups such as indigenous households, households headed by women, children, disabled, the elderly, landless and people living below the generally accepted poverty line. i. Existing cultural and religious practices will be respected and, to the maximum extent possible preserved. j. Culturally appropriate and gender-sensitive social impact assessment and monitoring will be carried out in various stages of the project. k. Adequate resources will be identified and committed during the preparation of the RP which shall include sufficient budgetary support and made available to cover resettlement costs within the agreed implementation period. l. There will be no civil works that shall take place for any segment of the subprojects, until (i) compensation has been fully paid to AHs; (ii) agreed rehabilitation measures are in place (iii) the area is free from all encumbrances. Table 5: SPS Requirements and Project Policy on Involuntary Resettlement Key Issues Government's ADB Policy The Project Policy Legislation (SPS, 2009) Eligibility for Illegal occupants are not Those without titles to land All AHs without any compensation entitled to compensation or any recognizable legal discrimination whether & assistance due to violation on rights to land are eligible for land is owned are eligible does not declared land use plan; resettlement assistance for resettlement assistance include APs or if they have and compensation for loss and compensation for loss without land constructed without of non-land assets. Improve of non-land assets. title. permit or have the standards of living of Focus on improving the encroached on the displaced poor and standards of living of the demarcated land for other vulnerable groups, displaced poor and other ROW. particularly women. vulnerable groups, including women. No The Ministry of All APs, including those All AHs, including those compensation Economics and Finance without titles, or are within without titles to land or any for those (MEF) Prakas is the ROW are eligible for recognizable legal rights to illegally settled consistent with the resettlement assistance land are eligible for on the ROW. position of the 2001 and compensation for loss resettlement assistance Land Law that of non-land based assets. and compensation for loss individuals who have of non-land assets. illegally occupied the Focus on improving the ROW or public standards of living of the properties are not displaced poor and other entitled to any vulnerable groups, compensation or social including women. support, regardless of their being an AP or a member of vulnerable groups. Immoveable Any regime of ownership All affected person shall be All APs, including those

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Key Issues Government's ADB Policy The Project Policy Legislation (SPS, 2009) assets. of immovable property entitled for resettlement without titles, or are within prior to 1979 shall not be assistance and the ROW are eligible for recognized (Article 7). compensation for non-land resettlement assistance based assets. and compensation for loss of non-land assets. Imprisonment Failure to vacate illegally Protection and Sufficient time and notice on failure to occupied land. Those improvement of the quality and resettlement support vacate land who do not vacate of life of APs. given to APs during according to occupied land in a timely transfer, such as schedule. manner are subject to transportation and fines and/or demolition assistance. imprisonment (Article Food allowance during 19). transfer and settlement for a specified period approved by the Inter- Resettlement Committee (IRC). Unregistered Recognizes businesses For non-land assets, all Inclusion of those who are businesses. or economic entities only eligible affected people, economically displaced, if they hold a business whether titled, legitimate, or even those who are not certificate (i.e. excludes non-titled need to be formally registered (e.g. non-registered compensated at unregistered businesses, businesses). replacement cost, through employees without labor cash or replacement contracts). All affected assets. Included among persons will be assisted to these APs are renters of ensure that their income buildings, tenants and sources are restored to at employees of affected least pre-project levels. businesses. Entitlements No specific legislation on ADB policy defines affected APs who will lose 10% or on severity of severity of losses on persons to have more of their productive losses. productive land. experienced severe losses assets (income when they are physically generating) or who will be displaced from housing or physically displaced will be lose 10% or more of their provided with additional productive assets (income assistance. generating). Land The price for land ADB policy requires an An independent land valuation. compensation is independent land appraiser appraiser will be engaged calculated based on the who has working to conduct the prevailing cost of land at knowledge on property replacement cost study the time of land valuation and that the during the DMS for the acquisition which is appraisal methodology subprojects and the results defined by the IRC. Land used is consistent with of the replacement cost payment is usually international standards. study will be used for based on negotiated compensation of the price between land updated RP, to be owner and the approved by the government “willing Government. buyer-willing seller” approach.

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VIII. INSTITUTIONAL ARRANGEMENTS 48. As there is no land acquisition and resettlement identified during the preliminary design stage, MOT (through its PCU) will submit this Resettlement Due Diligence Report to ADB and post it in the accessible public places in the subproject areas and upload the document to the project website. 49. The role and functions of each organization responsible for resettlement planning and implementation are outlined below: a. The Ministry of Tourism (MOT) is the project’s executing agency (EA) and will oversee all project activities. MOT will establish a Project Coordination Unit (PCU) that is responsible for the implementation of the entire subprojects according to the requirements, policies, and guidelines of ADB and the laws of the Government. b. The Kep and Preah Sihanouk Provincial Departments of Tourism (DOTs) will establish a Project Implementation Unit (PIU) comprising staff of the DOT, DPWT and DONRE for each province. The PIUs will have one full time Safeguards Officer to monitor social safeguards compliance through his/her provincial counterpart. The PCU will provide technical assistance to the PIUs as necessary. c. The Project Coordination Unit (PCU) with assistance from PIC will submit quarterly project progress reports to the MOT and ADB. Said progress reports will include discussions on social safeguards monitoring activities and findings. d. Project Implementation Consultants (PIC). The project will engage a national social safeguards specialist to support the PCU in handling resettlement issues. The PIC will work closely with local authorities in developing any required RP through the conduct of the DMS in a participatory and transparent way and consistent with the Project resettlement policy. The PIC will likewise provide capacity-building orientation and skills training, as needed, to concerned personnel of the PCU and the local authorities. 50. If land acquisition and resettlement are required, a resettlement plan will be prepared and implemented. In that case, role and functions of each organization responsible for resettlement planning and implementation will be as below: a) The Ministry of Tourism (MOT): MOT and the PCU will coordinate closely with the IRC-WG on all matters concerning involuntary resettlement, working closely with the General Department of Resettlement of the MEF (GDR-MEF) to prepare, update, and implement the RP. The IRC, technically supported by the GDR-MEF is tasked to approve the allocation, release the resettlement budget as part of government’s local counterpart to the project. MOT’s specific tasks include the following:  Facilitate and ensure the approval of the RP by the IRC as recommended by GDR-MEF;  Facilitate and ensure prior approval by IRC and the ADB of any variations in the approved RP;  Update the RP after the detailed measurement survey/consultation with AHs during actual implementation;  Safeguard and keep the data base of affected persons and assets that will be gathered during the preparation and updating of the RP both in e-copies and hard copies; and  Prepare progress reports on RP implementation for submission to the IRC and ADB. b) Inter-Ministerial Resettlement Committee (IRC): Based on the Prime Minister Decision No. 13, dated 18 March 1997, the Inter-Ministerial Resettlement Committee

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(IRC) was initially organized in 1999 for the ADB Loan 1659-CAM: -Ho Chi Minh City Highway Project. The IRC is a collective entity composed of representatives from different line ministries, such as the Council of Ministers (COM); the Ministry of Public Works and Transport (MPWT); and the Ministry of Agriculture, Forestry and Fisheries (MAFF). It includes representatives from the affected Municipalities and the Governor and Deputy Governor of provinces with subprojects. The IRC has emerged as the decision- making body on resettlement issues and has since been involved in other foreign-assisted government infrastructure projects with involuntary resettlement. The Ministry of Economy and Finance (MEF) is the permanent Chair of the IRC and represents it for every project financed by development partners. The IRC shall assume the function of a quasi-regulatory body, ensuring that funds for resettlement are judiciously spent and that the RP is implemented as planned. The technical arm of the IRC is the GDR-MEF, tasked to assist the IRC in carrying out the following:  Review and approve the RP, ensuring that the RP is consistent with ADB’s 2009 Safeguard Policy Statement and later, the loan/project agreement;  Endorsing the approved RP to ADB for the issuance of a “no objection” to the updated RP;  Establishing or convening the Provincial Sub-Resettlement Committee and its Working Group;  Securing the resettlement budget from the national treasury and ensuring that funds are available and downloaded in a timely manner and in sufficient amounts;  Approval of all disbursements related with the implementation of the RP, such as payment of compensation to affected assets and other entitlements, management and operational expenses of personnel, etc.;  Ensuring that funds for resettlement are spent judiciously and in a transparent manner; and  With assistance from the project implementation consultant which will assume function as internal monitor in behalf of the PCU and the IRC, monitoring the implementation of the RP, ensuring that this is carried out in compliance with the project resettlement policy outlined in the approved RP, and in compliance with the loan covenant /project agreement. c) Provincial Resettlement Sub-Committee (PRSC): The PRSC is a collegial body at the provincial level headed by the Provincial Governor or Deputy Governor. The members of the PRSC are provincial department directors of line ministries represented in the IRC, and the chiefs of the districts and communes. The technical arm of the PRSC is the Working Group (PRSC-WG). The PRSC-WG is headed by the Chief or Deputy Chief of the Provincial Cabinet, with a Director (or a representative) of the Provincial Department of Tourism (MOT), the Department of Public Works and Transport (DPWT) and the Department of Natural Resources and Environment (DONRE) as members. The PRSC-WG has a counterpart at the district level comprised of personnel from various line agencies as well as village/Sangkat chiefs. The PRSC, through the provincial and district working groups are responsible for the following functions:  Facilitate public information dissemination campaigns, ensuring that the public, especially the AHs, are updated on any developments regarding the project and resettlement activities;  Participate in the DMS and updating of the census of AHs, including updating of entitlements;

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 Facilitate the preparation of a coordinated schedule for the release and downloading of budget for compensation and other entitlements, the actual dismantling of affected structures, and the start of civil works in a section of the subproject areas;  Spearhead the timely and smooth payment of compensation and other entitlements to the AHs/business owners/operators;  Receive and act on the complaints and grievances of AHs in accordance with the project resettlement policy; and the approved RP’s grievance and redress mechanism; and  Maintain documentation/records of all public meetings, grievances, and actions taken to address complaints and grievances. d) Kep town, Preah Sihanouk town and Sangkat/village where the subprojects are located will coordinate and work closely with the provincial resettlement sub- committee and as the need for such with IRC through GDR-MEF during RP implementation. Their roles and responsibilities include:  Identify and coordinate the venue for the public consultation with AHs during the DMS and other resettlement-related activities;  Conduct discussions with AHs/ business owners/operators during the negotiation and compensation process of affected structures;  Monitor the entry of new business establishments in the area and indicate the names of the owners/operators in a registration format; and  Inform all existing business establishment owners/operators as well as new business owners to refrain from building new structures in the areas where there will be improvement/construction. e) Project Implementation Consultant (PIC): An international and a national social safeguards specialist (3 months of the international specialist and 10 months for the national specialist on an intermittent basis) will be hired to support the PCU and the PIUs in updating the RP and in performing internal monitoring of RP implementation in behalf of the PCU and the PIUs for all subprojects under the project. The resettlement consultants will have at least 5 years of experience in planning and implementation of resettlement plans in the Greater Mekong Subregion (GMS), particularly in Cambodia; and assist in capacity development of the national, provincial and local staffs/implementers responsible for updating, implementation, and internal monitoring of the RP. Specific tasks include:  Assist MOT in updating the RP and provide needed technical support to facilitate its approval and subsequent implementation and monitoring;  Ensure MOT and other line agencies’ compliance with due diligence requirements in implementing the RP;  Design and actual facilitation of capacity development activities for all project management/implementers on ADB’s social safeguards policies particularly on involuntary resettlement, environment and indigenous people’s development; also includes gender mainstreaming of all women’s concerns in the project implementation cycle as well as how to facilitate information campaigns and other activities with project beneficiaries;  Assist the PCU and PIUs in concept-building of an effective approach to information dissemination to project beneficiaries on the project, its progress and on community and beneficiary participation;

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 Provide technical assistance in the development and production of Information materials using as context the local situation in project area;  Backstop the PIUs and local authorities in the actual conduct of the information campaigns, public consultation, and community participation on the social safeguards;  Coordinate the detailed measurement survey (DMS)/community consultations, incorporating information from the infrastructure detailed design to update the list of affected persons;  Verify the calculations of compensation during the RP updating, based on the DMS/ community consultations, conducted by the IRC-WG and PRSC-WG, in relation to the provisions of the RP entitlement matrix;  Participate and monitor compensation payments to AHs and advise the IRC-WG and PRSC-WG of any actions needed to ensure compensation is paid in full and in a timely manner;  Ensure that grievances are addressed promptly and properly, and that the grievance redress mechanism is functioning well;  Provide periodic training on grievance redress procedures;  Establish and implement liaison mechanisms to ensure proper technical and logistical support to PIUs, local administrative authorities, resettlement committees and concerned government departments;  Establish and implement procedures for internal monitoring;  Train PIUs and PCU assigned social safeguards focal persons to carry out internal monitoring and reporting of the RP implementation;  Review the survey materials and methods that will be used to complete the detailed measurement survey during detailed design, and recommend improvements as may be required;  Coordinate with IRC-WG and PRSC-WG in implementing the RP;  Together with members of the IRC-WG, brief officials at all levels on the content and procedures for implementing the RP and if necessary, provide suggestions to improve procedures for the coordination of resettlement and compensation; and  Prepare semi-annual status reports and periodic spot checks on the implementation of RP, to be submitted to IRC and ADB through the PIUs and PCU.

IX. RESETTLEMENT BUDGET 51. No resettlement budget needs to be prepared for Kep Solid Waste Management Improvements subproject and Preah Sihanouk–Koh Rong Passenger Piers Improvements subproject as there is no land acquisition and resettlement. However, if any land acquisition or affected persons are found as result of changes in design of the subprojects (detailed design) or resettlement impacts identified during the construction period, a resettlement plan (RP) will be prepared based on the principles and requirements of the ADB's Safeguard Policy Statement (SPS, 2009) and relevant policies of the Royal Government of Cambodia. The RP will include a resettlement budget calculated based on (i) the DMS; (ii) costs for carrying-out consultations with the affected households; (iii) cost for conducting of replacement cost study; (iv)the compensation, assistance and relocation costs to the affected persons/households; (v) administrative cost; and (vi) contingency (10% of direct costs). The RP will include the breakdown for each type of losses with corresponding replacement cost

365 Appendix 13 estimates reflecting prevailing market values. The RP will also include detailed schedule and procedures related to flow of funds for resettlement. 52. All costs for resettlement, including compensation for affected assets, allowances, and livelihood and income restoration activities; operation and administration costs; surveys; monitoring; and reporting, will be financed by the Executing Agency (MOT) as counterpart fund. Procedures for funds disbursement to APs will follow the accounting rules and regulations of Royal Government of Cambodia.

X. INTERNAL MONITORING AND REPORTING 53. The following internal monitoring process and reporting mechanisms will apply should any land acquisition and resettlement impacts be identified during subsequent stages of the subprojects’ implementation. A. Community Monitoring 54. Community-based monitoring (CBM) is a form of public oversight, ideally driven by local information needs and community values, to increase the accountability and quality of social services or to contribute to the management of ecological resources. Within the CBM framework, members of a community affected by a social program, land acquisition and resettlement, or environmental change generate demands, suggestions, critiques, and data that they then feedback to the organization implementing the program or managing the subproject. 55. People in the subproject areas are encouraged to monitor the implementation of the RP, especially the affected people by comparing what they received with what are stated in the RP. B. Internal Monitoring 56. Internal monitoring will serve to evaluate (i) compliance with the project’s social safeguards policies and procedures, including resettlement; (ii) timely availability of personnel, material, and financial resources and efficient use of these to implement land acquisition and resettlement activities; and, (iii) identification of problems, if any, and development of remedial actions to address these. 57. The PCU, with support of the PIC - will develop internal monitoring indicators, procedures and reporting requirements for all subproject components that involve resettlement and will report on resettlement implementation as part of quarterly project progress reports submitted to MOT and ADB. 58. Internal monitoring indicators will include:  Compensation and entitlements computed at rates and procedures as provided in the RP agreed between the Royal of Cambodia and ADB;  Timely and complete disbursement of compensation to AHs in accordance with the agreed RPs and as per agreement with Project authorities;  Timely and complete delivery of relocation, income restoration and rehabilitation allowances and measures;  Public information, public consultation, and grievance redress procedures are followed as described in the approved RP;  Attention is given to the priorities of AHs regarding the options offered; public facilities and infrastructure affected by the subprojects are restored promptly; and,  The transition between resettlement, if any, and civil works is smooth (i.e. completion of resettlement activities required before the award of civil works contracts)

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APPENDICES Appendix 1: Provincial Governor’s land assurance letter for Kep Landfill Site

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Appendix 2:Involuntary Resettlement Screening

KEP TOWN SOLID WASTE MANAGEMENT IMPROVEMENTS IMPACTS ON LAND AND OTHER ASSETS AND RELATED FACILITIES/SERVICES GENERAL ASPECTS YES NO EXPLANATIONS Requirement of land acquisition x Sites of land acquisition x Required sites are governmental land. Alignment of access road will be on existing Easement utilized within existing RoW x road ROW (also public land). Roads surfaces will not be widened No land acquisition is confirmed by MOT, Permanent land acquisition x local authorities and people residing in the subproject's area. If necessary for construction, then contractors to arrange. However, it is unlikely Temporary land acquisition x because the available public land in the area is available and constructors can use it Will transfer only from Government to Change of ownership of land x Government (from the Provincial Government to the Project - MOT) Change of usage of land x

LOSS OF ASSETS YES NO DESCRIPTION Loss of residential land x No land affected Loss of agricultural land x No primary or secondary private structures Loss of residential structures x affected. Loss of productive structures x In the public RoW there is no structure, tree Loss of trees /crops x and crop will be lost. EFFECTS ON COMMUNAL/PUBLIC FACILITIES YES NO DESCRIPTION Loss of access to facilities x Loss of access to services x Construction will be within the existing dump- Loss of community assets/ties x site Loss of cultural / historical properties x IMPACTS OF PEOPLE PHYSICAL DISPLACEMENT YES NO EXPLANATIONS Replacement of houses x

Relocation of households x ECONOMIC DISPLACEMENT YES NO EXPLANATIONS Loss of incomes x There are three intermittent waste-pickers. Loss of businesses/enterprises x They will not lose income or access to collect Loss of access to income sources x recyclables at landfill. Loss of access to natural resources x AFFECTED HOUSEHOLDS / PEOPLE YES NO CASES AND NUMBERS Number of AH/AP x Vulnerable AH/AP x None Severely AH/AP x Non-owning AHs (users of assets) x FINDINGS Category Categorization Not applied by the A Feasibility Study subproject √ B Design and Tendering No land acquisition and C Design, Construct and Install √ resettlement impact Conclusion: There is no land acquisition and resettlement impact by the Subproject Note: The listed items are in accordance with checklists as defined by ADB guidelines Abbreviation AP = affected person(s); AH = affected households; MOT – Ministry of Tourism

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PREAH SIHANOUK–KOH RONG PASSENGER PIERS IMPROVEMENTS IMPACTS ON LAND AND OTHER ASSETS AND RELATED FACILITIES/SERVICES GENERAL ASPECTS YES NO EXPLANATIONS Requirement of land acquisition x Sites of land acquisition x Required sites are governmental land.

Easement utilized within existing RoW x

No land acquisition is confirmed by MOT, Permanent land acquisition x local authorities and people residing in the subproject's area. If necessary for construction, then contractors to arrange. However, it is unlikely Temporary land acquisition x because the available public land in the area is available and constructors can use it Will transfer only from Government to Change of ownership of land x Government (from the Provincial Government to the Project - MOT) Change of usage of land x LOSS OF ASSETS YES NO DESCRIPTION Loss of residential land x No land affected Loss of agricultural land x No primary or secondary private structures Loss of residential structures x affected. Loss of productive structures x In the public RoW there is no structure, tree Loss of trees /crops x and crop will be lost. EFFECTS ON COMMUNAL/PUBLIC FACILITIES YES NO DESCRIPTION Loss of access to facilities x Construction will be within the vacant Loss of access to services x government-owned land that is reserved for Loss of community assets/ties x the subproject. Loss of cultural / historical properties x IMPACTS OF PEOPLE PHYSICAL DISPLACEMENT YES NO EXPLANATIONS Replacement of houses x

Relocation of households x ECONOMIC DISPLACEMENT YES NO EXPLANATIONS Loss of incomes x Loss of businesses/enterprises x

Loss of access to income sources x Loss of access to natural resources x AFFECTED HOUSEHOLDS / PEOPLE YES NO CASES AND NUMBERS Number of AH/AP x Vulnerable AH/AP x None Severely AH/AP x Non-owning AHs (users of assets) x FINDINGS Category Categorization Not applied by the A Feasibility Study subproject √ B Design and Tendering No land acquisition and C Design, Construct and Install √ resettlement impact Conclusion: There is no land acquisition and resettlement impact by the Subproject Note: The listed items are in accordance with checklists as defined by ADB guidelines Abbreviation AP = affected person(s); AH = affected households; MOT – Ministry of Tourism

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Appendix 3: List of Participants in Public Consultative Meetings Kep Solid Waste Management Improvements Subproject

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Preah Sihanouk–Koh Rong Passenger Piers Improvements Subproject

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Appendix 4: Selected Photos on Consultation Meetings

PHOTO 1-3 PUBLIC CONSULTATION MEETING PPTA AND STAKEHOLDERS

PHOTO 4 PHOTO 5 PHOTO 6 PUBLIC CONSULTATION MEETING PUBLIC CONSULTATION MEETING PUBLIC CONSULTATION MEETING VENUE: SANGKAT PREY THUM VENUE: SANGKAT KEP VENUE: SANGKAT O KRASAR

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Appendix 5: Selected Photos on the Field-Work with MOT and Local Authorities

Location: Dannak Cnag’aeur Village, Sangkat Prey Thum Date: 07 December 2017

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Location: Victory Beach,Vacant Pier Site and Koh-Rong Island Vacant Pier Site Date: 18 January 2018

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Appendix 6: Selected Photos on Consultation Meetings

Place: Department of Tourism in Kep town Date: 08 December 2017

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Appendix 14: Risk Assessment and Risk Management Plan

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 14

RISK ASSESSMENT AND RISK MANAGEMENT PLAN

Risk Description Ranking Mitigation Measures Responsibilities Technical Consulting firms engaged for detailed engineering S Detailed TORs developed during project preparation require PCUs and ADB design, safeguards, and construction supervision quality and cost-based selection method with full technical perform poorly. proposals weighted 90:10 technical-financial. Infrastructure design and specifications are not M Conventional engineering designs have been adopted. Detailed PCUs and PIUs appropriate in terms of contractor’s capabilities, design employs engineers familiar with the envisaged works, site materials availability, and site conditions. conditions, quality standards and construction supervision. Improper construction methods and equipment M Bidding documents will require (i) evidence of satisfactory past PCUs and PIUs supply will cause delays and increase costs. performance in similar conditions; (ii) adequate physical plant; (iii) adequate financial capacity of contractors; and (iv) adequate contingencies for unforeseen items. ADB’s standard ICB bidding documents and procedures will be used. Private enterprises are not interested in achieving M National tourism organizations will strengthen policy measures MOT and MICT ASEAN tourism standards. and marketing incentives to promote standards adoption. Industry associations are invited to participate in ASEAN and GMS tourism working group meetings. Economic and Financial Counterpart funding shortfalls. M ADB will finance all project costs except for the expected minor ADB, PCUs and PIUs land acquisition and resettlement, counterpart salaries, and some recurrent project management costs. Implementation delays reduce the project’s M ADB and project executing agencies approved advance actions for ADB and PCUs economic benefits. consultant recruitment. ADB supporting advance procurement for three infrastructure subprojects with trust fund cofinancing. Lower than expected tourist arrivals and spending M Project sites were selected based on robust demand analysis. PCUs, PIUs and undermines economic and financial viability. Destination marketing support is included in the project design. industry associations Institutional Arrangements Governments reverse supportive policies for travel L Project and government support for regular multisector ministerial- MOT and MICT and tourism. level regional and national project steering committee meetings and the Mekong Tourism Forum. Governments and other development partners M ADB and GMS Governments continue to hold the annual GMS ADB, GMS reduce support for tourism vocational training and Development Partners Forum alongside the GMS Ministerial Governments capacity building. Conference and triennial GMS Summit.

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Risk Description Ranking Mitigation Measures Responsibilities Ambiguities in the roles and responsibilities of the L The composition and responsibilities of the PCU and PIUs are PCUs and PIUs PCUs and PIUs. clearly defined and agreed in the PAM. National steering committees to provide guidance on project implementation matters and resolve any issues. Insufficient public funds allocated for infrastructure S O&M plans with sustainable finance mechanisms will be prepared PCUs and PIUs O&M and tourism site management. with capacity building and training programs provided for entities and staff responsible for O&M. Government will not appoint full-time qualified men L Job descriptions with minimum qualifications are in the PAMs. PCUs and PIUs and women staff to manage PCUs and PIUs. Female participation targets are agreed in the Gender Action Plan and project covenants. Weak coordination reduces the effectiveness of M The GMS TWG Development Coordination Task Force meets GMS TWG, PCUs and subregional activities. twice annually to coordinate joint planning and implementation. PIUs Financial Management and Procurement Inaccurate cost estimates may prevent delivery of M The project has (i) used conservative cost estimates, (ii) will follow PCUs and PIUs envisaged outputs. ADB procurement regulations, and (iii) has included price and physical contingencies to cover unforeseen events. PIUs lack experience with ADB financial M Training in financial management procedures acceptable to the PCUs and PIUs management and procurement regulations will ADB and the Government will be provided for PCU and all PIU cause project implementation delays. staff. Consultants will be embedded in the PCU and PIU offices to provide on-job training in financial management and procurement. Qualified counterparts are unavailable to support S Consultants will provide accounting, disbursement, financial PCUs and PIUs financial management, procurement, and management, procurement, and safeguards training following ADB safeguards implementation, particularly in PIUs. guidelines. Potential corruption from weak procurement and M Standard ADB bidding documents and prior review procedures will PCUs and PIUs financial management oversight. be used. Grievance redress procedures will be published on the project website. ADB reviews advance account management and limits statement of expenditure payments to $100,000. Gender The gender action plan is not implemented L Executing and implementing agencies have appointed PCUs and PIUs experienced gender focal points experience that are familiar with ADB and government gender equity policies. Adequate project resources are earmarked to implement the gender action plan. Social and Environmental Safeguards Delayed safeguards document updating and M Resettlement specialists will be recruited to assist the PCU and PCUs and PIUs PIUs update and monitor safeguards documents. Expected

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Risk Description Ranking Mitigation Measures Responsibilities implementation delays civil works construction. resettlement impacts are minor. Increased tourist volumes overwhelm S Environmental management plans cover construction and PCUs and PIUs infrastructure and environmental services causing operation phases. Site-specific O&M plans will incorporate visitor negative environmental impacts. management and environmental safeguard measures. Government and the private sector do not L Infrastructure design considers climate risk and vulnerability. PCUs and PIUs implement climate change adaptation and Climate resilience measures and climate financing will be mitigation measures. reviewed and updated during civil works detailed design. Overall M H = high, S = substantial, M = moderate, L = low. ADB = Asian Development Bank; ASEAN = Association of Southeast Asian Nations; GMS = Greater Mekong Subregion; ICB = international competitive bidding; Lao PDR = Lao People’s Democratic Republic, MICT = Ministry of Information, Culture and Tourism, Lao PDR; MOT = Ministry of Tourism, Cambodia; O&M = operations and maintenance; PAM = project administration manual; PCU = project coordination unit; PIU = project implementation unit; TOR = terms of reference; TWG = Tourism Working Group. Source: Asian Development Bank.

386 Appendix 15: Project Procurement Risk Assessment Report

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 15

TABLE OF CONTENTS

EXECUTIVE SUMMARY 389 I. INTRODUCTION 389 II. OVERVIEW OF THE NATIONAL PROCUREMENT ENVIRONMENT 390 III. PROJECT PROCUREMENT RISK ASSESSMENT 391 A. Overview 391 1. Organization and Staff Capacity 391 2. Information Management 392 3. Procurement Practices 392 a. Goods and works 392 b. Consulting services 392 c. Payments 393 4. Effectiveness 393 5. Accountability Measures 393 B. Strengths 394 C. Weaknesses 394 D. Procurement Risk Assessment and Management Plan (P-RAMP) 394 IV. PROCUREMENT PLAN 395 V. CONCLUSION 395 ANNEX A: COMPLETED PROCUREMENT RISK ASSESSMENT QUESTIONNAIRE (PROJECT) 396 ANNEX B: DRAFT PROJECT PROCUREMENT PLAN 404

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EXECUTIVE SUMMARY

ES1. Overall assessment. ADB’s Country and Sector/Agency Procurement Risk Assessment for Cambodia (2015) assessed the procurement risk at country level as moderate. Although the Ministry of Tourism (MICT)’s Tourism Investment Department (TID), the executing agency of the proposed project, has significant experience with ADB project procurement, the project procurement risk assessment found weaknesses related to organization and staff capacity, information management, and procurement practices, posing procurement risks that require mitigation and management. This has led to the pre-mitigation project procurement risk to be assessed as moderate. Post-mitigation risk is assessed as low.

ES1. Summary of weaknesses and risks identified. In terms of TID’s organizational and staff capacity: (i) MOT procurement review committees (PRC) lack independence, impairing impartiality, transparency and objectivity in control of contract award procedures; (ii) lack of experience with ADB project procurement by Preah Sihanouk Province Department of Tourism, one of the proposed implementing agencies; and (iii) TID staff not having job descriptions outlining their specific roles in procurement. Regarding information management, space limitations at TID may in the future prevent proper storage of procurement related documents, hampering audits. Concerning TID’s procurement practices: (i) lack of TID in-house capacity to carry out the additional procurement required under the project could cause procurement delays; (ii) challenges with recruiting qualified consultant firms due to difficulty in confirming firms’ past performance.

ES3. Summary of mitigation/management measures adopted. Mitigation measures for risks related to organization staff and capacity include: (i) ensuring representation of Ministry of Economy and Finance on procurement committees, and preventing overlap between members of the PRC and the bid and consultant evaluation committees; (ii) limit procurement by PIUs to shopping only; and (iii) providing job descriptions to TID staff involved in procurement, based on the government’s procurement manual and the project administration manual, outlining roles, responsibilities and minimum qualifications related to procurement. In terms of information management, the project can support the expansion of storage capacity for procurement documents as needed. Mitigation measures related to procurement practices include: (i) recruitment of experienced international and national procurement specialists to enhance capacity of PCU and PIUs regarding the preparation of bidding documents and requests for proposals, and manage the procurement process; and (ii) advance actions to recruit individual international and national procurement specialists, to be mobilized immediately upon project effectiveness. These consultants will help TID recruit the implementation support consulting firm and additional individual consultants, who will in turn provide procurement transaction support and on-the-job procurement training for EA staff and procurement committee members.

I. INTRODUCTION

1. This Project Procurement Risk Assessment Report was prepared by project preparation technical assistance (PPTA) TA 9090 – Second GMS Tourism Infrastructure for Inclusive Growth Project in Cambodia (the project) following ADB’s Guide on Assessing Procurement Risks and Determining Project Procurement Classification (August 2015).

2. The project will help transform secondary GMS central and southern corridor towns into economically inclusive, competitive international tourism destinations by improving road and water transport infrastructure, urban environmental services, and capacity to sustainably manage tourism growth. The project has three outputs: (i) urban-rural access infrastructure

389 Appendix 15 and urban environmental services improved; (ii) capacity to implement ASEAN tourism standards strengthened; and (iii) institutional arrangements for tourism destination management and infrastructure O&M strengthened. Project areas in Cambodia for outputs 1 and 3 include Kep and Preah Sihanouk provinces, and for output 2 Kampot, Kep, Koh Kong and Preah Sihanouk, all located along the GMS Southern Economic Corridor.

3. The executing agency (EA) is the Ministry of Tourism (MOT), which will establish (i) a Phnom Penh-based Project Coordination Unit (PCU) within its Tourism Investment Department (TID) to handle overall project coordination and management, (ii) a tourism Project Management Unit (PMU) in MOTs Tourism Investment Department (TID) to lead ASEAN Tourism Standards implementation and capacity building for destination management and O&M (outputs 2 and 3), and (iii) an infrastructure PMU in the Ministry of Public Works and Transport (MPWT), General Department of Public Works to lead output 1 infrastructure subprojects. The implementing agencies are Kep and Preah Sihanouk Provincial Departments of Tourism (DOT), which will establish multisector Project Implementation Units (PIUs) with infrastructure and tourism teams.

4. The project’s procurement risk assessment was undertaken from 12 January to 15 February 2018. Preparation activities included reviewing relevant laws, regulations and guidelines, interviews with EA counterparts regarding procurement experience and completion of the Project Procurement Risk Assessment Questionnaire (Annex A).

II. OVERVIEW OF THE NATIONAL PROCUREMENT ENVIRONMENT

5. Cambodia has developed a harmonized regulatory framework for all externally financed projects and programs, combining its own policies and procedures with those of ADB (and its other development partners including the World Bank) to produce the Standard Operating Procedures for All Externally Financed Projects/Program. The framework uses three manuals: Manual on Standard Operating Procedures for All Externally Assisted Projects (SOP); Procurement Manual for All Externally Financed Projects/Programs (SOP/PM); and, Financial Management Manual for All Externally Financed Projects/Programs (SOP/FMM). They were first prepared in 2004 with ADB and WB support, and updated during 2010-12, in parallel with development of the Law on Public Procurement (promulgated in 2012). The SOP, SOP/PM and SOP/FMM provide very clear procedures for the whole project cycle from identification to completion. The SOP/PM aligns with ADB procurement policies and procedures and contains standard bidding documents for NCB and Shopping, in English, endorsed by ADB.

6. A pilot Country and Sector/Agency Procurement Risk Assessment (PRA) for Cambodia was conducted between late September 2014 and early March 2015, and focused on four sectors – Agriculture & Natural Resources, Energy, Transport, and Water & Other Municipal Infrastructure. Its main findings are summarized below.

7. The PRA found that at the national level, the only omission from the regulatory framework is a procurement professionalization program, and weaknesses generally relate to lack of staff understanding of, and compliance with, some aspects of the SOP, including procurement tracking and record keeping. Issues identified in the PRA at sector and agency levels were similar. This led the PRA to assess the country and sector procurement risks as moderate. As mitigation, the PRA recommends: (i) provide more and better focused training on operationalizing the SOP through mentoring rather than classroom style training, and extend the training to members of bid evaluation and procurement review committees; and (ii) support the Government to establish a procurement professionalization program by twinning a local seat of learning with an internationally recognized center of excellence in public procurement. While no specific assessment was done for the tourism sector, considering the proposed project involves primarily transport and municipal infrastructure

390 Appendix 15 subprojects, the assessment of the transport and municipal infrastructure sectors are relevant.

8. The e-procurement review found some executing agencies have websites and advertise procurement opportunities, there is no public e-procurement system. Knowledge of e-procurement is low among EA/IA procurement practitioners in the sectors assessed.

III. PROJECT PROCUREMENT RISK ASSESSMENT

A. Overview

1. Organization and Staff Capacity

9. MOT does not have a permanent procurement committee. Instead it uses ad hoc procurement review committees (PRC) for international competitive bidding (ICB) and national competitive bidding (NCB) procurement and recruitment of consulting services. Minor procurement review committees, for works contracts up to $100,000 and goods and consulting service packages up to $50,000, are chaired by the project manager. General review committees, for work contracts from $100,000-$3 million and goods and consulting service packages valued $50,000-$1 million, are chaired by the project director. Major review committees for procurement valued higher than that are chaired by the head of the executing agency, in accordance with section 9.2 of the SOP/PM. MOT’s Procurement Unit (PU) performs the function of PRC secretariat. The lack of independence of the procurement review committee poses a moderate procurement risk. However, this is partially mitigated by the fact that evaluation of bids for works and goods are carried out by bid evaluation committees (BEC) and of proposals for consulting services by consultant evaluation committees (CEC), whose reports are submitted to the PRC for review and approval, in accordance with sections 9.4 and 9.5 of the SOP/PM. Members of the BEC and CEC cannot also serve on the PRC, and oversight is provided by the Ministry of Finance (MEF)’s General Department of International Cooperation and Debt Management through representation on the PRC.

10. PU staff have limited experience with externally financed projects. Many TID staff, on the contrary, have over 15 years of experience with ADB procurement through their involvement in the ongoing GMS Tourism Infrastructure for Inclusive Growth Project (TIIGP) and previous ADB-financed projects.1 They are familiar with the SOP, SOP/PM and SOP/FMM, ADB procurement rules and regulations, and harmonized bidding documents for goods and works procured by NCB and shopping, and ADB ICB bidding documents. They have also previously participated in financial management and procurement training organized by ADB Cambodia Resident Mission and training organized within the framework of ADB-financed projects. Most have high level of English language proficiency. The number of staff and facilities are considered adequate to take on the planned procurement.

11. Experienced staff will be appointed to the PCU/PMUs responsible for all ICB and NCB procurement of goods and works, and the recruitment of consulting services, as well as other procurement of goods and services related to centrally coordinated activities under outputs 2 and 3, using shopping. PIUs will be responsible for province-specific procurement of goods and services related to outputs 2 and 3, using shopping. This follows the same arrangement successfully used in the ongoing TIIGP, which also has a PIU in Kep Province, and what has been used in previous ADB-financed tourism projects in Cambodia. The Preah Sihanouk Province DOT does not have experience with previous ADB-financed tourism projects, posing a procurement risk. This is mitigated by limiting involvement of PIUs in

1 GMS Mekong Tourism Development Project 2003–2010 (Siem Reap, Rattanak Kiri and Stung Treng); Improving Market Access for the Poor in Central Cambodia, 2011–2015 (Kampong Thom)

391 Appendix 15 procurement to shopping. The project will provide procurement and financial management training for all PIU staff.

12. While MOT procurement unit staff have job-descriptions outlining their specific roles in procurement and minimum requirements, TID staff involved in procurement do not. This poses a moderate risk that will be mitigated by using job descriptions outlining their roles and responsibilities related to procurement, and minimum qualifications, as provided in the SOP/PM Section 8.4 and the Project Administration Manual (PAM).

13. Procurement specifications, bidding documents, terms of reference for consulting services and requests for proposals for procurement in the framework of ADB-financed projects are normally prepared by TID with assistance from project start-up and implementation consultants.

2. Information Management

14. The general assessment made in the PRA regarding poor procurement record keeping does not accurately reflect the situation at TID. TID has a functioning procurement record keeping system. TID has developed and improved the system over 15 years, during which they have handled procurement under ADB and other externally financed projects. Procurement related documents, including bids and proposals, advertisements, contract files, and invoices are kept for a minimum of seven years. However, files retained from previous and ongoing projects are filling available space, and the procurement related documents that will be produced by the project may exceed TID’s storage capacity. This risk is assessed as moderate and can be easily mitigated by providing expanded, secure storage space in MOT.

3. Procurement Practices

a. Goods and works

15. As mentioned above, TID has extensive experience with procurement of goods and works related to foreign assistance. Most recent experience includes procurement of works with a total value of around $10 million for the ongoing TIIGP (2014-2019). Generally, procurement processes have been relatively smooth, and follow the government’s and development partner’s rules and regulations without major issues. However, TID reported delays with recent procurement of one ICB and one NCB works package. TID identified the lack of an international procurement specialist and insufficient person-month allocation for the national procurement specialist to assist with preparation of bidding documents and other aspects of the procurement process as main factor for the delays. Delays due to procurement capacity constraints in TID pose a moderate procurement risk.

b. Consulting services

16. As mentioned above, TID has extensive experience with procurement of consulting services, mainly using quality and cost-based selection (QCBS) for firms and individual consultant selection (ICS) for individual consultants. Recent experience includes procurement of a QCBS package of $1.3 million as part of the ongoing TIIGP. No major challenges were encountered during the procurement process. However, TID identified difficulty in verifying the consultant firm’s past performance a challenge. The selected firm’s performance has been less than satisfactory at times. This poses a moderate procurement risk.

17. TID has experience with advance action for consultant recruitment. Start-up assistance provided as part of the project preparation technical assistance (PPTA) for the TIIGP, and

392 Appendix 15 support from financial and procurement consultants mobilized immediately after project effectiveness, have significantly expedited the recruitment and mobilization of the project implementation consultant firm and individual consultants.

c. Payments

18. ADB standard bidding documents (SBD) specify a period for payment of 28 days, and payments are normally paid within 14-21 days, provided supporting documents that are the basis for payment are in order. ADB ICB SBD and SOP/PM NCB bidding documents make provision for interest for late payment, but this is normally not invoked. Provisions and penalties for late payment in favor of a consultant/firm are included in consultant contracts. Individual consultants and firms can lodge claims for late payment based on penalty rates specified in consulting contracts. To date this has not been tested as payments have been made on time.

4. Effectiveness

19. The general assessment made in the PRA regarding poor procurement tracking does not accurately reflect the situation at TID. TID tracks procurement of externally financed projects using procurement monitoring and tracking forms (PMTF), of which templates are included in SOP/PM Annex I.d. Quarterly submission of PMTFs to MEF and the development partner is mandatory, as per SOP/PM Section 12.3.

20. Complaints resolution mechanisms are described in Section 4.6 of the SOP/PM, and ADB’s SBDs. Moreover, the proposed project will develop and publish a grievance redress mechanism. The grievance redress mechanism will include instructions on how to report suspected procurement related cases of corruption and collusion. Section 4.6 of the SOP/PM also describes a non-judicial mechanism for dealing with complaints, and ADB SBDs provide for the appointment of an Adjudicator and an Arbitrator, and describes the process for dealing with complaints.

5. Accountability Measures

21. A Declaration on Ethical Conduct and Fraud and Corruption (Annex II.a of SOP/PM) will be attached to each evaluation report and signed by each member of the BEC, CEC, and PRC, as applicable, and Bidders, suppliers, contractors and consultants are required to complete a Declaration on Ethical Conduct and Fraud and Corruption (Annex II.b of SOP/PM) and submit it with their bid or proposal. All involved in procurement activities covered by SOP/PM must comply with the Code of Business Ethics included in the SOP/PM Section 4.8. Moreover, ADB’s SBDs have provisions to act on fraud and corruption, which are also outlined in the Loan Agreement and PAM. Standard anticorruption provisions are included in all contract documents. In past and ongoing ADB-financed projects, annual external project audits review procurement and payments, and audit reports are reviewed by ADB and made public. It is proposed to use the same procedure for the proposed project.

22. Procurement decisions are attributable to individuals on the committees. CEC, BEC and PRC reports are signed and endorsed by all participants, and kept on file at TID. The Chairman of the CEC and BEC takes full responsibility for the conduct of evaluation, selection and recommending first ranked consultants/contractors. Annual project audits review procurement processes and payments. Audit reports are reviewed by ADB and made public. It is proposed to use the same procedure for the proposed project.

393 Appendix 15

B. Strengths

23. Cambodia has a robust harmonized regulatory framework, SOP and manuals for all externally financed and projects and programs. TID, which will form a PCU for the proposed Project, and one of the two PIUs, have experience with procurement under ADB-financed projects. TID, with over 15 years of experience with ADB project procurement, will initiate and manage all the planned ICB and NCB procurement of goods and works. They are familiar with government and ADB procurement rules, regulations and processes, the use of the SOPs, manuals, harmonized NCB bidding documents and ADB SBDs, evaluation of bids and proposals, contract management and record keeping.

C. Weaknesses

24. Weaknesses in the project procurement arrangements, described in section A above, are summarized below:

(i) Organizational and staff capacity: a. Lack of independence of ad-hoc procurement committees; b. Lack of experience with procurement under ADB-financed projects by Preah Sihanouk Province DOT; c. Lack of procurement staff with formal procurement qualifications; (ii) Information management: a. Insufficient space at TID for recordkeeping; (iii) Procurement practices: a. Procurement capacity constraints in TID; b. Challenges in recruitment of quality consultant firms; (iv) Effectiveness: a. None identified. (v) Accountability measures a. None identified.

D. Procurement Risk Assessment and Management Plan (P-RAMP)

25. Based on the weaknesses identified in section C, Table 1 identifies and analyses the project’s procurement risks and proposed mitigation measures.

Table 1: Procurement Risk Assessment and Management Plan (P-RAMP) Risk Description Risk Assessment Mitigation Measures Organizational and staff capacity Lack of independence of MOT Impact: Low Representation on the PRCs by MEF-DIC, and no overlap procurement committees Likelihood: Unlikely between members of the PRC and the BEC-CEC, per impair impartiality, Risk: Low Section 9.2 of the SOP/PM, will be monitored by ADB. transparency and objectivity in control of contract award procedures. Lack of experience with Impact: Low PIU’s involvement in procurement will be limited to procurement under ADB- Likelihood: Likely shopping and procurement and financial management financed projects by Preah Risk: Moderate training will also be provided. Sihanouk Province DOT. TID staff do not have job Impact: High TID staff involved in procurement will be provided with descriptions outlining their Likelihood: Unlikely copies of SOP/PM Section 8.4 which provides detailed specific roles in procurement. Risk: Substantial terms of reference outlining the duties and responsibilities of project staff (PCU/PIU) involved in procurement, and the job descriptions outlining roles, responsibilities and minimum requirements related to procurement included in the PAM. Information management

394 Appendix 15

Risk Description Risk Assessment Mitigation Measures TID is unable to properly store Impact: High TID will identify additional record keeping space and the procurement related Likelihood: Likely project will procure filing cabinets for this purpose. documents due to space Risk: Moderate limitations, hampering audits. Procurement practices TID lacks in-house capacity to Impact: High The project will recruit experienced international and carry out the additional Likelihood: Likely national procurement specialists to support and build the procurement required under Risk: High capacity of PCU and PIUs regarding the preparation of the project, causing delays in bidding documents and requests for proposals, and help the procurement process. manage the procurement process. TID has difficulty in verifying Impact: Low Start-up assistance, combined with international and consultant firm’s past Likelihood: Likely national procurement specialists to be mobilized performance. Risk: Moderate immediately upon project effectiveness, will support TID with the recruitment of a qualified consulting firm and additional individual consultants. Effectiveness n/a Accountability measures n/a

Overall Pre-mitigation Post-mitigation Risk: Moderate Risk: Low BEC = bid evaluation committee; CEC = consultant evaluation committee; DIC = General Department of International Cooperation and Debt Management; DOT = Department of Tourism; MEF = Ministry of Economy and Finance; MOT = Ministry of Tourism; n/a = not applicable; PAM = project administration manual; PCU = project coordination unit; PIU = project implementation unit; PM = procurement manual; PMTF = project monitoring and tracking form; PRC = procurement review committee; SOP = standard operating protocol; TID = Tourism Investment Department. Source: PPTA consultants.

IV. PROCUREMENT PLAN

26. The draft procurement plan for the Project is included in Annex B.

V. CONCLUSION

27. The PRA assessed the procurement risk at country level as moderate. Although TID has significant experience with ADB project procurement, the project procurement risk assessment found many weaknesses related to organization and staff capacity, information management, and procurement practices, posing procurement risks that require mitigation and management. This has led to the pre-mitigation project procurement risk to be also assessed as moderate (Table 1). The recommended mitigation measures are start-up assistance as part of the PPTA; engagement of individual international and national procurement and financial management specialists to be mobilized immediately after project effectiveness; consultants will support and provide on-the-job training to help TID and the implementing agencies with procurement and contract administration; and project management capacity building, particularly regarding strict compliance with the SOP/PM, and monitoring PRC, BEC and CEC membership will significantly reduce procurement risks. With these measures the post-mitigation project procurement risk is assessed as low.

Annexes: A. Completed Procurement Risk Assessment Questionnaire (Project) B. Draft Project Procurement Plan

395 Appendix 15

ANNEX A: COMPLETED PROCUREMENT RISK ASSESSMENT QUESTIONNAIRE (PROJECT)

QUESTION RESPONSE RISK A. ORGANIZATIONAL AND STAFF CAPACITY PROCUREMENT DEPARTMENT/UNIT A.1 Does the agency or Government have a No. The Ministry of Tourism (MOT) has established the Moderate Procurement Committee that is mechanisms for public procurement and externally independent from the head of the agency? financed procurement, in line with the harmonized regulatory framework for all externally financed projects and programs developed with ADB and World Bank support. MOT will appoint ad-hoc Procurement Review Committees (Minor, chaired by project manager, General, chaired by project director and/or Major, chaired by head of EA, as appropriate, hereinafter referred to as PRC), with participation of MOT and Ministry of Economy and Finance (MEF)’s General Department of International Cooperation and Debt Management (DIC), in accordance with Section 9.2 of MEF’s Procurement Manual for All Externally Financed Projects/Programs in Cambodia (May 2012) (SOP/PM). A.2 Does the agency have a procurement MOT has a dedicated Procurement Unit (PU) primarily Low department/unit, including a permanent handling MOT government financed procurement, which office that performs the function of a functions as the secretariat of the PRC. The PU was Secretariat of the Procurement Committee? established around two years ago, replacing the Procurement Office under MOT’s Department of Accounting and Finance. A.3 If yes, what type of procurement does it MOT’s PU staff work full time on MOT’s government Low undertake? approved procurement plans. Procurement activities are confined to MOT’s current year government funded procurement plan. A.4 How many years’ experience does the head The PU director has been in this position for over 15 Low of the procurement department/unit have in years (formerly as director of the Procurement Office). a direct procurement role? Prior to this he has over 5 years’ experience in a direct procurement role. A.5 How many staff in the procurement Procurement Unit: 6 staff Low department/unit are: Full time: 6 staff i. full time Part time: nil ii. part time Seconded: nil iii. seconded A.6 Do the procurement staff have a high level of Yes, the PU director reads and writes English well. The Low English language proficiency (verbal and remainder of the PU staff has limited English language written)? skills. TID staff managing procurement have a high level of English language proficiency. A.7 Are the number and qualifications of the staff PU staff have limited experience or exposure in sufficient to undertake the additional externally financed projects. The Tourism Investment Low procurement that will be required under the Department (TID) is currently the only department within proposed project? MOT with suitable experience to undertake ADB procurement, with assistance from consultants. TID has experience with procurement under ADB-financed projects, including the GMS Mekong Tourism Development Project (MTDP, 2003-2010), ADB-JFPR financed Improving Market Access for the Poor in Central Cambodia project (IMAPCC, 2011-2014) and the ongoing TIIGP (2015-2019). Number and qualifications of staff are adequate. A.8 Does the unit have adequate facilities, such TID have adequate IT, office equipment and facilities to Low as PCs, internet connection, photocopy handle the planned procurement, and the proposed facilities, printers etc. to undertake the project will update IT equipment as needed. planned procurement? A.9 Does the agency have, or have ready access Relevant TID staff regularly participates in financial Low to, a procurement training program? management and procurement training organized by

396 Appendix 15

QUESTION RESPONSE RISK ADB Cambodia Resident Mission and training organized within the framework of ADB and World Bank Group- financed projects. A.10 At what level does the department/unit report The PU Director reports to the PRC. Low (to the head of agency, deputy etc.)? The TID director reports to the Director General of the General Directorate of Tourism Development and International Cooperation. A.11 Do the procurement positions in the agency Yes, for PU staff. TID staff do not yet have specific job Moderate have job descriptions, which outline specific descriptions outlining their role in procurement. roles, minimum technical requirements and However, TID staff that will manage project procurement career routes? have job descriptions outlining their roles and minimum technical requirements related to procurement in the SOP/PM and PAM. A.12 Is there a procurement process manual for For MOT government procurement, the PU uses the Low goods and works? MEF’s Guidelines for National Procurement.

For procurement in the framework of externally financed projects, TID uses MEF’s SOP/PM, covering procurement of goods, works and services. In addition, ADB’s Procurement Policy (2017) and Procurement Regulations for ADB Borrowers (2017) are used for ADB-financed projects.

MEF’s Standard Operating Procedures for All Externally Financed Projects/Programs in Cambodia (May 2012) (SOP), and Financial Management Manual for All Externally Financed Projects/Programs (SOP/FMM) provide further guidance.

MEF’s draft Public Private Partnership Procurement (PPP) Manual (January 2016), once final, may provide guidance for PPP procurement during project implementation. A.13 If there is a manual, is it up to date and does Yes. The manuals, which cover procurement of goods, Low it cover foreign-assisted projects? works and services under externally financed projects, were updated in 2012 (see A.12). In addition, the recently updated ADB Procurement Policy (2017) and Procurement Regulations for ADB Borrowers (2017) will be used for the proposed project. A.14 Is there a procurement process manual for Yes, see A.12. Low consulting services? A.15 If there is a manual, is it up to date and does Yes, see A.13. Low it cover foreign-assisted projects? PROJECT MANAGEMENT UNIT A.16 Is there a fully (or almost fully) staffed PMU There is a fully staffed PCU at TID managing the for this project currently in place? ongoing TIIGP and it is proposed to retain, and expand Low as necessary, this PCU for the proposed TIIGP2. A.17 Are the number and qualifications of the staff TID has extensive experience (over 15 years) with sufficient to undertake the additional project procurement. The current PCU Project Director Moderate procurement that will be required under the and Project Manager have held these positions proposed project? throughout the past and ongoing ADB-financed tourism projects (MTDP, IMAPCC, and the ongoing TIIGP) where they have successfully managed procurement of numerous ICB and NCB works and goods contracts and recruited consulting firms (QCBS and CQS) and individual consultants. Current PCU staff will be retained for the proposed project. However, TID staff does not have formal procurement credentials. A.18 Does the unit have adequate facilities, such The current PCU at TID is fully equipped with IT and Low as PCs, internet connection, photocopy office equipment. The proposed project includes facilities, printers etc. to undertake the provisions to update IT equipment as required.

397 Appendix 15

QUESTION RESPONSE RISK planned procurement? A.19 Are there standard documents in use, such MEF’s SOP/PM contains standard harmonized bidding as Standard Procurement documents for NCB and shopping for goods and works, Low Documents/Forms, and have they been and procurement related forms and templates, which are approved for use on ADB funded projects? approved for use on ADB funded projects.

ADB standard bidding documents are used for ICB project procurement of goods and works. A.20 Does the agency follow the national Yes. See A.12 and A.19. TID uses standard harmonized procurement law, procurement processes, bidding documents, approved by ADB, for goods and Low and guidelines? works procured by NCB, which are consistent with the national legislation. Otherwise, TID follows ADB’s requirements and checks for consistency with the national legislation. Where government procurement regulations and guidelines differ from ADB’s, ADB guidelines are followed. A.21 Do ToRs for consulting services follow a Yes. ToRs under the ongoing TIIGP were Low standard format such as background, tasks, developed in conjunction with ADB and are inputs, objectives and outputs? detailed in the PAM. ToRs for the project have been similarly developed and follow the required format, and are detailed in the PAM. A.22 Who drafts the procurement specifications? For MOT government procurement, the PU drafts the Low specifications.

For procurement under ADB financed projects, TID drafts the specifications, assisted by the project implementation consultants. All ICB and the first NCB contracts are prior reviewed by ADB. A.23 Who approves the procurement For government procurement by the PU, the PRC Low specifications approves specifications.

For ADB-financed projects, TID Project Director, following a recommendation ADB. A.24 Who in the PMU has experience in drafting Project Director and Project Manager have experience Low bidding documents? working with project implementation consultants on the drafting of bidding documents for all procurement methods. A.25 Are records of the sale of bidding documents Yes. Low immediately available? A.26 Who identifies the need for consulting For MOT government financed projects, PU identifies Low services requirements? the requirements. For ADB-financed projects, TID identifies the needs for consulting services, in consultation with ADB. A.27 Who drafts the Terms of Reference (ToR) For MOT government financed projects, PU drafts the Low TORs For ADB-financed projects, TID prepares TORs, assisted by project startup consultants and project implementation consultants. A.28 Who prepares the request for proposals For MOT government financed projects, PU prepares Low (RFPs) RFPs. For ADB-financed projects, TID prepares RFPs, assisted by project startup consultants and project implementation consultants. B. INFORMATION MANAGEMENT B.1 Is there a referencing system for Yes. TID maintains a filing system for the ongoing Low procurement files? TIIGP, which will be continued under the proposed TIIGP2. B.2 Are there adequate resources allocated to TID allocates adequate space and staff to the record keeping infrastructure, which includes maintenance of its records. However, files retained from Moderate the record keeping system, space, previous and ongoing projects are filling available space. equipment and personnel to administer the For the proposed project, TID will identify additional

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QUESTION RESPONSE RISK procurement records management functions record keeping space and the project will procure filing within the agency? cabinets for this purpose. B.3 Does the agency adhere to a document Yes, documents are retained for a minimum of seven Low retention policy (i.e. for what period are years. records kept)? B.4 Are copies of bids or proposals retained with Yes. Low the evaluation? B.5 Are copies of the original advertisements Yes. Low retained with the pre- contract papers? B.6 Is there a single contract file with a copy of Yes. All contract files including correspondence are Low the contract and all subsequent contractual retained. correspondence? B.7 Are copies of invoices included with the Yes, the comprehensive contact files include all invoices Low contract papers? and payment records. B.8 Is the agency’s record keeping function Yes. TID uses a Microsoft Office platform. Low supported by IT? C. PROCUREMENT PRACTICES Goods and Works C.1 Has the agency undertaken procurement of Yes. TID has undertaken procurement of goods and Low goods or works related to foreign assistance works (about $10 million) for the ongoing TIIGP (2014- recently (last 12 months or last 36 months)? 2019). If yes, indicate the names of the development partner/s and project/s. C.2 If the answer is yes, what were the major Preparation of ICB works bidding documents were Moderate challenges faced by the agency? delayed due to capacity constraints in TID, which could have been mitigated by an international procurement specialist. C.3 Is there a systematic process to identify For the PU, through the national budget. Low procurement requirements (for a period of one year or more)? For externally financed projects, through procurement plans. In past and ongoing projects, working within the framework of the PAM (implementation schedule, financing plan, cost estimates and the procurement plan) and the annual budget plan (government contributions), procurement activities are reviewed and approved for each year of operation. This will continue under the proposed project. C.4 Is there a minimum period for the For ADB-financed projects this is based on ADB and Low preparation of bids and if yes, how long? Government guidelines, harmonized in the SOP/PM. Generally, no less than 45 days (non-complex small works as will be procured under the project) for ICB and 30 days for NCB from the date of invitation for bidding. C.5 Are all queries from bidders replied to in Yes, as per ADB procurement guidelines Low writing? C.6 Does the bidding document state the date Yes. Clearly. Low and time of bid opening? C.7 Are bids opened in public? Yes, in presence of bidders and the PRC. Low C.8 Can late bids be accepted? No. Low C.9 Can bids (except late bids) be rejected at bid No. Low opening? C.10 Are minutes of the bid opening taken? Yes. And signed by those present. Low C.11 Are bidders provided a copy of the minutes Yes, within two working days after the opening. Minutes Low are provided to all attendees, as well as bidders or consultants who either purchased or were issued the bid document (even if they did not submit a bid or proposal) but did not attend the opening. C.12 Are the minutes provided free of charge? Yes. Low C.13 Who undertakes the evaluation of bids The ad hoc project Bid Evaluation Committee (BEC) Low

399 Appendix 15

QUESTION RESPONSE RISK (individual(s), permanent committee, ad-hoc assisted by project consultants. The BEC is responsible committee)? for the evaluation of bids, the preparation of the Bid Evaluation Reports (BER) and recommendation for the award of contract for goods and works. C.14 What are the qualifications of the evaluators Evaluators on the BEC comprise a mix of procurement Low with respect to procurement and the goods specialists, including engineers (if works/specialized and/or works under evaluation? equipment) and/or persons knowledgeable about the goods procured. C.15 Is the decision of the evaluators final or is No. The BEC submit the BER to the PRC to review and Low the evaluation subject to additional approve. The BER is then submitted to ADB for approval approvals? on a no-objection basis. C.16 Using the three ‘worst-case’ examples in the The first NCB works package procured under the Moderate last year, how long from the issuance of the ongoing TIIGP (Kep Crab Market) took two months from invitation for bids can the contract be invitation for bids to contract award. TID identifies awarded? insufficient person-months allocated to the national financial management and procurement specialist as the main problem. C.17 Are there processes in place for the Yes, but no importation is foreseen under the proposed Low collection and clearance of cargo through project. Vehicles will be procured through local ports of entry? dealerships. C.18 Are there established goods receiving Yes, depending on the contract conditions. Low procedures? C.19 Are all goods that are received recorded as Yes. Goods are recorded as inventory by the executing Low assets or inventory in a register? and implementing agencies following acceptance of the goods. A moveable assets register is maintained and audited. C.20 Is the agency/procurement department TID is familiar with bank guarantees Low familiar with letters of credit? and performance securities, but not letters of credit per se. The MEF deals with LCs on behalf of executing agencies (EA). C.21 Does the procurement department register The implementing agencies track all warranty and Low and track warranty and latent defects liability defects liability periods. In the case of civil works, periods? retention is held until the end of the defects liability period. Consulting Services C.22 Has the agency undertaken foreign- assisted Yes, for the ongoing TIIGP (2014-2019). This includes a Low procurement of consulting services recently QCBS package of $1.3 million. (last 12 months, or last 36 months)? (If yes, please indicate the names of the development partner/s and the Project/s.) C.23 If the above answer is yes, what were the Difficulty in verifying the consultant firm’s past Moderate major challenges? performance and eventually some poor performance. C.24 Are assignments and invitations for Yes, as required by the national legislation Low expressions of interest (EOIs) advertised? and ADB’s Guidelines, invitations for EOIs are advertised in major newspapers and on ADB website. Sufficient details of the assignments are available in advertisements and through the ADB website. C.25 Is a consultants’ selection committee formed Yes, ad-hoc Consultant Evaluation Committees (CEC) Low with appropriate individuals, and what is its are established in line with SOP/PM, with MOT and MEF composition (if any)? representatives. C.26 What criteria are used to evaluate EOIs? Generally, criteria used include technical Low skills/knowledge, experience in similar assignments and academic qualifications, in line with ADB guidelines. C.27 Historically, what is the most common Quality and cost-based selection (QCBS) for firms and Low method used (QCBS, QBS, etc.) to select individual consultant selection (ICS) for individual consultants? consultants. C.28 Do firms have to pay for the RFP document? No, no charge is levied. Low C.29 Does the proposal evaluation criteria follow a Yes, a pre-determined structure and evaluation criteria pre-determined structure and is it detailed in is detailed in the RFP to provide clarity. Low

400 Appendix 15

QUESTION RESPONSE RISK the RFP? C.30 Are pre-proposal visits and meetings Yes, pre-proposal visits are arranged, and prospective Low arranged? bidders invited to attend. C.31 Are minutes prepared and circulated after Yes. Low pre-proposal meetings? C.32 To whom are the minutes distributed? To all shortlisted firms. Low C.33 Are all queries from consultants Yes. Queries accepted in writing, and responses copied answered/addressed in writing? to all shortlisted firms, up until published deadlines. Low C.34 Are the technical and financial proposals Yes. Low required to be in separate envelopes and remain sealed until the technical evaluation is completed? C.35 Are proposal securities required? No, unless required by development partner. Low C.36 Are technical proposals opened in public? Yes, in presence of the bidders and PRC Low representatives. C.37 Are minutes of the technical opening No, submitted only to ADB. However, they are contained Low distributed? in the CEC Evaluation Reports. C.39 Who determines the final technical ranking The CEC undertakes the detailed evaluation for the Low and how? review against TOR requirements (scoring and narrative), and consideration of the PRC. Recommendation is reviewed by ADB under submission 2. C.40 Are the technical scores sent to all firms? Yes. Low

C.41 Are the financial proposal opened in public? Yes, in presence of the bidders and PRC Low representatives. C.42 Are minutes of the financial opening Yes, within two working days after the opening. Post- Low distributed? contract award briefings given upon request. C.43 How is the financial evaluation completed? CEC undertakes the evaluation with technical support Low from consultants. It checks for arithmetic accuracy and compliance with requirements, and, for the case of QCBS, the technical and financial scores are aggregated, for the final review and consideration of the PRC. C.44 Are face to face contract negotiations held? Yes, contract negotiations are done face-to-face Low

C.45 How long after financial evaluation is If advance action for recruitment is used, contract Low negotiation held with the selected firm? negotiations with the first-ranked firm and individual consultants will start once ADB’s Board of Directors approves the project and when financing agreement effectivity is imminent. For recruitment during project implementation, negotiation is typically held within two weeks, but only after ADB “no objection” has been received. C.46 What is the usual basis for negotiation? Clarification of experts’ qualifications and inputs and Low confirm availability, counterpart facilities, out-of-pocket expenses and logistical arrangements for field work. C.47 Are minutes of negotiation taken and Yes. Minutes of negotiations are taken and signed by Low signed? the chair of the PRC and provided to the selected firm and ADB. C.48 How long after negotiation is the contract If advance action for recruitment is used, signing of the Low signed, on average? contract will take place after the financing agreement becomes effective. For recruitment that is started during implementation, contracts are typically signed within two weeks after satisfactory negotiation. C.49 Is there an evaluation system for measuring Yes, both time and output based against TORs. Low the outputs of consultants? Performance reports provided to ADB quarterly. Payments

401 Appendix 15

QUESTION RESPONSE RISK C.50 Are advance payments made? Yes. Section 18.8 of SOP/PM specifies secured Low advance payments up to 15% of contract value are permitted. In practice, advance payments range from 10-15%, specified in the bidding documents/RFPs. However, the amount for the mobilization of consultants is usually 5-10% of contract value to mitigate risk of consultants’ non-performance. C.51 What is the standard period for payment ADB’s SBDs specify no less than 28 days Low included in contracts? after certification. C.52 On average, how long is it between receiving Payments made from the advance accounts and direct Low a firm’s invoice and making payment? payments are generally made within 14-21 days, provided supporting documents that are the basis for payment are in order. C.53 When late payment is made, are the ADB’s ICB standard bidding documents and SOP/PM Low beneficiaries paid interest? NCB bidding document for goods and works make provision for interest for late payment, but this is normally not invoked. Provisions and penalties for late payment in favor of a consultant/firm are included in consultant contracts. Consultants and firms can lodge claims for late payment based on penalty rates specified in consulting contracts. To date this has not been tested as payments have been made on time. D. EFFECTIVENESS D.1 Is contractual performance systematically Yes, by EAs, Implementing Agencies (IAs). Project Low monitored and reported? implementation consultants assist with monitoring works contracts, and consulting services are monitored through timesheets, progress reports and workplans. D.2 Does the agency monitor and track its Yes, accurately through project accounting systems. Low contractual payment obligations? D.3 Is a complaints resolution mechanism Yes, SOP/PM Section 4.6 describes the Complaint Low described in national procurement Handling Mechanism (CHM). documents? D.4 Is there a formal non-judicial mechanism for Yes, as described in the CHM in SOP/PM Section 4.6. Low dealing with complaints? D.5 Are procurement decisions and disputes Yes. Accurately in case of court action or disputes arise Low supported by written narratives such as out of contract negotiations or breaches by either party. minutes of evaluation, minutes of negotiation, notices of default/withheld payment? E. ACCOUNTABILITY MEASURES E.1 Is there a standard statement of ethics and Yes. A Declaration on Ethical Conduct and Fraud and Low are those involved in procurement required Corruption (Annex II.a of SOP/PM) will be attached to to formally commit to it? each evaluation report and signed by each member of the BEC, CEC, and PRC, as applicable. Bidders, suppliers, contractors and consultants are required to complete the Declaration on Ethical Conduct and Fraud and Corruption (Annex II b of SOP/PM) and submit it with their bid or proposal. All involved in procurement activities covered by SOP/PM must comply with the Code of Business Ethics included in the SOP/PM. ADB’s SBDs have provisions to act on fraud and corruption. Also outlined in the Loan Agreement and PAM. E.2 Are those involved with procurement Yes. All those involved in procurement are Low required to declare any potential conflict of required to declare any potential conflicts of interest and remove themselves from the interest and remove themselves from the procurement process? process, as outlined in Section 4.7 of SP/PM. This is also required under ADB’s procurement regulations/SBDs.

402 Appendix 15

QUESTION RESPONSE RISK E.3 Is the commencement of procurement For MOT government procurement there is no Low dependent on external approvals (formal or requirement for approval outside the budgeting process. de-facto) that are outside of the budgeting process? For ADB-financed projects, the approved procurement plan specifies prior or post evaluation and approval, in accordance with ADB procurement regulations. All ICB and the first NCB contracts are prior reviewed by ADB. E.4 Who approves procurement transactions, The delegation of authority in respect to the authority of Low and do they have procurement experience procurement decisions will be issued by a Prakas from and qualifications? MOT at the beginning of the project. Generally, the PRC approves contracts, following recommendations from CEC and BEC and ADB prior or post approval on a no-objection basis, as appropriate. The Project Director signs PRC approved contracts and approves transactions, in accordance with SOP/PM. This has proven to be very reliable under the current project. The process will continue under the Project. E.5 Which of the following actions require approvals outside the procurement unit or the evaluation committee, as the case may be, and who grants the approval? a) Bidding document, invitation to pre- PRC and ADB Low qualify or RFP b) Advertisement of an invitation for bids, ADB Low pre-qualification or call for EOIs c) Evaluation reports PRC and ADB Low d) Notice of award ADB Low e) Invitation to consultants to negotiate ADB Low f) Contracts PRC and ADB Low E.6 Is the same official responsible for: (i) No. The responsibilities are divided between the project Low authorizing procurement transactions, director, procurement officer, accountant, cashier, and procurement invitations, documents, office manager. evaluations and contracts; (ii) authorizing payments; (iii) recording procurement transactions and events; and (iv) the custody of assets? E.7 Is there a written auditable trail of Yes. CEC, BEC and PRC reports are signed and Low procurement decisions attributable to endorsed by all participants, and kept on file at TID. The individuals and committees? Chairman of the CEC and BEC takes full responsibility for the conduct of evaluation, selection and recommending first ranked consultants/contractors. Annual project audits review procurement processes and payments. Audit reports are reviewed by ADB and made public. It is proposed to use the same procedure for the proposed project.

403 Appendix 15

ANNEX B: DRAFT PROJECT PROCUREMENT PLAN

Basic Data Project Name: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project Project Number: 49387-002 Approval Number: TBD Country: Cambodia Executing Agency: Ministry of Tourism Project Financing Amount: $30.89 million Implementing Agency: Ministry of Tourism/Departments ADB Financing: $30.00 million of Tourism of Kep and Preah Sihanouk Provinces Non-ADB Financing: $0.89 million Date of First Procurement Plan: 24 January Date of this Procurement Plan: 24 January 2018 2018

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

1. Procurement and Consulting Methods and Thresholds

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

Procurement of Goods and Works Method Threshold Comments International Competitive Bidding (ICB) for Works $3,000,000 and above International Competitive Bidding for Goods $500,000 and above National Competitive Bidding (NCB) for Works Beneath that stated for ICB, Works National Competitive Bidding for Goods Beneath that stated for ICB, Goods Shopping for Works Below $100,000 Shopping for Goods Below $100,000

Consulting Services Method Comments Quality and Cost Based Selection (QCBS) Individual Consultant Selection (ICS)

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

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

Procure- Review Bidding Advertise- Package General Estimated ment (Prior / Proce- ment Date Comments Number Description Value2 Method Post) dure (quarter/year) Works TIIGP2-CAM- Preah $7,306,200 ICB Prior 1S1E Q1/2020 No W01 Sihanouk prequalification; Seaside No domestic Access and preference; Environmental Small works Improvements bidding documents TIIGP2-CAM- Kep Landfill $6,292,000 ICB Prior 1S1E Q2/2019 No W03 Improvements prequalification; No domestic preference; Small works bidding documents

2 Inclusive of taxes and duties. 404 Appendix 15

1S1E = single stage-one envelope; ICB = international competitive bidding; Q = quarter. 3. Consulting Services Contracts Estimated to Cost $100,000 or More

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

Recruit- Review Advertise- Package General Estimated Type of ment (Prior / ment Date Comments Number Description Value3 Proposal Method Post) (quarter/year) Firms TIIGP2- Project Management $1,515,512 QCBS Prior Q3/2018 FTP International CAM-C01 and Civil and National. Engineering Support Total 156 p-m 80:20 Quality- Cost Ratio Individual Consultants Institutional Capacity Building Support TIIGP2- International $403,601 ICS Prior Q3/2018 EOI+CV International CAM-C02 Tourism 28 p-m Specialist/Co-Team Leader TIIGP2- National Tourism $133,520 ICS Prior Q3/2018 EOI+CV National CAM-C05 Specialist / Deputy 36 p-m Team Leader CV = Curriculum Vitae; EOI = Expression of Interest; ICS = individual consultant selection; p-m = person-months; Q = quarter; QCBS = quality and cost-based selection.

4. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000 (Smaller Value Contracts)

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

Goods and Works Adver- Number Procure- Review Bidding tisement Package General Estimated of ment (Prior / Proce- Date Comments Number Description Value4 Contracts Method Post) dure (quarter/ year) Works

Goods TIIGP2- PCU, PMU & $120,000 1 NCB Prior 1S1E Q3/2018 No CAM- PIU vehicles prequalification; G01 (4 vehicles) No domestic preference TIIGP2- PCU & PMU $20,000 2 Shopping Prior Quotation Q4/2018 No CAM- office furniture prequalification; G02 and No domestic equipment preference TIIGP2- PIU office $40,000 4 Shopping Post Quotation Q1/2019 No CAM- furniture and prequalification; G03 equipment (2 No domestic PIUs) preference

3 Exclusive of income tax on fees and VAT on reimbursable expenses and provisional sums. 4 Inclusive of taxes and duties. 405 Appendix 15

TIIGP2- Equipment $20,000 5 Shopping Post Quotation Q2/2019 No CAM-G5 ASEAN prequalification; Tourism No domestic Standards preference certification bodies TIIGP2- Equipment for $15,000 3 Shopping Post Quotation Q2/2019 No CAM-G7 DMO prequalification; secretariats No domestic preference 1S1E = single stage-one envelope; DMO = destination management organization; NCB = national competitive bidding; PCU = project coordination unit; PIU = project implementation unit

Consulting Services Advertise- Number Recruit- Review Package General Estimated ment Date Type of of ment (Prior / Comments Number Description Value5 (quarter/ Proposal Contracts Method Post) year) Individual Consultants Capacity Building Support TIIGP2- International $37,766 1 ICS Prior Q3/2018 EOI+CV International CAM- Procurement 3 p-m C03 Specialist TIIGP2- International $37,766 1 ICS Prior Q3/2018 EOI+CV International CAM- Institutional 3 p-m C04 Development Specialist TIIGP2- National $44,567 1 ICS Prior Q3/2018 EOI+CV National CAM- Tourism 12 p-m C06 Standards Specialist TIIGP2- National $32,609 1 ICS Prior Q3/2018 EOI+CV National CAM- Gender 10 p-m C07 Specialist TIIGP2- National $97,645 1 ICS Prior Q3/2018 EOI+CV National CAM- Financial 30 p-m C08 Management Specialist TIIGP2- National $58,624 1 ICS Prior Q3/2018 EOI+CV National CAM- Procurement 18 p-m C09 Specialist TIIGP2- National $45,940 1 ICS Prior Q3/2018 EOI+CV National CAM- Monitoring 12 p-m C010 and Evaluation Specialist CV = Curriculum Vitae; CQS = consultants’ qualifications selection; EOI = Expression of Interest; ICS = individual consultant selection; MSE = micro- and small-enterprise; p-m = person-months; PPP = public-private partnership; Q = quarter

5 Exclusive of income tax on fees and VAT on reimbursable expenses and provisional sums. 406 Appendix 15

B. Indicative List of Packages Required Under the Project

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

Goods and Works Estimated Estimated Procure- Review Bidding Package General Value Number of ment (Prior / Proce- Comments Number Description (cumulative) Contracts Method Post) dure 6 Works TIIGP2- Preah Sihanouk $ 7,306,200 1 ICB Prior 1S1E No prequalification; CAM-W01 Seaside Access No domestic and preference; Environmental Small works Improvements bidding documents TIIGP2- Preah Sihanouk $ 5,477,504 1 ICB Prior 1S1E No prequalification; CAM-W02 City-Koh Rong No domestic Passenger Pier preference; Improvements Small works bidding documents TIIGP2- Kep Landfill $6,292,000 1 ICB Prior 1S1E No prequalification; CAM-W03 Improvements No domestic preference; Small works bidding documents Goods TIIGP2- PCU, PMU & PIU $120,000 1 NCB Prior 1S1E No prequalification; CAM-G01 vehicles (4 No domestic vehicles) preference TIIGP2- PCU & PMU $20,000 2 Shopping Prior Quotation No prequalification; CAM-G02 office furniture No domestic and equipment preference TIIGP2- PIU office $40,000 4 Shopping Post Quotation No prequalification; CAM-G03 furniture and No domestic equipment (2 preference PIUs) TIIGP2- Kep landfill $715,000 1 NCB Post 1S1E No prequalification; CAM-G04 management No domestic equipment preference TIIGP2- Equipment $20,000 5 Shopping Post Quotation No prequalification; CAM-G5 ASEAN Tourism No domestic Standards preference certification bodies TIIGP2- Equipment for $400,000 8 Shopping Post Quotation No prequalification; CAM-G6 ASEAN Tourism No domestic Standards preference implementation (public sector) TIIGP2- Equipment for $15,000 3 Shopping Post Quotation No prequalification; CAM-G7 DMO secretariats No domestic preference TIIGP2- Equipment for $100,000 6 Shopping Post Quotation No prequalification; CAM-G8 heritage No domestic interpretation preference 1S1E = single stage-one envelope; ICB = international competitive bidding; DMO = destination management organization; MSE = micro- and small-enterprise; NCB = national competitive bidding; PCU = project coordination unit; PIU = project

6 Inclusive of taxes and duties. 407 Appendix 15

implementation unit

Consulting Services Estimated Estimated Recruit- Review Package General Value Type of Number of ment (Prior / Comments Number Description (cumulative) Proposal Contracts Method Post) 7 Firms TIIGP2- Project $ 1,515,512 1 QCBS Prior FTP International CAM-C01 Management and and National Civil Engineering Total 156 p-m Support 80:20 Quality- Cost Ratio Individual Consultants Institutional Capacity Building Support TIIGP2- International $403,601 1 ICS Prior EOI+CV International CAM-C02 Tourism 28 p-m Specialist/Co- Team Leader TIIGP2- International $37,766 1 ICS Prior EOI+CV International CAM-C03 Procurement 3 p-m Specialist TIIGP2- International $37,766 1 ICS Prior EOI+CV International CAM-C04 Institutional 3 p-m Development Specialist TIIGP2- National Tourism $133,520 1 ICS Prior EOI+CV National CAM-C05 Specialist / Deputy 36 p-m Team Leader TIIGP2- National Tourism $44,567 1 ICS Prior EOI+CV National CAM-C06 Standards 12 p-m Specialist TIIGP2- National Gender $32,609 1 ICS Prior EOI+CV National CAM-C07 Specialist 10 p-m

TIIGP2- National Financial $97,645 1 ICS Prior EOI+CV National CAM-C08 Management 30 p-m Specialist TIIGP2- National $58,624 1 ICS Prior EOI+CV National CAM-C09 Procurement 18 p-m Specialist

TIIGP2- National $45,940 1 ICS Prior EOI+CV National CAM-C010 Monitoring and 12 p-m Evaluation Specialist TIIGP2- Tourism experts - $150,000 30 SSS Post CV International CAM-C11 - various resource and national persons CV = Curriculum Vitae; CQS = consultants’ qualifications selection; EOI = Expression of Interest; ICS = individual consultant selection; MSE = micro- and small-enterprise; p-m = person-months; PPP = public-private partnership; Q = quarter; QCBS = quality- and cost-based selection

7 Exclusive of income tax on fees and VAT on reimbursable expenses and provisional sums. 408 Appendix 15

C. List of Awarded and On-going, and Completed Contracts

The following tables list the awarded and on-going contracts, and completed contracts.

1. Awarded and Ongoing Contracts

Goods and Works Advertise- Date of ADB Procure- Package General Estimated Contract ment Date Approval of ment Comments10 Number Description Value Value (quarter/ Contract Method year) Award

10 Indicate the Contractor’s name and the contract signing date.

Consulting Services Date of ADB Advertise- Package General Estimated Contract Recruitment Approval of ment Date Comments11 Number Description Value Value Method Contract (quarter/year) Award

11 Indicate the Consulting Firm’s name and the contract signing date.

2. Completed Contracts

Goods and Works Advertise- Date of ADB Procure- Package General Estimated Contract ment Date Approval of Date of ment Comments Number Description Value Value (quarter/ Contract Completion Method year) Award

Consulting Services Advertise- Date of ADB Recruit- Package General Estimated Contract ment Date Approval of Date of ment Comments Number Description Value Value (quarter/ Contract Completion Method year) Award

409 Appendix 15

D. National Competitive Bidding

1. General

7. The procedures to be followed for national competitive bidding shall be those set forth for the “National Competitive Bidding” method in the Government’s Procurement Manual of May 2012 issued under Sub-Decree No. 74 ANK.BK dated 22 May 2012 with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the Procurement Guidelines.

2. Application

8. Contract packages subject to National Competitive Bidding procedures will be those identified as such in the project Procurement Plan. Any changes to the mode of procurement from those provided in the Procurement Plan shall be made through updating of the Procurement Plan, and only with prior approval of ADB.

3. Eligibility

9. Bidders shall not be declared ineligible or prohibited from bidding on the basis of barring procedures or sanction lists, except individuals and firms sanctioned by ADB, without prior approval of ADB.

4. Advertising

10. Bidding of NCB contracts estimated at $500,000 or more for goods and related services or $1,000,000 or more for civil works shall be advertised on ADB’s website via the posting of the Procurement Plan.

5. Anti-Corruption

11. Definitions of corrupt, fraudulent, collusive and coercive practices shall reflect the latest ADB Board-approved Anti-Corruption Policy definitions of these terms and related additional provisions.

6. Rejection of all Bids and Rebidding

12. Bids shall not be rejected, and new bids solicited without ADB’s prior concurrence.

7. Bidding Documents

13. The bidding documents provided with the government’s Procurement Manual shall be used to the extent possible. The first draft English language version of the procurement documents shall be submitted for ADB review and approval, regardless of the estimated contract amount, in accordance with agreed review procedures (post and prior review). The ADB-approved procurement documents will then be used as a model for all procurement financed by ADB for the project, and need not be subjected to further review unless specified in the procurement plan.

8. Member Country Restrictions

14. Bidders must be nationals of member countries of ADB, and offered goods, works and services must be produced in and supplied from member countries of ADB.

410 Appendix 16: Financial Management Capacity Assessment Report and Recommendations

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 16 TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... 413 I. INTRODUCTION ...... 415 II. PROJECT DESCRIPTION ...... 415 III. COUNTRY ISSUES ...... 417 IV. RISK ANALYSIS ...... 420 V. PROJECT IMPLEMENTING INSTITUTIONS AND PROCEDURES ...... 423 VI. FUNDS FLOW ...... 424 VII. STAFFING ...... 425 VIII. ACCOUNTING POLICIES AND PROCEDURES ...... 426 IX. INTERNAL AND EXTERNAL AUDITS ...... 426 X. REPORTING AND MONITORING ...... 427 XI. INFORMATION SYSTEMS ...... 427 Annex 1. Financial Management Assessment Questionnaire Ministry of Tourism, Tourism Investment Department; Provincial Departments of Tourism ...... 428 Annex 2. Project Management Structure ...... 440

List of Tables Table 1: Financing Plan ...... 416 Table 2: Summary of 2015 Performance Measurement Framework ...... 418 Table 3: ASEAN Governance Indicators year 2015 ...... 419 Table 4: Financial Management Risk Assessment and Mitigation Measures ...... 420 Table 5: Project Financial Management Action Plan ...... 423

412 Appendix 16 EXECUTIVE SUMMARY

The financial management assessment (FMA) was carried out for the proposed project. The FMA covers the Ministry of Tourism (MOT) as the executing agency, MOT’s Tourism Investment Department (TID) in which the Project Coordination Unit (PCU) will be embedded, and the Departments of Tourism (DOT) for the provinces of Kep and Preah Sihanoukville in which the Project Implementation Units (PIUs) will be embedded. The objective of the assessment was to determine whether the entities implementing the project have acceptable financial management arrangements that can comply with ADB’s project accounting and reporting requirements.

The overall fiduciary risk in Cambodia as assessed in this report is considered moderate. In 2012, in support of improved transparency, clarity and efficiency, the government promulgated Sub-Decree No. 74/ANK/BK on Promulgating the Updated Standard Procedures for Implementing All Externally Financed Projects/Programs, which comprises: (i) Updated Standard Operating Procedures for All Externally-Financed Projects/Programs in Cambodia1; (ii) Updated Procurement Manual for All Externally-Financed Projects/Programs in Cambodia2; and (iii) Updated Financial Management Manual for All Externally-Financed Projects/Programs in Cambodia3. The MEF is the lead agency in complying with its provisions and associated regulations, and the use of the manuals is mandatory for all externally-financed projects. Cambodia’s 2010 Law on Anticorruption was promulgated in 2011 with the objective of combating corruption through education, prevention, and law enforcement.

MOT’s PCU has developed solid experience implementing externally-financed tourism management and infrastructure projects, including three financed by ADB. Internal controls are standardized under government laws and MEF regulations. As an example, ADB-financed projects are tightly controlled via established funds flow arrangements and compliance with ADB’s financial management procedures. Kep Province DOT participates in the ongoing first GMS Tourism Infrastructure for Inclusive Growth Project (Loan 3194-CAM).

The PCU will lead and coordinate financial management under the project. It is familiar with ADB procurement, disbursement, accounting and reporting requirements and has established and maintained acceptable financial management arrangements for three ADB-financed investment projects over 13 years. The MOT and DOTs use MS Excel as the basis for their accounting systems and recently started using Peachtree accounting software. The use of MS Excel provides counterpart staff and project consultants with an effective accounting platform that is easily accessed and understood by accountants, auditors and financial management specialists. Project accounts and related records are kept and maintained by the PCU and PIUs, separately from other projects. The accounts are dedicated to the recording of project financial transactions including the allocation of expenditures in accordance with the respective components, disbursement categories and sources of funds.

The MOT has internal controls in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained. The Law on Audit established the internal audit function in government ministries, institutions and public enterprises. For externally-financed projects, annual auditing is mandatory as specified in grant and loan agreements. The MEF is responsible for engaging independent audit firms to externally audit project accounts.

Key risks identified are the shortage of qualified accountants and procurement specialists, unreliable reporting, and potential for corruption. These will be mitigated with project support to for financial management and procurement consultants to be embedded in the PCU, use of ADB’s standard bidding documents, and enforcement of ADB and government anticorruption policies.

1 Available at: http://www.mef.gov.kh/documents/shares/investment/sop-sub-decree-8-june-2012.pdf 2 Available at: http://www.mef.gov.kh/documents/shares/investment/pm-vol-1-sub-decree-rev-8-june-2012.pdf 3 Available at: http://www.mef.gov.kh/documents/shares/investment/fmm-sub-decree-8-june-2012.pdf 413 Appendix 16

To further strengthen MOT’s capacity to effectively manage the project, experienced accountants with knowledge of ADB financial management procedures will be recruited by the PCU to provide continuous on-the-job training and mentoring on the management and maintenance of separate project accounts and records. The MOT-based PCU staff will in-turn train and build the financial management capacity of the PIU accountants and harmonize accounting procedures with those of the PCU.

414 Appendix 16 I. INTRODUCTION

1. The Financial Management Assessment (FMA) was conducted in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects (2005), Financial Due Diligence: A Methodology Note (2009), and Financial Management Technical Guidance Note (2015) and is intended to determine the degree to which the systems, procedures, and regulations for public financial management (PFM), procurement management, and anticorruption measures will be able to manage fiduciary risks.

2. The assessment aimed to determine the adequacy and reliability of executing and implementing agencies’ financial management, accounting, budgeting and reporting systems. It also assessed if systems and internal controls are in place, as well as staff competence, to conduct and supervise the project accounts are sufficient and in accordance with international standards.

3. The financial management system is being evaluated to ensure that (i) funds will be used only for the intended purposes (ii) proper recording of all transactions follows the required documentation procedures (iii) financial reporting is done correctly and regularly (iii) ensure safeguarding of entities’ assets; (iv) external audits follow ADB standards; and (v) there are sufficient staff available to carry out and supervise financial management tasks.

4. The previous FMA report undertaken in 2014 for ADB TA 8233-REG Preparing the GMS Tourism Infrastructure for Inclusive Growth Project was used as a reference for this assessment. Discussions with government officials were focused on preparing an action plan for issues identified in the FMA questionnaire (Annex 1). Data were updated as appropriate.

II. PROJECT DESCRIPTION

5. Impact, outcome and outputs. The expected project impact is sustainable, inclusive and more balanced tourism development, as envisaged in the ASEAN Tourism Strategic Plan 2016-2025. The expected project outcome is to increase the tourism competiveness of secondary towns in Cambodia and Lao PDR.

6. Output 1 infrastructure subprojects selection followed these criteria: (i) demonstrates strong potential to support job creation and poverty reduction, generate revenue, and facilitate regional cooperation and integration; (ii) complements and creates synergies with other ADB and government-financed investments, and those supported by other development partners; (iii) aligned with national and provincial tourism plans/strategies and GMS/ASEAN Tourism Sector Strategies (2016–2025); (iv) expected involuntary resettlement, environment, and indigenous people’s impacts are minor (ADB category B or lower); (v) local authorities, implementing agencies, and prospective beneficiaries support the subproject; (vi) indicative cost estimate for each infrastructure subproject (or consolidated procurement packages) is at least $3 million.

7. Output 2: Capacity to implement ASEAN Tourism Standards strengthened will: (i) support the national ASEAN Tourism Standards roll-out by establishing and strengthening certification bodies and assessment frameworks, promoting and facilitating adoption of the standards by the tourism sector, establishing sustainable financing mechanisms; and (ii) support the implementation of selected ASEAN Tourism Standards and the ASEAN Sustainable Tourism Awards. This output builds on and complements initial work undertaken regarding the national adaptation and implementation of the ASEAN Tourism Standards in Lao PDR under the first GMS Tourism Infrastructure for Inclusive Growth Project (2014-2019), the New Zealand-financed Lao Tourism Support Activity (2015-2020), and the EU-funded GIZ Luang Prabang – Handle with Care project (2016-2019).

8. Output 3: Institutional capacity for tourism destination management and infrastructure O&M strengthened. This output will: (i) build capacity among public and private stakeholders in

415 Appendix 16 the tourism sector to sustainably develop, manage, and market tourist destinations; and (ii) build capacity for infrastructure operation and maintenance (O&M) through the preparation of O&M plans and training to implement the plans.

9. Project financing. The project’s estimated cost for Cambodia is $30.88 million, of which $30.0 million will be a loan from ADB’s concessional ordinary capital resources. The government’s counterpart financing is $0.88 million. ADB will finance: (i) consulting services, including taxes; (ii) capitalized finance charges during implementation; (iii) civil works, including taxes; (iv) equipment, including taxes and duties; (vi) project management, training and capacity building activities, including taxes; and (vii) incremental administration/recurrent costs in accordance with MEFs Sub-Decree No. 74 ANK. BK (22 May 2012) on Promulgating the Updated Standard Procedures for Implementing All Externally Financed Projects/Programs.4 The Borrower will finance: (i) government counterpart staff salaries (in-kind), office space and utility expenses (in-kind); (ii) land acquisition and resettlement; and (iii) external auditing services. The Government of Cambodia will make the loan proceeds available to the executing agency, which will be passed on as grants to the participating provinces (Table 1).

Table 1: Financing Plan Source Amount ($ million) Share to Total Asian Development Banka 30.00 97.4% Government 0.88 2.6% Total 30.88 100.0% a Asian Development Fund Loan Sources: PPTA Consultant.

10. Implementation arrangements. The executing agency is MOT, which will establish a Phnom Penh-based Project Coordination Unit (PCU) within its Tourism Investment Department (TID) to handle overall project coordination and management; and lead ASEAN Tourism Standards implementation. Project Implementation Units (PIUs) will be established in Kep, and Preah Sihanouk, embedded in provincial Departments of Tourism (DOT). PIUs will comprise a director, administration staff, and two technical teams (infrastructure and tourism). The infrastructure technical team will manage output 1 subprojects under the supervision of a Deputy PIU Director seconded from the Department of Public Works and Transport (DPWT). Tourism teams will be managed by another Deputy PIU Director seconded from the DOT, and focus on supporting tourism training, capacity building, and other activities under outputs 2 and 3.

11. GMS Tourism Working Group. The GMS Tourism Working Group will coordinate subregional activities through its development coordination taskforce. Officials representing MOT, Ministry of Information, Culture and Tourism, Lao PDR, and Ministry of Culture, Sports and Tourism, Viet Nam will report project progress at semi-annual steering committee meetings that are joined by all GMS countries. The Mekong Tourism Coordinating Office will be meeting Secretariat.

12. National Project Steering Committee. The National Project Steering Committee (NPSC) will provide policy guidance and oversight. It will be chaired by Secretary of State, MOT and comprise senior officials representing the Ministry of Economy and Finance (MEF), Ministry of Environment, Ministry of Public Works and Transport (MPWT), Ministry of Women’s Affairs, and provincial government agencies and departments. The NPSC will meet at least once per year. The Project Coordination Unit (PCU) will act as the NPSC Secretariat.

13. Existing Provincial Tourism Development and Management Committees will coordinate provincial destination management strengthening activities.

4 The ADB loan will finance taxes and duties as requested by the government, as these are within reasonable country thresholds, do not represent an excessive share of project investment, and apply to only ADB-financed expenditures that are relevant to the project’s success. ADB will also finance recurrent costs, bank charges, transportation and insurance to facilitate project implementation. 416 Appendix 16 14. Project Coordination Unit. A dedicated PCU will be established at MOT, staffed with a project director, project manager, financial controller, chief accountant, and other staff. The PCU will have a tourism technical team consisting of a tourism training and standards specialist, and a marketing specialist, who will lead output 2 and select output 3 activities.

15. Project Implementation Units. PIUs will be embedded within the respective DOT Offices in Kep and Preah Sihanouk provinces to manage output 1 and select output 3 activities. Each PIU will comprise a DOT director, manager, finance officer, accountant and secretary. PIUs will have two full-time technical teams. One team, consisting of a civil works coordinator, engineer, surveyor, and safeguards specialist seconded from the DPWT, will manage output 1 infrastructure subprojects. Kep PIU will include a representative from the Kep Municipal Administration. The tourism team (output 3) will comprise a tourism coordinator, training specialist, tourism planner, and marketing and product development specialist, will (i) coordinate and support output 2 implementation; and (ii) manage select output 3 activities. PIUs will administer project sub-accounts to facilitate day-to-day project administration. Support for reporting, financial management, safeguards and knowledge management will be led by the PCU in close coordination with all PIUs.

16. Local Focal Points (LFP). To ensure that there is good coordination between the PCU, PIUs and project beneficiaries LFPs will be established in community based organizations (CBO), village development committees, community tourism groups and industry associations.

III. COUNTRY ISSUES

17. Country issues that could impact on the effective financial management of the project are concerned with: (i) public financial management (PFM); (ii) management and skills capacity; and (iii) the country environment. 1. Public Financial Management 1. In 2015, the MEF conducted the Public Expenditure and Financial Accountability Self- Assessment, (known as PEFA) as part of its continued reforms on the efficient use of public resources. The PEFA self-assessment is part of the World Bank Public Finance Management Modernization Program. It is a key step in the reform of Cambodia’s Public Financial Management sector.

2. This undertaking provides comprehensive guidance including on how to improve budget reliability, transparency of public finances, and management of assets and liabilities. The findings in Cambodia’s PEFA Report are also expected to advance the government’s efforts to prepare policy-based fiscal strategy and budgeting, and to improve predictability and control in budget execution, accounting, and reporting.

18. The PEFA assists governments to improve their public financial management by identifying criteria for an efficient management system. The last PEFA assessment was done in 2015.The assessment tool used was the Public Financial Management Performance Measurement,5 with indicators scoring between A to D, with A meaning better performance. PFM arrangements in Cambodia were assessed for the World Bank using the PFM performance measurement framework. The overall rating of the PFM assessment indicated a mixed result for the country. Of the 30 items rated, three (10%) were rated A; two were rated B (7%); 13 were rated C or C+ (43%); while twelve were rated D (40%). While single, system-wide ratings are not recommended under the PFM methodology, both mean and median ratings tend towards Cambodia being a C-level country as far as PFM is concerned. Table 2 is a summary of the results of this assessment. Indicators are scored from A to D, with A indicating better performance.

5 World Bank. 2010. The Lao People’s Democratic Republic Public Expenditure and Financial Accountability, Public Financial Management Assessment. Washington, D.C. 417 Appendix 16 Table 2: Summary of 2015 Performance Measurement Framework Indicator Score A. Credibility of the Budget Aggregate expenditure out-turn compared to original approved budget A

Composition of expenditure out-turn compared to original approved budget D+ Aggregate revenue out-turn compared to original approved budget A Stock and monitoring of expenditure payment arrears D+

B. Comprehensiveness and Transparency Classification of the budget C

Comprehensiveness of information included in budget documentation C Extent of unreported government operations C

Transparency of inter-governmental fiscal relations: B

Oversight of aggregate fiscal risk from other public sector entities C+ Public Access to key fiscal information D

(i) Policy-Based Budgeting

Orderliness and participation in the annual budget process A Multi-year perspective in fiscal planning, expenditure policy and budgeting C+ (ii) Predictability and Control in Budget Execution

Transparency of taxpayer obligations and liabilities C+

Effectiveness of measures for taxpayer registration and tax assessment D+ Effectiveness in collection of tax payment D+

Predictability in the availability of funds for commitment of expenditures C+

Recording and management of cash balances, debt and guarantees C+ Effectiveness of payroll controls D+

Competition, value for money and controls in procurement D+ Effectiveness of internal controls for non-salary expenditure C Effectiveness of internal audit C

(iii) Accounting, Recording and Reporting

Timeliness and regularity of accounts reconciliation C

Availability of information on resources received by service delivery units D Quality and timeliness of in-year budget reports C+

Quality and timeliness of annual financial statements D+

(iv) External Scrutiny and Audit

Scope, nature and follow-up of external audit NR

Legislative scrutiny of the annual budget law C+

Legislative scrutiny of external audit reports B

C. Donor Practices

Predictability of direct budget support D

Financial info provided by donors for budget, reporting on project, programme aid D+ Proportion of aid that is managed by use of national procedures D Source: World Bank. 2015. Public Expenditure and Financial Accountability, Public Financial Management Assessment. Washington, D.C. Note: Indicators are scored A to D. Score of A indicates better performance; NR = not reported.

19. While the Cambodian financial management arrangements for externally-financed projects and programs were updated and harmonized with ADB procedures in May 2012, the overall fiduciary risk in Cambodia is still considered to be high. This is due to the need for more transparency over the use of public finances with limited public access to Government budget and financial information. However, development partner-funded projects are considered sufficiently independent and transparent to assess the project’s exposure and mitigation of financial risks.

20. The promulgation of the Law on Procurement and Sub Decree No. 74 SD-SP-EFP-II, through its manual, the Financial Management Manual for Externally-Financed Projects, reduces fiduciary risks in respect to ADB-funded projects.

418 Appendix 16 2. Management and Skills Capacity 21. Cambodia has a growing number of qualified professional accountants and auditors. National universities offer degrees in accounting; administration and financial management. International accounting standards are widely used. International audit firms have offices in Phnom Penh with Khmer staff employed in senior positions and as team leaders during project audits. Khmer staff also hold management positions in major projects being implemented in Cambodia. However, financial management capacity development for government counterpart staff remains and important component of internationally-financed projects. 3. Country Governance

22. Despite numerous reforms, Cambodia’s basic governance systems remain weak. Checks and balances on executive authority are limited: in practice, the legislative and judicial branches have limited influence on the executive. The PFM system is being developed and is still inadequate to allow for resolute accountability in public expenditures. Government pay levels are extremely low, and general perception suggests that corruption is pervasive and impedes investment.

23. Cambodia’s governance performance is well below ASEAN benchmarks in most key indicators as shown in Table 4. Among a pool of 215 countries included in the World Bank’s Worldwide Governance Indicators6 in year 2015 Cambodia was ranked among the weakest in governance, and regulatory quality, which are below median rank. There is a strong perception within the international development community and private sector that governance is less than adequate, and there is skepticism concerning government commitment to implementing reforms. It is unclear just how well policy statements are supported by the legislature or integrated into line agency programs and activities.

Table 3: ASEAN Governance Indicators year 2015 Political Voice & Gov't Regula- Stability Rule of Control of ASEAN Country Account- Effective- tory / No Law Corruption ability ness Quality Violence Brunei -0.49 0.92 0.83 1.16 0.81 0.64 Cambodia -0.98 -0.14 -0.83 -0.35 -0.97 -1.04 Indonesia 0.03 -0.57 -0.29 -0.28 -0.60 -0.66 Lao PDR -1.58 0.04 -0.88 -0.84 -0.83 -1.04 Malaysia -0.34 0.00 1.01 0.55 0.51 0.30 Myanmar -1.65 -0.96 -1.53 -1.87 -1.35 -1.12 Philippines -0.04 -1.16 0.08 -0.06 -0.55 -0.58 Singapore 0.08 1.34 2.15 1.96 1.77 2.15 Thailand -0.34 -1.21 0.21 0.23 -0.17 -0.34 Viet Nam -1.38 0.25 -0.29 -0.68 -0.50 -0.56 ASEAN average -0.67 -0.15 0.05 -0.02 -0.19 -0.22 World Governance Indicators Percentile rank 19.4 40.8 22.0 39.2 17.1 14.4 of Cambodia among 215 countries Notes: The governance indicators are measured in the range of -2.5 (weak) to +2.5 (strong) with a higher score indicating better governance. The percentile rank among 215 countries ranges from 0 (lowest) to 100 (highest) rank. Source: World Bank - Worldwide Governance Indicators, http://databank.worldbank.org/

6 The Worldwide Governance Indicators (WGI) are a research dataset summarizing the views on the quality of governance provided by a large number of enterprise, citizen and expert survey respondents in industrial and developing countries.

419 Appendix 16 24. Procurement. Procurement procedures in Cambodia are regulated under the promulgated Law on Public Procurement (January 2012). The law applies to all public procurement in Cambodia, except for procurement under externally financed projects, which is governed by the project’s finance agreement. In absence of guiding procurement principles and procedures in the finance agreement, the provisions of the Law take precedence over the procedures of development partners. Procurement under development externally financed projects is further regulated under Sub Decree No. 74 ANK.BK, Updated Standard Procedures for All Externally Financed Projects/Programs (June 2012), its standard operating procedures and manuals, in particular the Updated Procurement Manual for All Externally Financed Projects/Programs in Cambodia, which is closely harmonized with ADB procurement guidelines. As a result, ADB projects, including those in the tourism sector, are designed and implemented in accordance with both ADB’s Procurement Guidelines (2015, as amended from time to time) and the Government’s Updated Procurement Manual for All Externally Financed Projects/Programs in Cambodia.

25. Anti-Corruption. Many of the features most commonly associated with systemic corruption exist in the Cambodia; low levels of organizational capacity, constrained information access, poorly functioning formal and informal systems of accountability, and underdeveloped civil society structures. Despite these prevailing conditions, procurement legislation in Cambodia is now well developed by regional and international standards. Compliance with Law on Anticorruption and its updated regulations is buttressed by strong anti-corruption provisions and penalties, which can result in perpetrators being charged under the Cambodian Criminal Code. However, the process and perceived consequences for lodging complaints deters whistle blowers and complainants. Transparency International’s ranking for Cambodia’s Corruption Index score is 156 out of 176 countries. 7

IV. RISK ANALYSIS

26. A summary financial management internal control and risk assessment was completed.8 The following assessed risks are based on existing circumstances, staffing and procedures, and include recommendations for risk mitigation measures.

Table 4: Financial Management Risk Assessment and Mitigation Measures Risk* Risk* With Risk Type Risk Description Without Mitigation Measures Mitigation Mitigation Inherent Risks 1. Country- Financial Management for High ADB will assist the Government with Moderate specific risks Externally Financed technical support for implementation Projects (FM-EFP) of new procurement, financial systems, particularly management and anti-corruption accounting, budget laws, regulations and standard preparation and execution, operating procedures. cash planning and performance measurement are inadequate. Shortage of skills in High On-going and planned efforts by Moderate financial management, ADB to support implementation of including financial analysis, the new FM-EFP. This includes management accounting, capacity building for all aspects of financial reporting and the FM-EFP. Project specific audit. interventions include embedding experienced project consultants in PM teams to support effective capacity building efforts. Malpractice and abuse of High The Law on Anticorruption provides Moderate FM-EFP rules by strong penalties for persons found employees. guilty of fraud and corruption; offences which are punishable under

7 https://www.transparency.org/news/feature/corruption_perceptions_index_2016 8 ADB. 2005. Financial Management and Analysis of Projects. Manila. 420 Appendix 16

Risk* Risk* With Risk Type Risk Description Without Mitigation Measures Mitigation Mitigation the Criminal Code. In addition, independent external auditors, whose qualifications, experience and TORs are acceptable to ADB, in accordance with appropriate auditing standards, will conduct external audit of project and imprest accounts. 2. Entity- MOT as executing agency High The existing PCU under the TID will Moderate specific risks and DOTs as implementing be utilized and expanded for the entities have limited staff project. The PCU-based National capability in financial Project Director and project management, accounting, accounting staff is familiar with ADB budgeting, internal controls disbursements and reporting and financial reporting. procedures. The PIU personnel (project manager and project accountants) under the DOT in each participating province will be trained in ADB procurement, disbursement and reporting procedures, and project accounting.

Government may be High Project financing plan will be Low unable to meet funding formulated with minimum obligations due to budget government counterpart funding, constraints. mainly comprising in-kind contributions.

3. Procure- Procurement capacity is High A refresher workshop to explain Moderate ment risks limited with no professional ADB’s current procurement procurement stream within guidelines will be conducted. Project the administration. implementation assistance Inadequate training of staff consultants will be recruited to in the correct procurement support the PCU and PIUs during procedures. project implementation. Potential corruption from High Project will used ADB standard Moderate procurement. bidding documents and procurement guidelines. The phone number of MEF and ADB’s anti-corruption office shall be advertised in the paper periodically for people to file complaints for any suspected cases of corruption and collusion so that the unit can investigate and prosecute offenders upon obtaining evidence of malfeasance. Overall Inherent Risk High Moderate Control Risks 4. Funds Funds may not reach Moderate ADB disbursement arrangements, Low flow intended beneficiaries in a including SOE, which have been timely manner. tested in prior projects and proven successful, will be used. 5. Staffing Limited capability of staff in High Existing PCU staff will be appointed Moderate financial management, to the project’s proposed PCU. The accounting, budgeting, PCU-based National Project Director internal controls and and project accounts staff is familiar financial reporting. with ADB disbursements and reporting procedures. The PIU personnel (Project Manager and project accountants) under the DOT in each participating province will be trained in project accounting and current ADB disbursement and reporting procedures.

421 Appendix 16

Risk* Risk* With Risk Type Risk Description Without Mitigation Measures Mitigation Mitigation 6. Poor systems and Moderate ADB and other development Low Accounting procedures in financial partners have on-going and planned policies and management, accounting, efforts to support implementation of procedures budgeting and internal the new FM-EFP reporting systems controls. and procedures. 7. Internal There is an internal audit High Independent external auditors, Low audit function in government whose qualifications, experience entities; however, these are and TOR are acceptable to ADB, in not qualified to audit FM- accordance with appropriate EFP accounts. auditing standards, will conduct external audit of project and imprest accounts. In addition, on-going and planned efforts by ADB and other development partners to strengthen PFM arrangements include improved internal controls. 8. External Delay in the completion of Moderate Qualified project accounting staff Low audit project accounts ready for shall be recruited by PCU and PIUs external audit. exclusively to handle separate accounts and related records for the project to ensure accounts and records are always up-to-date and ready for external audit. Project accounts and related records will be kept and maintained by PCU and PIUs separately from other on-going projects. Annual audit may not meet Moderate Independent external auditors, Low ADB requirements. whose qualifications, experience and TOR are acceptable to ADB, in accordance with appropriate auditing standards, will conduct external audit. A TOR for the audit, following the ADB template, has been prepared. 9. Reporting Unreliable reports due to High On-going and planned efforts by Moderate and errors and limited staff ADB and other development monitoring capability in financial partners to support the reporting. implementation of FM-EFP include improved financial reporting and monitoring of all aspects of sector financial performance. Progress reports will not be High Format for progress reports will Moderate able to link payments with specify the necessary linkages physical works and thus not between financial and physical provide improved control progress. Physical progress data for management. shall be collected at end of month to reduce the risk that the physical data may not synchronize with the month- end financial data. 10. Accounting software (MS High Training and capacity building will be Low Information Excel) is in use, but not continued to strengthen the systems being utilized to its full technical capacity of the staff and to capacity. increase their knowledge and utilization of MS Excel. Overall Risk High Moderate *Degrees of Risk Rating: High, Substantial, Moderate, Low ADB = Asian Development Bank; DOT = Department of Tourism; TID = Tourism Planning Development Department; DPWT = Department of Public Works and Transport; EA = executing agency; FM-EFP = financial management for externally financed projects; JFPR = Japan Fund for Poverty Reduction; MEF = Ministry of Economy and Finance; MOT = Ministry of Tourism; MPWT = Ministry of Public Works and Transport; PCU = project coordination unit; PIU = project implementation unit; TOR = terms of reference.

Source: Asian Development bank and the Ministry of Tourism.

422 Appendix 16 27. The following action plan (Table 6) for project financial management will guide implementation of the above risk mitigation measures. Table 5: Project Financial Management Action Plan Planned Action Output Responsible Due Date Party

PCU and PIU  As outlined in the PAM EA and IAs Prior to ADB financial  Appointment or recruitment of the Board management following: PCU and PIU directors; PCU approval of teams financial controller; PCU and PIU project established. accounting staff.

National and  Project oversight as outlined in the PAM EA and IAs Prior to ADB Provincial Board Project approval of Steering project Committees established and operational.

Project funds  As outlined in the PAM MEF, EA, PCU, Prior to initial flow  MEF, EA, PCU, and PIU staff briefed, and PIUs disbursement. arrangements imprest account opened, and project sub- assisted by adopted accounts established. international and & operational. national financial management and procurement specialists

PCU and PIU  Financial management and procurement EA, assisted by Within six financial support consultants mobilized; project project months of management accounting and financial reporting consultants project capacity systems established; PCU and PIUs effectiveness established and attend training on project accounting. financial  Project disbursement arrangements and systems procedures established and staff trained in their operation. operational.

PCU and PIU  At least 1 staff member from the PCU and PCU and PIU Within one staff attend each PIU attend ADB’s in-country year of project disbursement disbursement seminar. effectiveness seminar.

Publicizing  Grievance redress mechanism to report EA Within six grievance suspected procurement related cases of months of redress corruption and collusion established and project mechanism. publicized on project website. effectiveness  Contact details of MEF and ADB’s office on Anti-corruption periodically advertised in newspapers and on project website. ADB = Asian Development Bank; DOT = Department of Tourism; EA = executing agency; MEF = Ministry of Economy and Finance; PCU = project coordination unit; PIU = project implementation unit. Source: PPTA Consultant. V. PROJECT IMPLEMENTING INSTITUTIONS AND PROCEDURES 1. Ministry of Tourism 28. The MOT is the executing agency of the project. The MOT oversees the tourism sector nationwide: from the development of policies and regulations, tourism management, and

423 Appendix 16 national marketing. Currently, the MOT is restructuring its departments to facilitate a more efficient organization and is positioning itself as an investment information portal and public sector partner for tourism infrastructure projects.

29. The MOT links its operations through DOT offices in all of Cambodia’s provinces. The MOT’s TID has adequate exposure to ADB procurement and financing procedures through the ADB Mekong Tourism Development Project (2004-2008); JFPR 9156 CAM Market Access for the Poor in Central Cambodia; Loan 1969-CAM: GMS Tourism Infrastructure for Inclusive Growth Project (2014). TID has gained the requisite knowledge to implement ADB-financed projects. Consultant inputs will further enhance MOT’s capacity to support effective financial management and procurement. The ability of the MOT to act as EA and PCU and its provincial departments as IAs and PIUs provides a firm platform for successful implementation.

30. The capacity of MOT’s Department of Accounting and Finance (DAF) is adequate for public procurement funded from the National Budget. However, DAF’s capacity to manage large projects would still require consultants to support the department especially in the initial year to transfer the required knowledge and expertise. 2. Provincial Departments of Tourism and Public Works & Transport 31. The provincial DOTs have been selected as IAs at the provincial level for Kep and Preah Sihanouk. The DOTs will lead financial management with the DPWT overseeing the design and supervision of civil works construction. With assistance from the project implementation consultants and the PCU, the DOT-led PIUs will be responsible for day-to-day coordination and supervision of project implementation in the two provinces. The PIU personnel in each participating province will be trained in ADB procurement, disbursement and reporting procedures and project accounting. The DPWT implements the majority of civil works in the provinces under the authority of the MPWT. MPWT and DPWT have significant experience managing works procurement financed ADB and other development partners.

VI. FUNDS FLOW

32. The loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time)9, and detailed arrangements agreed upon between the government and ADB. Online training for project staff on disbursement policies and procedures is available.10 Project staff were encouraged to avail of this training to help ensure efficient disbursement and fiduciary control.

33. The PCU will also be responsible for: (i) preparing disbursement projections; (ii) requesting budgetary allocations for counterpart funds; (iii) collecting supporting documents; and (iv) preparing and sending withdrawal applications to the MEF for onward submission to ADB. The PCU will also be responsible for checking and signing off on all disbursement documents prior to submission to MOF and ADB.

34. Advance fund procedure. The Government will establish a pass-through account at the MEF for the ADB loan. The PCU will establish an advance account for the ADB loan at a commercial bank designated by the National Bank of Cambodia (NBC) and will be responsible for establishing, managing, replenishing, and liquidating this account. The PIUs will set up project subaccounts for the ADB grant with a commercial bank(s) designated by the NBC. Liquidation of the sub-accounts will be subject to submission of full documentation to the PCU.

35. The currency of the advance account is the US dollar. The advance account is to be used exclusively for ADB’s share of eligible expenditures. The MOT who administers the

9 The handbook is available electronically from the ADB website (https://www.adb.org/documents/loan-disbursement- handbook) 10 Disbursement eLearning. http://wpqr4.adb.org/disbursement_elearning 424 Appendix 16 advance account is accountable and responsible for proper use of advances to the advance account, including advances to any sub-accounts.

36. The total outstanding amount to the advance account should not exceed the estimate of ADB’s share of expenditures to be paid through the advance account for the forthcoming 6 months. The MOT may request for initial and additional advances to the advance account based on an Estimate of Expenditure Sheet11 setting out the estimated expenditures to be financed through the account for the forthcoming 6 months. Supporting documents should be submitted to ADB or retained by the MICT in accordance with ADB’s Loan Disbursement Handbook when liquidating or replenishing the advance account.

37. Statement of expenditure procedure.12 The SOE procedure may be used for reimbursement of eligible expenditures or liquidation of advances to the advance account. The ceiling of the SOE procedure is the equivalent of $100,000 per individual payment. Supporting documents and records for the expenditures claimed under the SOE should be maintained and made readily available for review by ADB's disbursement and review missions, upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit. Reimbursement and liquidation of individual payments above the SOE ceiling must be supported by full documentation when submitting the withdrawal application to ADB.

38. Before the submission of the first withdrawal application (WA), the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the government, together with the authenticated specimen signatures of each authorized person. The minimum value per WA is stipulated in ADB’s Loan Disbursement Handbook. Individual payments below such amount will be paid (i) by the executing agency and subsequently claimed to ADB through reimbursement, or (ii) through the advance fund procedure, unless otherwise accepted by ADB. The borrower should ensure sufficient category and contract balances before requesting disbursements. Use of ADB’s Client Portal for Disbursement (CPD) system will be encouraged for submission of withdrawal applications to ADB.

Disbursement Arrangements for Counterpart Funds 39. The Government will provide counterpart funds of $0.88 million equivalent (2.6% of total project cost). The PCU will be responsible for: (i) preparing disbursement projections; and (ii) requesting budgetary allocations for counterpart funds.

VII. STAFFING

40. The existing PCU will be expanded to manage project implementation. During the PPTA for the proposed project, the PCU acted as the TA counterpart. PCU staff have acquired sufficient knowledge and skills to manage the project’s finances. The Project Director, Administrator, and Accountant are familiar with ADB procurement, disbursements and reporting procedures.

41. With the support of a financial management and procurement consultant, the PCU will select and train staff at the DOT PIU level. The PCU has sound experience in PIU management, gained during the implementation of past ADB-financed projects. Knowledge transfer to DOTs will be an important aspect of project implementation, as provincial counterparts have lower financial management and accounting capacity.

11 Estimate of Expenditure sheet is available in Appendix 8A of ADB’s Loan Disbursement Handbook (2017, as amended from time to time). 12 SOE forms are available in Appendix 7B and 7D of ADB’s Loan Disbursement Handbook (2017, as amended from time to time). 425 Appendix 16 42. Suitably qualified and experienced project accountants (contract staff) will be recruited by the PCU for the PIUs to manage separate accounts and related records for the project. Project accounting staff will be required to have experience in project or enterprise accounting, budgeting and financial planning. Accounting staff will be skilled in the use of MS Office programs, specifically MS Excel and Word. To ensure timely disbursement, PIU accounting staff will be trained by the PCU and project consultants within one month after project effectiveness. PCU and PIU staff will also receive support and on the job training from the international and national financial management and procurement consultants. PCU and PIU staff will be invited to attend periodic disbursement and financial management seminars conducted by ADB’s Controller’s Department.

43. In total, the PCU will employ 8 full-time counterpart staff and 3 contractors. The PIUs will have multidisciplinary teams comprising about 10 staff to manage the infrastructure and tourism capacity building outputs of the project. The PCU and each PIU will dedicate at least 3 full-time staff to financial management and procurement.

VIII. ACCOUNTING POLICIES AND PROCEDURES

44. The MOT will maintain separate accounts and records by funding source for all expenditures incurred on the project following international public-sector accounting standards for cash-based accounting. The MOT 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.

45. An accounting system specific to the project shall be established to accurately record all project financial transactions including details of project expenditures by disbursement categories and source of funds. All project expenditures will be linked to approved activities in the annual work plan and budget. The General Ledger and subsidiary ledgers will be reconciled monthly and supporting documents will be compiled in accordance with ADB and Government requirements.

46. Actual expenditure will be compared with budgetary allocations and any significant discrepancies recorded and explained. Significant variations in the annual budget and work plan will need to be jointly reviewed and approved by ADB and the EA. The procurement of works and goods will be made in accordance with ADB’s prevailing Procurement Guidelines and recruitment of consultants in accordance with ADB prevailing Guidelines on the Use of Consultants.

IX. INTERNAL AND EXTERNAL AUDITS

47. The MOT will prepare and submit the detailed consolidated project financial statements to be audited in accordance with International Standards on Auditing, by an independent auditor acceptable to ADB. The audited project financial statements together with the auditor’s opinion will be presented in the English language to ADB within 6 months from the end of the fiscal year by the MOT.

48. The audit report for the project financial statements will include a management letter and auditor’s opinions, which cover (i) whether the project financial statements present an accurate and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting standards; (ii) whether the proceeds of the grant were used only for the purpose(s) of the project; and (iii) whether the borrower or executing agency was in compliance with the financial covenants contained in the legal agreements.

49. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor.

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50. The government has been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements. ADB reserves the right to require a change in externally contracted auditors, 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.

51. Public disclosure of the audited project financial statements, including the auditor’s opinion on the project financial statements, will be guided by ADB’s Public Communications Policy 2011.13 After the review, ADB will disclose the audited project financial statements and the opinion of the auditors on the project financial statements no later than 14 days of ADB’s confirmation of their acceptability by posting them on ADB’s website. The management letter, additional auditor’s opinions, and audited entity financial statements will not be disclosed.

X. REPORTING AND MONITORING

52. The PCU and PIUs will prepare monthly, quarterly and annual financial reports in accordance with MEF and ADB reporting requirements agreed in the PAM and specified in the financial agreement. The financial reporting system will track progress on each project component and link financial information with physical progress. The PCU will submit these reports to MOT for review before submission to MEF and ADB.

XI. INFORMATION SYSTEMS

53. The PCU and PIUs will use MS Office Excel as the accounting software platform for the project. Accounting templates will meet the accounting and reporting requirements of the MEF and ADB. Records and accounts for project income and expenditures will be established according to agreed project components, disbursement categories, and sources of funds. Training for new PCU and PIU staff will be provided as necessary.

13 Public Communications Policy: http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications 427 Appendix 16 Annex 1. Financial Management Assessment Questionnaire Ministry of Tourism, Tourism Investment Department; Provincial Departments of Tourism (December 2017) Topic Response Risk 1. Executing / Implementing Agency 1.1 What is the entity’s legal status/registration? It is a government ministry Low recognized by Royal Decree 1.2 How much equity (shareholding) is owned by the 100% Low Government?

1.3 Obtain the list of beneficial owners of major Not applicable. blocks of shares (non-governmental portion), if any.14

1.4 Has the entity implemented an externally- Yes, ongoing projects include Low financed project in the past? If yes, please ADB-financed GMS Tourism provide details. Infrastructure for Inclusive Growth Project (L3194-CAM), Improving market access forth Poor JFPR-9156) and GMS Mekong Tourism Development Project (L1970-CAM).

1.5 Briefly describe the statutory reporting Annual financial statements Low requirements for the entity. submitted to Ministry of Economy and Finance (MEF). Externally- financed project reporting is quarterly and annual. 1.6 Describe the regulatory or supervisory agency The entity is independent as a Low of the entity. government Ministry. Oversight by National Assembly. 1.7 What is the governing body for the project? Is National Project Steering Low the governing body for the project independent? Committee under the MOT comprised of representatives from national level and participating provinces (Kep and Preah Sihanouk.) 1.8 Obtain current organizational structure and The current structure and Low. Project will describe key management personnel. Is the governance is adequate, some finance. organizational structure and governance accounting positions will need to appropriate for the needs of the project? be externally hired.

1.9 Does the entity have a Code of Ethics in place? Civil servants and contractors Low required to abide by the 2010 Anticorruption Law 1.10 Describe (if any) any historical issues reports of None, covering 13 years of ADB- Low ethics violations involving the entity and financed projects. management. How were they addressed?

2. Funds Flow Arrangements 2.1 Describe the (proposed) project funds flow See attached chart Low. Used arrangements in detail, including a funds flow Refer to PAM for details. ADB without incident diagram and explanation of the flow of funds loan and government equity for 13 years/ from ADB, government and other financiers, to flows from ADB to MEF to PCU thousands of the government, EA, IA, suppliers, contractors, to PIUs to suppliers/ contractors/ transactions. ultimate beneficiaries, etc. as applicable. consultants. Direct payment is also an option for payment.

14 In such cases, consult OAI on the need for integrity due diligence on non-governmental beneficial owners. 428 Appendix 16

Topic Response Risk 2.2 Are the (proposed) arrangements to transfer the Yes. Audited past performance Low proceeds of the loan (from the government / of advance account Finance Ministry) to the entity and to the end- management, statement of recipients satisfactory? expenditure procedure, and direct payment satisfactory. 2.3 Are the disbursement methods appropriate? Yes. The disbursement method Low is already being used in the current ADB-financed project. 2.4 What have been the major problems in the past No major problems, minor Low involving the receipt, accounting and/or weaknesses in movable asset administration of funds by the entity? registry management and record keeping (i.e. quote-invoice- receipt for low-value transactions).

2.5 In which bank will the project account (if National Bank of Cambodia and Low applicable) be established? commercial banks acceptable to MEF and ADB. 2.6 Is the bank in which the imprest account is Yes Low established capable of−  Executing foreign and local currency transactions?  Issuing and administering letters of credit Yes (LC)? Yes  Handling a large volume of transaction? Yes  Issuing detailed monthly bank statements promptly?

1.7 Is the ceiling for disbursements from the imprest Yes - $100,000 SOE ceiling, Low account and SOE appropriate/required? enough for timely disbursement of small expenditure, and appropriate to mitigate risk of abuse. 2.8 Does the (proposed) project implementing unit Yes, for MOT and Kep PIU. Moderate (PCU/PIU) have experience in the management Preah Sihanouk DOT lacks of disbursements from ADB? experience and will receive targeted capacity building. 2.9 Does the PCU have adequate administrative Yes. The PCU has experience in Low and accounting capacity to manage the imprest current ADB project. No issues fund and statement of expenditure (SOE) expected, but ceiling proposed procedures in accordance with ADB’s Loan as additional safeguard. Disbursement Handbook (LDH)? Identify any concern or uncertainty about the PCU’s administrative and accounting capability which would support the establishment of a ceiling on the use of the SOE procedure.

2.10 Is the entity exposed to foreign exchange risk? No. The MEF carries the foreign Low If yes, describe the entity’s policy and exchange risk, however project- arrangements for managing foreign exchange level risk is appropriately risk. addressed in cost estimates.

2.11 How are the counterpart funds accessed? Allocated by MEF as part of Low annual budgetary process.

2.12 How are payments made from the counterpart MOT-DOTs pay counterpart staff Low funds? salaries and in-kind recurrent costs only; MEF General Department of

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Topic Response Risk Resettlement pays any resettlement costs and MEF recruits and pays auditor. 2.13 If project funds will flow to communities or Yes. All transactions require Low NGOs, does the PIU have the necessary substantiation, based on annual reporting and monitoring arrangements and project budget plan, price quotes, features built into its systems to track the use of invoices, and valid receipts – project proceeds by such entities? these are audited annually.

2.14 Are the beneficiaries required to contribute to No. Beneficiaries will contribute Low project costs? If beneficiaries have an option to their time, however, to participate contribute in kind (in the form of labor or in training and awareness material), are proper guidelines and activities. arrangements formulated to record and value the labor or material contributions at appraisal and during implementation?

3. Staffing 3.1 What is the current and/or proposed please see chart Low organizational structure of the accounting 1 financial controller department? Attach an organization chart. 1 assistant 1 financial Management Specialist/consultant 3.2 Will existing staff be assigned to the project, or Mostly existing staff and qualified Low will new staff be recruited? new recruits.

3.3 Describe the existing or proposed project See job descriptions in PAM. Moderate, accounting staff, including job title, because responsibilities, educational background and recognized professional experience. Attach job descriptions accounting and and CVs of key existing accounting staff. procurement capacity is low. 3.4 Is the project finance and accounting function Yes, under on-going project. Low staffed adequately?

3.5 Are the project finance and accounting staff Yes, under on-going project. Low adequately qualified and experienced?

3.6 Are the project finance and accounting staff Yes, under on-going project all Low trained in ADB procedures, including the participated in several ADB- disbursement guidelines (i.e., LDH)? organized trainings/seminars.

3.7 What is the duration of the contract with the Renewed annually, renewable Low project finance and accounting staff? over duration of project. Counterpart staff are indefinite duration, full-time civil servants. 3.8 Identify any key positions of project finance and Fully staffed, according to need. Low accounting staff not contracted or filled yet, and the estimated date of appointment.

3.9 For new staff, describe the proposed project N/A finance and accounting staff, including job title, responsibilities, educational background and professional experience. Attach job descriptions.

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Topic Response Risk 3.10 Does the project have written position Yes, see PAM. Low descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all officers, managers, and staff?

3.11 What is the turnover rate for finance and Historic trend suggests less than Low accounting personnel (including terminations, 20% staff turn-over during project resignations, transfers, etc.)? cycle.

3.12 What is training policy for the finance and All staff have equal opportunity Medium. project accounting staff? for capacity building, however includes comprehensive events are ad-hoc. financial management and procurement training. 3.13 Describe the list of training programs attended ADB Disbursement Seminar Moderate, as by finance and accounting staff in the last 3 Periodic and on-the-job financial these don’t result years. management training provided in a credential by L3194-CAM consultants 4. Accounting Policies and Procedures 4.1 Does the entity have an accounting system that Yes, the government uses Low. allows for the proper recording of project Peachtree accounting software, financial transactions, including the allocation of which can perform these expenditures in accordance with the respective functions. components, disbursement categories, and sources of funds (in particular, the legal agreements with ADB)? Will the project use the entity accounting system? If not, what accounting system will be used for the project?

4.2 Are controls in place concerning the preparation Yes, each has a budget code in Low and approval of transactions, ensuring that all workplan, proposal, endorsement transactions are correctly made and adequately by project manager, approval by explained? project director, which are audited

4.3 Is the chart of accounts adequate to properly Yes, a harmonized chart of Low account for and report on project activities and account is being used under disbursement categories? Obtain a copy of the L3194 chart of accounts.

4.4 Are cost allocations to the various funding Yes, and audited. Low sources made accurately and in accordance with established agreements?

4.5 Are the General Ledger and subsidiary ledgers Yes, if differences are found Low reconciled monthly? Are actions taken to accountant checks for resolve reconciliation differences? modification, added or deletion and error corrected. 4.6 Describe the EA’s policy for retention of All financial documents archived Low accounting records including supporting for at least 3 years after project documents (e.g., ADB’s policy requires that all closed. Procurement documents documents should be retained for at least 1 year for at least 5 years. after ADB receives the audited project financial statements for the final accounting period of implementation, or 2 years after the loan closing date, whichever is later). Are all accounting and supporting documents retained in a defined system that allows authorized users easy access?

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Topic Response Risk 4.7 Describe any previous audit findings that have Minor weaknesses are Low not been addressed. adequately addressed.

Segregation of Duties 4.8 Are the following functional responsibilities - Minister delegates to project Low performed by different units or persons: (i) director authorization to authorization to execute a transaction; (ii) execute transactions (e.g. sign recording of the transaction; (iii) custody of withdrawal applications) assets involved in the transaction; (iv) - Recording done by financial reconciliation of bank accounts and subsidiary controller ledgers? - Custody of asset done by director/manager - Reconciliation of bank accounts done by financial specialist/accountant

4.9 Are the functions of ordering, receiving, Service, goods or works are Low accounting for, and paying for goods and requested by project team services appropriately segregated? member, for authorization by manager or director. Accountant accepts invoices, obtains permission to pay, pays, and receives and files receipt. Team then confirm receipt of service, goods or works. All payments over $500 by cheque or electronic transfer.

Salaries are paid by cheque/bank transfer Budgeting System 4.10 Do budgets include physical and financial Yes, based on annual workplan, Low targets? and detailed cost estimates and cost norms. 4.11 Are budgets prepared for all significant activities Yes, works have detailed BoQs Low in sufficient detail to allow meaningful and specifications and activities monitoring of subsequent performance? detailed cost estimates with targets. 4.12 Are actual expenditures compared to the budget Yes. For every activity. If over Low with reasonable frequency? Are explanations typical 10% contingency, required for significant variations against the reauthorization by director budget? required.

4.13 Are approvals for variations from the budget Depends on amount. Prior for required (i) in advance, or (ii) after the fact? high value, post for low value/within contingency. 4.14 Is there a ceiling, up to which variations from the Yes. 10%-20%. Low budget may be incurred without obtaining prior approval?

4.15 Who is responsible for preparation, approval Finance staff (accountant and Low and oversight/monitoring of budgets? controller), checked by manager and approval by director 4.16 Describe the budget process. Are procedures in Yes, an annual budget plan Low place to plan project activities, collect prepared by PCU and PIUs, information from the units in charge of the reviewed by managers, endorsed different components, and prepare the budgets? by steering committee, then approved by director as basis of annual workplan.

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Topic Response Risk 4.17 Are the project plans and budgets of project Yes – project team prepares Low activities realistic, based on valid assumptions, based on project cost estimates and developed by knowledgeable individuals? and experience.

Is there evidence of significant mid-year revisions, inadequate fund releases against Not typically. allocations, or inability of the EA to absorb/spend released funds?

Is there evidence that government counterpart No, and counterpart funding funding is not made available adequately or on requirements are minimized to a timely basis in prior projects? avoid problems.

What is the extent of over- or under-budgeting of major headings over the last 3 years? Is there Delayed works procurement led a consistent trend either way? to some overbudgeting in 2017, which could be carried to subsequent year, but no issues for other budget categories. Payments 4.18 Do invoice-processing procedures require: (i) Yes – with approval and Low. Copies of purchase orders and receiving reports document custody described to be obtained directly from issuing above. departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations? (v) Checking authenticity of invoices and supporting documents?

4.19 Are all invoices stamped PAID, dated, reviewed Yes, almost always, the PAID Low and approved, recorded/entered into the system stamp missing from small correctly, and clearly marked for account code purchases, as minor weakness in assignment? audit reports.

4.20 Do controls exist for the preparation of the Yes, tracking log for govt staff Low payroll? Are changes and invoice/request and receipt (additions/deductions/modifications) to the for consultants. payroll properly authorized?

Policies and Procedures 4.21 What is the basis of accounting (e.g., cash, Cash, for project accounts. Low accrual) followed (i) by the entity? (ii) By the project?

4.22 What accounting standards are followed Cambodian Accounting Low (International Financial Reporting Standards, Standards based on the International Public-Sector Accounting International Financial Reporting Standards – cash or accrual, or National Standards – cash based. Accounting Standards (specify) or other?

4.23 Does the project have adequate policies and Yes. The Standard Operating Low procedures manual(s) to guide activities and Procedures Manuals. ensure staff accountability?

4.24 Is the accounting policy and procedure manual Yes, project specific guidelines Low updated regularly and for the project activities? follow PAM.

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Topic Response Risk

4.25 Do procedures exist to ensure that only Yes. This would require MEF Low authorized persons can alter or establish a new authorization. accounting policy or procedure to be used by the entity?

4.26 Are there written policies and procedures Yes. The Standard Operating Low covering all routine financial management and Procedures Manuals. related administrative activities?

4.27 Do policies and procedures clearly define Yes. The Standard Operating Low conflict of interest and related party transactions Procedures Manuals and (real and apparent) and provide safeguards to references to Law on protect the organization from them? Anticorruption. 4.28 Are manuals distributed to appropriate Yes, and in office files. Low personnel?

4.29 Describe how compliance with policies and This forms part of audit TOR. Low procedures are verified and monitored. Cash and Bank 4.30 Indicate names and positions of authorized Secretary of State – MOT Low signatories for bank accounts. Include those Director general – MOT persons who have custody over bank Project Director – MOT passwords, USB keys, or equivalent for online Project Manager/Accountant – transactions. MOT 4.31 Does the organization maintain an adequate Yes Low and up-to-date cashbook recording receipts and payments?

4.32 Describe the collection process and cash Not applicable. Low handling procedures. Do controls exist for the collection, timely deposit and recording of receipts at each collection location?

4.33 Are bank accounts reconciled on a monthly Yes Low basis? Or more often? Monthly Is cash on hand physically verified, and reconciled with the cash books? With what frequency is this done?

4.34 Are all reconciling items approved and Yes, in adjusted monthly Low recorded? statements, when needed.

4.35 Are all unusual items on the bank reconciliation Review is done by the controller. Low reviewed and approved by a responsible Approval by the Director. official?

4.36 Are there any persistent/non-moving reconciling None found. Low items?

4.37 Are there appropriate controls in safekeeping of Yes, in a safe or filing cabinet, Low unused cheques, USB keys and passwords, and memory. official receipts and invoices?

4.38 Are any large cash balances maintained at the Petty cash is up to USD2,000 in Low head office or field offices? If so, for what PCU, USD1,000 in PIU. purpose?

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Topic Response Risk 4.39 For online transactions, how many persons Never use -- possess USB keys (or equivalent), and passwords? Describe the security rules on password and access controls.

Safeguard over Assets Low 4.40 What policies and procedures are in place to Inventory counting annually, Low adequately safeguard or protect assets from moveable and immovable asset fraud, waste and abuse? register, vehicle logs.

4.41 Does the entity maintain a Fixed Assets Yes. The register update Low Register? Is the register updated monthly? quarterly and record ownership Does the register record ownership of assets, of assets. No liens or any assets under lien or encumbered, or have encumbrances. been pledged?

4.42 Are subsidiary records of fixed assets, Yes, for foxed assets. Low inventories and stocks kept up to date and reconciled with control accounts?

4.43 Are there periodic physical inventories of fixed Yes, labeling with indelible Low assets, inventories and stocks? Are fixed stickers/ink. assets, inventories and stocks appropriately labeled? 4.44 Are the physical inventory of fixed assets and Yes, but typically end of project. Low stocks reconciled with the respective fixed assets and stock registers, and discrepancies analyzed and resolved?

4.45 Describe the policies and procedures in Reporting of broken assets and Low disposal of assets. Is the disposal of each asset the internal asset committee appropriately approved and recorded? Are (comptroller, director and steps immediately taken to locate lost, or repair procurement specialist) broken assets? evaluates. 4.46 Are assets sufficiently covered by insurance Vehicles and office Low policies? facilities/equipment are.

4.47 Describe the policies and procedures in Unclear, ad-hoc. Moderate. identifying and maintaining fully depreciated assets from active assets.

Other Offices and Implementing Entities 4.48 Describe any other regional offices or executing Kep and Preah Sihanouk Low entities participating in implementation. Departments of Tourism, to manage project subaccounts, balance up to $10,000. 4.49 Describe the staff, their roles and Described in PAM. Structure Low responsibilities in performing accounting and follows that described above for financial management functions of such offices executing agency. as they relate to the project.

4.50 Has the project established segregation of Yes, subaccounts are audited Low duties, controls and procedures for flow of funds externally and internally by PCU. and financial information, accountability, and reporting and audits in relation to the other offices or entities?

4.51 Does information among the different Yes. Budget planning and audits Low offices/implementing agencies flow in an doing jointly. accurate and timely fashion? In particular, do

435 Appendix 16

Topic Response Risk the offices other than the head office use the same accounting and reporting system?

4.52 Are periodic reconciliations performed among Yes, sub-account checked and Low the different offices/implementing agencies? reconciled through monthly Describe the project reporting and auditing reports and spot checks by PCU. arrangements between these offices and the main executing/implementing agencies.

4.53 If any sub-accounts (under the Imprest Account) DOTs have sufficient capacity Low will be maintained, describe the results of the and will have sufficient staff to assessment of the financial management manage low-value, low-risk capacity of the administrator of such sub- subaccount. accounts.

Contract Management and Accounting 4.54 Does the agency maintain contract-wise Yes, using ADB’s standard Low accounting records to indicate gross value of contract documents and contract, and any amendments, variations and conditions. escalations, payments made, and undisbursed balances? Are the records consistent with physical outputs/deliverables of the contract?

4.55 If contract records are maintained, does the Yes, on as-needed basis. Low agency reconcile them regularly with the contractor? Other 4.56 Describe project arrangements for reporting Arrangements follow ADB’s Low fraud, corruption, waste and misuse of project anticorruption policy (2008) and resources. Has the project advised employees, government’s 2010 Lao on beneficiaries and other recipients to whom to Anticorruption. Instructions to report if they suspect fraud, waste or misuse of report grievance on project project resources or property? website. ADB’ standard anticorruption clauses in contracts with suppliers and staff. ADB review missions explain anticorruption policy and reporting. Staff advised to direct concerns to project manager, project director, and ADB project officer. 5. Internal Audit 5.1 Is there an internal audit (IA) department in the Yes. Internal auditor with MOT, Low entity? reviews Ministry and provincial DOTs. 5.2 What are the qualifications and experience of Most have accounting and Moderate, lacking the IA staff? project management experience, auditor qualifications could none are CPAs. lead to inaccurate findings. 5.3 To whom does the head of the internal audit Director General, Administration report? and Finance Department, MOT.

5.4 Will the internal audit department include the Yes. Low project in its annual work program?

5.5 Are actions taken on the internal audit findings? Yes, but unclear what these are, Moderate as neither good practices or infractions were mentioned. 5.6 What is the scope of the internal audit program? Ad-hoc review of project Moderate How was it developed? accounts.

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Topic Response Risk

5.7 Is the IA department independent? No. the IA under supervision of Moderate MOT minister. 5.8 Do they perform pre-audit of transactions? No. Moderate

5.9 Who approves the internal audit program? Director General, Administration Moderate and Finance Department, MOT. 5.10 What standards guide the internal audit Cambodia Auditing Standards, Moderate program? loosely applied.

5.11 How are audit deficiencies tracked? Auditors report recommendations Moderate and follow up reports. 5.12 How long have the internal audit staff members Director more than 15 years, Moderate been with the organization? staff, though not only handling audit, 2 – 10 years. 5.13 Does any of the internal audit staff have an IT Yes, all proficient with basic Low background? accounting software / IT applications. 5.14 How frequently does the internal auditor meet Unclear. Moderate with the audit committee without the presence of management?

5.15 Has the internal auditor identified / reported any Yes, as with external audit, minor Moderate issue with reference to availability and weakness recording small completeness of records? transactions and safekeeping records for these. 5.16 Does the internal auditor have sufficient Yes, Administration and Finance Moderate. knowledge and understanding of ADB’s Department participates in ADB guidelines and procedures, including the seminars and training, but not disbursement guidelines and procedures (i.e., experts. LDH)? 6. External Audit – entity level 6.1 Is the entity financial statement audited regularly Yes, National Audit Authority of Low by an independent auditor? Who is the auditor? Cambodia.

6.2 Are there any delays in audit of the entity? Not known – within 6 months of Low When are the audit reports issued? end preceding fiscal year.

6.3 Is the audit of the entity conducted in Yes, Cambodia National Low accordance with the International Standards on Accounting Standards. Auditing, or the International Standards for Supreme Audit Institutions, or national auditing standards? 6.4 Were there any major accountability issues None found. Low noted in the audit report for the past three years? 6.5 Does the external auditor meet with the audit If needed. Low committee without the presence of management? 6.6 Has the entity engaged the external audit firm No. Low for any non-audit engagements (e.g., consulting)? If yes, what is the total value of non-audit engagements, relative to the value of audit services? 6.7 Has the external auditor expressed any issues Some minor weaknesses with Low on the availability of complete records and low value transactions. supporting documents?

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Topic Response Risk 6.8 Does the external auditor have sufficient Yes. Low knowledge and understanding of ADB’s guidelines and procedures, including the disbursement guidelines and procedures (i.e., LDH)? 6.9 Are there any material issues noted during the None known. Low review of the audited entity financial statements that were not reported in the external audit report?

External Audit – project level 6.10 Will the entity auditor audit the project accounts, MEF will competitively recruit a Low or will another auditor be appointed to audit the private firm to perform external project financial statements? audit of project accounts.

6.11 Are there any recommendations made by the No, MOT addressing minor Low auditors in prior project audit reports or weakness discussed above. management letters that have not yet been implemented? 6.12 Is the project subject to any kind of audit from No, not normally. Low an independent governmental entity (e.g. the supreme audit institution) in addition to the external audit? 6.13 Has the project prepared acceptable terms of Yes, using SERDs model TOR, Low reference for an annual project audit? Have included in the PAM. these been agreed and discussed with the EA and the auditor? 6.14 Has the project auditor identified any issues with As above, only minor issues. Low the availability and completeness of records and supporting documents? 6.15 Does the external auditor have sufficient Yes. Low knowledge and understanding of ADB’s guidelines and procedures, including the disbursement guidelines and procedures (i.e., LDH)? 6.16 Are there any recommendations made by the Some. For example, tax payment Moderate. auditors in prior audit reports or management for individual consultants letters that have not yet been implemented? unresolved.

[For second or subsequent projects] Yes. Satisfactory compliance Low 6.17 Were past audit reports complete, and did they reported in BTORs and two fully address the obligations under the loan PCRs. agreements? Were there any material issues noted during the No. review of the audited project financial statements and related audit report that have remained unaddressed? 7. Reporting and Monitoring 7.1 Are financial statements and reports prepared Yes Low for the entity?

7.2 Are financial statements and reports prepared Yes, reports prepared, and Low for the implementing unit(s)? subaccounts examined as part of project audit. 7.3 What is the frequency of preparation of financial Monthly, quarterly and annual Low statements and reports? Are the reports prepared in a timely fashion so as to be useful to management for decision making? 7.4 Does the entity reporting system need to be Yes, to record external funds Low adapted for project reporting? source and counterpart funds.

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Topic Response Risk 7.5 Has the project established financial Yes, per PAM TOR. Low management reporting responsibilities that specify the types of reports to be prepared, the report content, and purpose of the reports?

7.6 Are financial management reports used by Yes, for progress monitoring and Low management? reporting to project steering committee. 7.7 Do the financial reports compare actual Yes. Low expenditures with budgeted and programmed allocations? 7.8 How are financial reports prepared? Are Peachtree software, spreadsheet Low financial reports prepared directly by the based. automated accounting system or are they prepared by spreadsheets or some other means? 7.9 Does the financial system have the capacity to Yes. There is a weighted system Low link the financial information with the project's tracking physical progress vs. physical progress? If separate systems are time and resources elapsed used to gather and compile physical data, what (disbursement). controls are in place to reduce the risk that the physical data may not synchronize with the financial data? 7.10 Does the entity have experience in Yes. United National World Low implementing projects of any other donors, co- Tourism Organization, and financiers, or development partners? nongovernment organizations.

8. Information Systems 8.1 Is the financial accounting and reporting system Yes. Currently using Excel Low computerized? spreadsheets and Peachtree accounting software. 8.2 If computerized, is the software off-the-shelf, or Off the shelf. Low customized? 8.3 Is the computerized software standalone, or Stand alone but methods Moderate risk of integrated and used by all departments in the harmonized. inaccurate data headquarters and field units using modules? entry. 8.4 How are the project financial data integrated Manually. Moderate. with the entity financial data? Is it done through a module in the enterprise financial system with automatic data transfer, or does it entail manual entry? 8.5 Is the computerized software used for directly Peachtree can, but Excel being Low generating periodic financial statements, or used for this. does it require manual intervention and use of Excel or similar spreadsheet software? 8.6 Can the system automatically produce the Yes. Low necessary project financial reports? 8.7 Is the staff adequately trained to maintain the Yes. Low computerized system? 8.8 Do the management, organization and Yes. Password protected Low processes and systems safeguard the computers/ accounts in a secure confidentiality, integrity and availability of the government office. data? 8.9 Are there back-up procedures in place? Yes, basic. Low 8.10 Describe the backup procedures – online External drive storage and Low storage, offsite storage, offshore storage, fire, securely filed backup hard earthquake and calamity protection for backups. copies.

439 Appendix 16 Annex 2. Project Management Structure

ADB Government of Cambodia GMS Tourism Sector Ministry of Economy and Finance Working Group

MOT National Project Executing Agency Steering Committeea;b

MOT Tourism Investment Consulting Services Department (TID)

a

PCU Tourism Team Kep DOT Preah Sihanouk DOT IA/PIU Outputs 2 & 3c

Infra DM Infra DM Teamd Team Teamd Team

Outputs Output Output Output Output 1 3 1 3

Output delivery Coordination/Support

Funds Flow Arrangements

Advance /

replenishments MEF ADB Pass-through Account Advance / replenishment / liquidation requests Advance / replenishments Advance / replenishment / liquidation requests Advance account Payments Direct ADB PCU payments Project Advance Account

Advance / Advance / replenishment / replenishments liquidation requests Sub-account Suppliers, contractors Payments Provincial-level PIUs and consultants Project Subaccount(2 accounts)

Fund flow

ADB = Asian Development Bank; MEF = Ministry of Economy and Finance; PCU = project coordination unit;

PIU = project implementation unit.

440 Appendix 17: Institutional Analysis and Infrastructure O&M Arrangements

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 17

TABLE OF CONTENTS

A. Institutional Analysis 443 B. Roles and Responsibilities of Key Agencies 444 1. The Ministry of Tourism 444 2. The Ministry of Public Works and Transport 444 3. The Departments of Tourism and the Departments of Public Works and Transport 445 4. Other Relevant Agencies (Provincial and District Governance) 447 C. Infrastructure Operations and Maintenance 447 1. Kep Province 447 2. Preah Sihanouk Province 449 Annex 1: Project Owners Projected Revenue and Expenditures 452

List of Tables

Table A1.1 Kep Solid Waste Management Revenue and Expenditure 452 Table A1. 2: Preah Sihanouk Department of Public Works and Transport Revenue and Expenditure Projections 453 Table A1. 3: Preah Sihanouk City – Koh Rong Passenger Piers Revenue and Expenditure 454

442 Appendix 17

INSTITUTIONAL ANALYSIS AND INFRASTRUCTURE O&M ARRANGEMENTS CAMBODIA

A. Institutional Analysis

1. The political system in Cambodia is a constitutional monarchy whereby the Prime Minister is the head of government and the Monarch the head of state. The Kingdom operates according to the nation's Constitution (enacted in 1993) in a framework of a parliamentary, representative democracy. Executive power is exercised by the government. Legislative power is vested in the two chambers of parliament, the National Assembly and the Senate.

2. Ministries retain policy and regulatory control over the provincial and municipal governments. Decentralization is still at an early stage and responding the Strategic Framework for Decentralization (2005) and the promulgations of the Law on Administrative Management and the Law on the elections of Councils. Institutional reforms related to official development assistance management are ongoing and this includes the 2012 “Procurement Manual and Standard Operation Procedures for all Externally Financed Projects/Programs in Cambodia”. The organization of provincial and municipal governance has been reformed to provide more independence, but the technical administrations remain largely under the corresponding line ministry, such that strong local governance and leadership is necessary to ensure good balance for the process of decentralization. Provincial departments, such as Tourism and Public Works and Transport, are effectively placed under the dual supervision of both their provincial Governors and the line ministries.

3. A role for the private sector in the development and management of urban infrastructure is encouraged by the Government. The legal context for developing public- private partnerships is specified in the “Law on Concessions – 2007”, whereby the Ministry of Economy and Finance (MEF) is the responsible agency. The importance of PPP and other forms of private sector investment in urban/tourism infrastructure is relevant to the project, in solid waste management for instance where the role of private operators is already well established.

4. There are some 20 provincial and 4 municipal administrations in Cambodia. There are three different levels of municipalities: (i) cities, with populations more than 50,000, including Preah Sihanouk ; (ii) towns, with populations more than 10,000; and (iii) provincial capitals, including Kep. In the rural areas, the first-level administrative divisions are the provinces, but in the urban areas they are the municipalities. Since 2002 commune-level governments (commune councils) have also been formed, composed of members directly elected by commune residents every five years. Members of provincial governments are appointed by the central government and make submissions to the central authorities for a share of the national budget. Additionally, they have local tax administration responsibilities.

443 Appendix 17

B. Roles and Responsibilities of Key Agencies

5. The roles and responsibilities of key agencies concerned with the design, implementation and management of this project are described below.

1. The Ministry of Tourism

6. The Ministry of Tourism (MOT) is responsible for overseeing all aspects of tourism development in Cambodia. Tourism is identified as one of the priority sectors to support economic growth in the country and the MOT therefore has a pivotal role to play in development and progress. The MOT is organized into five main directorates: (i) Administration and Finance; (ii) Tourism Development and International Cooperation (TDIC); (iii) Tourism Industry Management; (iv) National Institute for Tourism; and (v) Marketing and Tourism Promotion. There are 618 professional and technical staff in MOT, of which 64% are males and 36% are females. MOT also manages 20 provincial and 4 municipal Departments of Tourism (DOTs) across the country.

7. The range of tourism development activities covered MOT are reflected in the TDIC directorate which includes the following departments: (i) Planning and Development; (ii) Tourism Investment; (iii) Tourism Industry; (iv) International Cooperation and ASEAN; and (v) Marketing and Promotion. The TDICD was responsible for producing the National Tourism Strategic Plan (2012-2020) which has been adopted by Government and provides a blueprint for sector development.

8. Project preparation was led by the TDIC’s newly established Department of Tourism Investment (DTI). The DTI has 25 professional and technical staff of which 76% are male and 24% female. 7 staff have masters degrees, including 2 with civil engineering qualifications. Of the remaining 17 department staff, 15 are 1st degree holders.

9. MOT staff have varying levels of experience in managing internationally financed projects. TID staff, including those managing preparation of the proposed project, have successfully executed several projects, including three financed by ADB. One of those is the ongoing Greater Mekong Subegion (GMS) Tourism Infrastructure for Inclusive Growth Project (ADB Loan 3194-CAM).

2. The Ministry of Public Works and Transport

10. The Ministry of Public Works and Transport (MPWT) is the government institution tasked to "Build, maintain and manage all the transportation infrastructure such as roads, bridges, ports, railways, waterways and buildings" in Cambodia. Below the Minister, the Secretary and the Under Secretary of State, the Ministry manage three general directorates: administration, transport and public works.

11. The General Directorate of Administration is headed by a Director General and two Deputy Directors, managing four departments:(i) Administration; (ii) Personnel and Human Resources; (iii) Accounting and Finance; and (iv) Planning. The General Directorate of Public Works is led by a Director General and two Deputy Directors, managing five departments: (i) Roads; (ii) Heavy Equipment; (iii) Technical Research; (iv) Inland Waterways; and (v) Public Infrastructure Engineering. The General Directorate of Transport is led by a Director General and two Deputy Directors managing (i) Land Transport; (ii) Water Transport: and (iii) Merchant Marine Transport. The two main port authorities of

444 Appendix 17

Cambodia, the Port Authority of Preah Sihanouk and the Port Authority of Phnom Penh, are overseen by MPWT. Like MOT and other ministries, MPWT also manages 20 provincial and 4 municipal Public Works and Transport Departments (DPWTs) throughout the country, including those in Kep and Preah Sihanouk municipalities.

12. MPWT’s General Directorate of Public Works participated in project preperation, specifically advising on preliminary engineering designs and infrastructure O&M options. Durng implementation, an Infrastructure Project Management Unit will be estaboished in DPWT to oversee civil works detailed design, construction, commissioning, and asset handover to provincial governments.

13. All MPWT departmernts have significant experience managing externally and internally financed public works projects and experience directly providing services such as roads and land drainage, solid waste collection and management of landfill facilities, and as noted above, ports management. MPWT and Provincial Department of Public Works and Transport (DPWT) staff have adequate capacity to backstop the non-complex civil works design, procurement and supervision envisaged under the project.

3. The Departments of Tourism and the Departments of Public Works and Transport

14. DOTs act as the tourism sector agencies of Kep and Preah Sihanouk provincial governments. They advise and assist the administration in fulfilling their functional responsibilities with respect to tourism activities. The functional responsibilities of the DOTs broadly mirror those of MOT and as the name implies are more focused on a role which encompasses the planning and development of tourism resources, destinations, attractions, routes and tours, as well as business travel, promotion and international cooperation, all of which will have province and municipality-specific aspects and interpretation. However, DOTs are largely dependent on MOT planning directions regarding staffing, project management, and finance.

15. The DOTs implement provincial directives and are also tasked with implementing the policies, projects and programs of central government coursed through MOT. Thus, aside from considerations of technical capacity and capability, the effective operations of all DOTs rely on a high level of collaboration and cooperation between MOT at the central level and the respective provincial and municipal administrations to agree on common development objectives and priorities.

16. DOTs have experience administering/implementing ADB-financed projects. However, due to staff turnover and inconsistent capacity among incumbent staff, they require significant capacity building to ensure good project management, destination management, and O&M of project facilities.

17. Kep DOT has 5 divisions/offices: (i) Administration, Personal, Finance and Inspection; (ii) Tourist Industry Management, Women and Children Safety; (iii) Education and Training; (iv) Tourist Community and Cultural Development Planning; and (iv) Tourism Market Studies and Promotion. It has 15 staff, of which 12 are professional and technical and 3 are administrative/financial. 60% of the staff are male and 40% are female. Most staff have less than 10 years working experience (66%) with DOT. 3 staff members have masters degrees and 11 have 1st degrees. This includes qualifications in business administration and

445 Appendix 17 tourism. Some staff have participated in training courses in tourism promotion, engineering, planning, administration/business management, finance and accounting and English. Further skills development in destination management and ASEAN standards implementation are requested.

18. Preah Sihanouk DOT has 9 divisions/offices: (i) Administration, Personal, Finance and Inspection; (ii) Tourist Industry Management, Women and Children Safety; (iii) Education and Training; (iv) Tourist Community and Cultural Development Planning; (iv) Tourism Information, Market Studies and Promotion; (v) Tourism Guide Management; (vi) Education and Training; (vii) Beach Resort Management; (viii) Preah Preah Sihanouk City; and (ix) Prey Nap District. DOT has 42 staff, of which 38 are professional and technical and 4 are administrative/financial. 65% of staff are male and 35% are female. Most of the staff have less than 10 years working experience (62%) with DOT. 4 staff members have masters degrees and 18 have 1st degrees. Some members staff have participated in training courses on administration/business management and finance and accounting. Further training is requested in PPP development for the proposed ferry piers and other tourist attractions, destination management, and ASEAN standards implementation are requested.

19. Kep DPWT will take primary responsibility for O&M of project-financed facilities, while the Provincial Department of Environment is anticipated to focus on environmental safeguards and monitoring. There are 4 overarching divisions in DPWT: (i) Administration/Personnel; (ii) Planning/Accounting; and (iii) Public Works; and (iv) Transport. Project-relevant work units include the: (i) Ports and Waterways Unit; (ii) Water, Sewage and Wastewater Treatment Unit; and (iii) Public Works Order Management Unit. In addition, there is a City/District Office of Public Works and Transport. Altogether DPWT has 36 professional and technical staff, with expertise in municipal and civil engineering, procurement, finance and accounting. 78% of staff are male and 22% are female. None of the 4 divisions, or the supporting units have female leadership. 9 of the professional/technical staff have masters degrees and 16 have 1st degrees. Selective members of staff have participated in training courses specifically related to engineering, administration/business management, finance and accounting. Further skills development in landfill O&M and PPP development to optimize solid waste collection and landfill management are requested.

20. Preah Sihanouk DPWT has 11 primary divisions: (i) Administration/Personnel); (ii) Accounting/Procurement; (iii) Planning and Information Technology; (iv) Technicality; (v) Public Works; (vi) Public Works Order Management; (vii) Water, Sewage and Wastewater Treatment Station; (viii) Transport; (ix) Logistics and Land Traffic Safety; (x) Maritime Transport and Ports; and (xi) City/District PWT Units, including Preah Sihanouk City, Prey Nup District, Steung Hav District and Kampong Seila District. Altogether DPWT has 77 professional and technical staff, with expertise in municipal and civil engineering, procurement, finance and accounting. 78% of staff are male and 22% are females. 39% of the staff have less than 10 years working experience and 20 staff have more than 30 years of experience. 15 of the professional/technical staff have masters degrees and 22 have 1st degrees. Some staff have participated in training courses related to engineering, administration/business management, finance and accounting. Further skills development in ferry piers management and beachfront maintenance and associated PPP opportunities are requested.

446 Appendix 17

4. Other Relevant Agencies (Provincial and District Governance)

21. Other relevant agencies that will have a direct role in project implementation and project management in provinces are: (i) Departments of Economy and Finance (DEF), (ii) Departments of Planning (DOP); (iii) Departments of Land Management, Urban Planning and Construction (DLMUPC); and (iv) Departments of Women’s Affairs.

C. Infrastructure Operations and Maintenance

22. The following section outlines the proposed institutional responsibility and financing for O&M relevant to output 1 infrastructure subprojects. It assumes that O&M for the subprojects will continue to be the responsibility of the existing management entities, which are established at provincial and municipal level, with support from MOT/MPWT.

23. Private sector involvement will be sought for (i) operating the passenger piers in Preah Sihanouk and Koh Rong, and (ii) garbage collection in Kep, potentially through a service contract with the DPWT, and possibly landfill management under the same contract.

1. Kep Province

24. Kep Solid Waste Management Improvements. Under the overall supervision of MPWT’s Infrastructure PMU, the Kep Civil Works Team headed by a senior DPWT staff member will be responsible for managing the design and supervision of civil works and installment of equipment for the new managed landfill and solid waste collection services.

25. Subproject Description. Kep province is located on Cambodia’s southern coast. It received 1.1 million tourists in 2016 and forecasts suggest visitor arrivals could rise to 1.8 million in 2026. The proposed landfill site is in an undeveloped rural area, approximately 8 km north-west of Kep town. An unpaved track links the site to National Road 33 near Domnak Chong Oeu market. The existing arrangements for solid waste management in Kep are inadequate, characterized by low coverage, lack of sanitation awareness, and an open, unmaintained dumpsite. The subproject will address these problems by expanding the quality and coverage of solid waste collection and treatment services, develop a managed landfill site (9ha) on public land, and support sanitation and waste management awareness programs.

26. Subproject components include: (i) preparatory earthworks and installation of a perimeter runoff interceptor drainage system; (ii) construction of an impermeable liner, leachate collection/treatment system, and a landfill gas recovery system; (iii) construction of a small materials recovery facility for waste separation and recycling; (iv) construction of a medical waste treatment area; (v) construction of a septage treatment facility (0.5ha); and (vi) construction of site office, toilets, and fencing. The landfill access road (3 km) will be paved with concrete (6m carriageway and verges) to accommodate collection trucks and other vehicles. On-site equipment will include 3 new 10 cubic meter collection trucks, bulldozer, and two vacuum trucks to support septage collection. Sanitation and waste management awareness programs will be supported under output 3 capacity building programs. The subproject will benefit the Kep’s urban core (Sangkat, Sangkat Kep and around half of Sangkhat Prey Thom) with a residential population of 9,000, 95 hotels, and 52 restaurants/cafes, and various other commercial outlets.

27. Landfill Operations and Maintenance. Upon works completion the DPWT will be

447 Appendix 17 responsible for O&M of the improved landfill site, including: (i) overall site maintenance and site operations; (ii) the collector drainage system and all related civil works; (iii) the leachate treatment and landfill gas recovery facility; (iv) the septage treatment facility; (v) the materials recovery facility–waste sorting and recycling; and (vi) the 3km access road. They will also be responsible for (i) on-site worker facilities and related utilities and services provided for the security guards (ii) perimeter security fencing for both the new site and the existing dump site; and (iii) a security system.

28. O&M for the managed landfill site will require additional technical/management staff support. The project will support training in all technical aspects of site operations including: (i) overall site maintenance and site operations management; (iii) the leachate treatment and landfill gas recovery facility operations; (iv) the septage treatment facility; (v) the materials recovery facility – waste sorting and recycling operations; and (vi) waste pickers and waste picker operations. The training program will be available to the technical/management team stationed at the managed landfill site and to staff from the solid waste collection service operators, both government staff and private contractors. The training program will be implemented over a minimum five-year period, incorporating a performance monitoring and re-training process at regular intervals geared to a sustainable landfill for the long-term.

29. Solid Waste Collection Services. Solid waste collection and transportation to the landfill is currently the responsibility of Yav Sang Service Provider. The service provider operates under an annual service contract with Kep municipality. This short contract duration undermines good service provision and long-term investment by the contractor. Solid waste collection is currently concentrated on the core tourist areas of Kep municipality only. For other areas, the municipality collects waste ad-hoc from transfer points which are used casually by the community. There is currently no formal tariff rate for solid waste collection from the households, restaurants guesthouses or hotels. Yav Sang Service Provider recovers garbage collection costs by administering parking fees in Kep as part of its annual contract.

30. Kep municipality proposes to extend coverage of the official refuse collection service to 1,529 households and all businesses starting in 2022, with collection vehicles and other equipment to be supplied by the project. The municipality will explore extending the service contract duration to 5 years or more through competitive procurement once the project is implemented, with a new tariff structure. The socioeconomic survey conducted during project preparation indicates 94.7% of households are willing to pay at least KR4,500 per month for solid waste collection services.

31. The financial sustainability of landfill O&M was evaluated based on the revenues that could be generated through the collection of garbage fees from residential and commercial establishments and environment fees from international and domestic visitors. The assumed collection fee is $1.11 (KR4,500) per household, per month. The assumed environment fee, to be collected through a hotel room surcharges, is KR4,050 for international visitors and KR2,025 for domestic visitors. In 2017, the total number of tourist arrivals in Kep Province was 1.16 million, 95% of which were domestic tourists. The number of tourist arrivals is assumed to increase by an average of 5.5% from 2017-2022, 4.7% in 2023-2030, 3.1% in 2031-2040 and 1.4% in 2041-2049. Incremental routine maintenance cost for the subproject’s facilities is estimated at KR168 million starting 2022 and will increase by 3% every year. Periodic maintenance is KR295 million every 7 years.

448 Appendix 17

32. Collection fees total KR165 million in 2022. Environment fees total KR325 million in 2022 and increase each year in line with projected tourist growth. This is sufficient to cover collection costs and landfill O&M, leaving a net surplus each year. The provincial government will appropriate funds to support landfill O&M, including all on-site infrastructure and facilities, through DPWT. Annex 1 (Table A1.1) presents the revenue projections for 2022-2049.

33. The subproject’s viability was further validated against the resulting 12.6% financial internal rate of return, which is higher than the 10.6% weighted average cost of capital. The subproject’s base case net present value is KR5,202 million. Detailed financial projections are discussed and presented in the Financial Analysis.

34. Public Utilities and Services. Kep Power Supply will supply power to the landfill site. On-site water supply is included in landfill civil works development.

2. Preah Sihanouk Province

35. Preah Sihanouk Seaside Access and Environmental Improvements. Under the overall supervision of MPWT’s Infrastructure PMU, and in close coordination with the PCU, Preah Sihanouk civil works team will be responsible for managing the design and supervision of civil works, and instalment of equipment.

36. Subproject Description. Preah Sihanouk Province received 2.1 million visitors in 2016 and forecasts suggest visitor arrivals could rise to 3.5 million in 2026. Weak planning and ad hoc development of Ocheuteal and Otres beaches has led to poor pedestrian access, traffic congestion, unsanitary drainage with intermittent flooding, and lack of public amenities. This situation creates public health hazards for residents and tourists, deters private investment, and puts future tourism growth at risk.

37. The subproject will address these problems by: (i) improving landscaping and install street lighting along Ocheuteal beach road (1.2 km north-western section); (ii) improving a 1.75 km section of Ocheuteal beach road to asphalt pavement; (iii) improving a 0.34 km section of Ocheuteal Beach Road to concrete pavement; (iv) improving the 0.2 km, 3.5 meter wide footpath that connects Ocheuteal and Otres beach to concrete pavement with lighting; and (v) improve the existing Otres beachfront road and crossroads (4.0 km) to concrete pavement. All roads will be upgraded to a minimum carriageway width of 8m with 3.5m footpaths/cycle track, roadside drainage, and street lighting. The improvements at both beaches will incorporate 12, 35m2 public showers and toilet blocks. Subproject implementation will be coordinated with the ADB-financed Provincial Water Supply and Sanitation Sector Project to ensure that all road improvements are properly sequenced with planned installation of wastewater pipeline, pumping stations, and residential connections. The subproject will benefit 41 hotels with 2,167 bedrooms, and 240 restaurants, and 12,878 residents.

38. Road and Facilities Operations and Maintenance. DPWT will be responsible for O&M of the upgraded roads and walkways, drains, streetlights, parking areas and toilets. DPWT maintenance responsibility includes vehicles and infrastructure-servicing equipment purchased by the project.

39. Based on the engineering study, routine maintenance is calculated at KR39 million

449 Appendix 17 per year after completion of the subproject in 2021 and will increase by 3% per annum in real terms. This will be offset by DPWT’s income from licensing existing and planned tourism facilities (e.g. beachfront restaurant owners) and income from tourist bus and car parking fees.

40. Preah Sihanouk DPWT’s historical income and expenditure statements show that its operating income comes mostly from the provincial budget. Budgetary appropriations were about KR 1,879 million per year, on average (80%of the annual budget). Operating income grew annually by 33% on average during the past 5 years. Operating expenditure comprises salaries, fuel, maintenance, and miscellaneous staff travel. Maintenance cost for buildings and equipment was 11% of the total expenditure, while salaries were about 77%. The operating expenditure growth rate was 33% per year while operating surplus had an average growth rate of 26% per year.

41. To assess Preah Sihanouk DPWT’s financial capacity to maintain the subproject roads and facilities, its income and expenditure were projected over a ten-year period, 2018- 2027. Annual subproject routine O&M is estimated at KR39 million starting in 2022 and assumed to increase by 3% per year. Periodic maintenance is KR28 million every 7 years. Based on these estimates, DWPT will have sufficient funds to maintain the subproject roads, drainage and footpaths along the Occheuteal and Otres beaches. Even with the additional O&M costs it will incur for the maintenance of these facilities, DPWT will still have an operating surplus of about KR 1,071 million starting in 2022. The ratio of the additional maintenance cost to total operating expenditure is 1.2%–1.9%. Annex 1 (Table A1.2) presents the revenue and expenditure projections.

42. Public Utilities and Services. Mains water supply to the subproject area will be provided and maintained by Anco Water Supply Co Ltd. Solid waste collection and transportation to the landfill will be the responsibility of Cintri Ltd. Electricite du Cambodge will supply the power.

43. Preah Sihanouk City-Koh Rong Passenger Pier Improvements. Under the overall supervision of MPWT’s Infrastructure PMU, in close coordination with the PCU, the Preah Sihanouk civil works team will be responsible for managing the design and supervision of civil works and instalment of equipment.

44. Subproject Description. The two passenger piers are located at Victory Beach, Preah Sihanouk City; and Koh Touch village, the main gateway to Koh Rong Island. Koh Rong received about 300,000 visitors in 2016 and this could increase to more than 496,000 in 2026. Since the introduction of fast ferry services in 2012 the number of trips between Preah Sihanouk City and Koh Rong has increased to 7,400 per year (2016) and is expected to reach over 12,000 by 2026. The existing passenger piers are inadequately constructed and easily overwhelmed by a surge in passengers during peak periods, and lack sanitation and adequate parking. This causes congestion, hazardous conditions for passengers and boat operators, and negatively impacts the shorefront environment.

45. The subproject will address these problems by constructing a new concrete pier with associated facilities at Victory Beach on vacant government-owned land (4,000 m2) that is reserved for this purpose. Victory Beach Pier will incorporate ticketing/waiting areas, food and beverage service facilities, toilets, and vehicle parking. The new concrete pier in Koh Touch will have ticketing/waiting area facilities, sanitation, tourist information and retail

450 Appendix 17 kiosks. The subproject will benefit residents and ferry operators, and associated business operators. 438,000 passengers are expected during the first year of operation.

46. Operations and Maintenance of the Piers. Upon commissioning, the piers and associated assets will be handed over to Preh Sihanouk provincial government, who will establisth a Pier Management Committee comprising the Provincial Governors Office, DPWT, DEF, DOT, and DOE. The project will support preparation of a feaseability study to determine optimal lease/management contracting arrangements for private sector ferry service deleivery, retail services, parking, and other services. Management/lease contracts will be competitively procured.

47. DPWT’s maritime transport and ports division will regulate all navigational and marine safety requirements, including the design and implementation of an O&M plan that includes a navigation plan. DPWT, as the public asset manager, will be responsible for supervising maintenance of the pier structures and associated facilities, including navigational equipment, the pier buildings (e.g. ticketing office, café and toilets), access roads and paths, and vehicle parking area. The provincial government will finance O&M costs through DPWT’s annual budgetary appropriation.

48. Preah Sihanouk DOT will assume responsibility for regulating tourism services at the piers. They will devise a plan to ensure convenience and safety for passengers.

49. The financial projections presented in Table A3.1 show passenger departure fees, berthing fees, parking fees and rental of kiosks and stalls will generate sufficient revenue to cover the O&M of both piers. Baseline data (2016) for domestic and international tourists is 298,601 and is forecast to increase by 5.8% in 2017-2022, 4.8% in 2023-2030; 3.1% in 2031-40 and 1.4% onwards. The passenger departure fee is KR5,063 per passenger. The berthing fee is computed based on the number of boat trips at KR4,050 per one-way trip. The parking fee is estimated to be about KR2,025 per vehicle, while kiosks and stall rentals are computed based on KR81,000 per square meter of rentable space per month.

50. The baseline annual routine O&M cost is KR13 million and assumed to increase by 3% per year starting 2023. Periodic maintenance is additional KR1 million every 7 years. Total revenue is estimated to be KR2,401 million in 2023 showing the subproject can fully cover O&M costs. The viability of the project is further validated by the resulting FIRR of 11.9% which is higher than the WACC at 10.6%. Detailed financial projections are discussed and presented in the Financial Analysis.

51. Public Utilities and Services. Mains water supply to the Victor beach pier will be provided and maintained by Anco Water Supply Co Ltd. Solid waste collection and transportation to the landfill will be the responsibility of Cintri Ltd, Electricite du Cambodge will supply the power. For the proposed ferry pier at Koh Touch water supply will be the responsibility of Srun Sreyoun Service Provider. Solid waste collection and transportation to the landfill will be responsibility of Koh Rong Dive Center. Srun Sreyoun Service Provider manages power supply to the Koh Rong pier.

451 Appendix 17

Annex 1: Project Owners Projected Revenue and Expenditures Table A1.1 Kep Solid Waste Management Revenue and Expenditure 2022 2023 2024 2025 2030 2035 2040 2045 2049 Population (Kep town) 9,555 9,778 10,006 10,239 11,488 12,891 14,464 16,230 17,796 Number of households 1,911 1,956 2,001 2,048 2,298 2,578 2,893 3,246 3,559 Coverage area 80% 80% 80% 80% 80% 80% 80% 80% 80% Covered households 1,529 1,564 1,601 1,638 1,838 2,063 2,314 2,597 2,847 Revenues Garbage collection fee (KR million) Households 83 84 86 88 99 111 125 140 154 Businesses 83 84 86 88 99 111 125 140 154 Subtotal - Garbage fees 165 169 173 177 199 223 250 280 308 Environmental fee Number of visitors International visitors ('000) 74 77 81 84 106 124 144 154 156 Domestic visitors ('000) 1,440 1,508 1,578 1,651 2,074 2,417 2,817 3,014 3,055 Total visitors 1,514 1,585 1,659 1,736 2,180 2,541 2,961 3,168 3,211 Environmental fee revenue (KR million) International visitors 298 312 327 342 429 500 583 624 632 Domestic visitors 2,917 3,053 3,195 3,344 4,200 4,895 5,705 6,104 6,187 Subtotal - Environmental fees 3,215 3,365 3,522 3,686 4,629 5,395 6,288 6,728 6,819 Total revenue 3,381 3,534 3,695 3,863 4,828 5,618 6,538 7,008 7,127 Recurrent O&M (KR million) Routine 168 173 178 183 212 246 285 331 372 Periodic ------Subtotal O&M 168 173 178 183 212 246 285 331 372 Net income (KR million) 3,213 3,361 3,517 3,680 4,615 5,372 6,253 6,677 6,754 Source: PPTA Consultant’s estimates.

452 Appendix 17

Table A1. 2: Preah Sihanouk Department of Public Works and Transport Revenue and Expenditure Projections 2022 2023 2024 2025 2026 2027 2028 2029 2030 Revenues (KR million) 3,991 4,191 4,401 4,621 4,851 5,094 5,349 5,616 5,897 Allocation from provincial government 3,155 3,313 3,479 3,653 3,835 4,027 4,228 4,440 4,662 Non-tax income 836 878 922 968 1,016 1,067 1,120 1,176 1,235 Expenditures 2,881 3,026 3,177 3,336 3,503 3,677 3,861 4,054 4,257 Salary 2,389 2,509 2,634 2,766 2,904 3,049 3,201 3,362 3,530 Fuel/equipment/office supplies/electricity 169 178 187 196 206 216 227 238 250 Local travel in Cambodia 74 78 82 86 90 94 99 104 109 Maintenance (car, equipment, & buildings) 249 261 274 288 303 318 334 351 368 Operating Surplus (KR million) 1,110 1,165 1,224 1,285 1,348 1,417 1,488 1,562 1,640 Subproject maintenance cost (KR million)

Routine 39 40 41 42 43 45 46 47 49 Periodic 0 0 0 0 0 0 0 28 0 Subtotal 39 40 41 42 43 45 46 76 49 Balance (KR million) 1,071 1,125 1,183 1,243 1,305 1,372 1,442 1,486 1,592 Subproject maintenance to total budget ratio 1.3% 1.3% 1.3% 1.3% 1.2% 1.2% 1.2% 1.9% 1.1% Source: PPTA Consultant’s estimates.

453 Appendix 17

Table A1. 3: Preah Sihanouk City – Koh Rong Passenger Piers Revenue and Expenditure 2023 2024 2025 2030 2035 2040 2045 2050 Preah Sihanouk City - Koh Rong ferry service Ferry trips 10,868 11,387 11,931 15,065 17,571 20,493 21,941 22,243 Average passengers per vessel 40 40 40 40 40 40 40 40 Passenger trips 438,732 459,681 481,630 608,137 709,283 827,253 885,711 897,889 International 312,051 326,932 342,521 432,357 504,112 587,775 629,111 637,720 Domestic 126,681 132,749 139,109 175,779 205,172 239,479 256,600 260,169 Average cars parked per day 5 5 5 7 8 9 10 10 Revenues (KR million) Preah Sihanouk ferry pier operation Total revenue 1,206 1,260 1,317 1,645 1,907 2,212 2,364 2,395 Passenger departure fee 1,111 1,164 1,219 1,539 1,795 2,094 2,242 2,273 Berthing fees 22 23 24 31 36 41 44 45 Parking fees 4 4 4 5 6 7 7 7 Rental of stalls and kiosks 70 70 70 70 70 70 70 70 Koh Touch ferry pier operation Total revenue 1,195 1,249 1,305 1,632 1,893 2,198 2,349 2,380 Passenger departure fee 1,111 1,164 1,219 1,539 1,795 2,094 2,242 2,273 Berthing fees 22 23 24 31 36 41 44 45 Stalls and kiosks rental 62 62 62 62 62 62 62 62 Total revenue 2,401 2,509 2,623 3,277 3,800 4,410 4,712 4,775 Expenditures (KR million) Pier O&M 13 13 14 17 18 21 25 28 Net Income (KR million) 2,388 2,496 2,509 3,260 3,782 4,389 4,688 4,747 Source: PPTA Consultant’s estimates.

454 Appendix 18: Public Private Partnership Opportunity: Sihanoukville – Koh Rong Passenger Piers

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FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

455 Appendix 18

A. Introduction

1. The Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project will help transform secondary towns into economically inclusive, competitive international tourism destinations by improving road and water transport infrastructure, urban environmental services, and capacity to sustainably manage tourism growth. The project is scheduled for approval in 2018 and is expected to be implemented over five years.

2. Recognizing the need to modernize tourism transport facilities and services in Cambodia’s Coastal Zone, the Ministry of Tourism has identified several public infrastructure investments in Sihanoukville for prospective project financing. This brief provides an overview of the proposed Sihanoukville–Koh Rong Passenger Piers Improvement subproject and opportunities to enhance ferry services and other tourism services at the piers through public-private partnerships.

B. Existing Situation

3. Sihanoukville has several offshore islands. Koh Rong receives the most tourists, with many resorts and restaurants, water-based activities and pristine beaches. The ferry trip between Sihanoukville and Koh Rong takes about 45 minutes for fast boats and about 1.5 hours for slower boats. Koh Rong’s main disembarkation point is Koh Touch village.

4. There are two piers in Sihanoukville that offer ferry services to Koh Rong. The main government-owned pier is at the north-western end of Ochheuteal beach. This has limited vehicle access and lacks parking and toilets. It was constructed when demand for ferry services was much lower and the surrounding area was less densely populated. It is now severely congested at peak periods and unable to operate when the sea is rough. The second pier is at Victory Beach, close to the provincial government offices and Sihanoukville Autonomous Port. This pier is structurally unsound and lacks supporting facilities.

5. Koh Rong has three small piers in Koh Touch. One is government owned and the other two are privately owned. All lack adequate safety features and become congested at peak periods. The ageing government pier’s wooden piles and structures are deteriorating. All three piers lack sanitation and are often crowded with traders, fishers, and small shops.

6. Since the introduction of fast ferry services in 2012 the number of boat trips between Sihanoukville and Koh Rong has increased rapidly. There were 7,400 trips in 2016 and with suitable facilities, this could double by 2026. Piers in Sihanoukville and Koh Rong served about 300,000 passengers in 2016. With the proposed new piers, this could increase to about 530,000 in 2026 and 770,000 in 2026. There are now four licensed companies offering regular ferry services to Koh Rong: (i) Speed Ferry Cambodia, (ii) Buva Sea Ferries, (iii) GTVC, and (iv) Island Speed Ferries. All have boats with 50 to 150 passenger capacities. Currently they all charge the same single-journey ticket price: $10.00.

7. The main government-owned pier in Sihanoukville at Ochheuteal Beach is maintained by Preah Sihanouk Department of Public Works and Transport (DPWT). DPWT awards a 5-year contract to a private firm, permitting them to collect berthing fees/rent from ferry boat operators and commercial enterprises that use the pier. Management and operation and maintenance (O&M) responsibilities for the dilapidated pier at Victory Beach are unclear. Koh Touch’s government-owned pier is community-managed with ad-hoc fee collection and O&M responsibility. Koh Touch’s private pier owners charge ferry boats ad- hoc landing fees and rent space to vendors.

456 Appendix 18

C. Proposed Investment

8. There is a need for new purpose-built, climate resilient public piers to accommodate rapidly growing year-round demand and ensure passenger safety. The project proposes to address this need by financing the following:

Sihanoukville: construct new concrete and steel pier at Victory Beach on property owned by the provincial government and Ministry of Tourism. To include a 90m pier protected from wind and waves, road access, parking, toilets, 4 commercial units (120 m2 total) and shaded 180 m2 waiting area, 130 m2 ticket office and tourist information center, and pier management office.

Koh Rong: construct new concrete and steel pier at the south end of Koh Touch on property owned by the provincial government. To include an 80m pier protected from wind and waves, 75 m2 ticket office and 75 m2 waiting area with toilets, and 3 commercial units (48 m2 total).

9. The estimated capital costs of the two new piers is $2.86 million. O&M planning and capacity building, preparation of a navigation management plan, and tourism-related service training are also included in the proposed project’s budget. The following benefits are expected: (i) increased job and income generating opportunities from year-round ferry operations and related services, (ii) better safety and comfort for residents and tourists, and (ii) better environmental management of the piers and related facilities.

10. An initial environmental examination, environmental management plan, and preliminary engineering designs for the proposed piers have been prepared separately and are available upon request. The proposed pier’s locations are in Attachment 1.

D. Public Private Partnership Opportunity

11. Consistent with the Government’s Policy Paper on Public-Private Partnerships (2016) the Ministry of Tourism (MOT) is exploring how to engage private entities to provide ferry services, parking, and other services at the piers through public-private partnership (PPP) arrangements.

12. Given MOT has requested Asian Development Bank financing to cover the pier’s capital costs, three PPP options are considered (i) service contracts, (ii) management contracts, and (iii) affermage or lease contracts (Attachment 2).

13. Apart from ferry ticket sales (about $3 million in 2016) the piers could generate the following revenue streams: (i) passenger departure fees, (ii) berthing fees, (iii) vehicle parking fees, and (iv) shop/commercial space rental (Table 1), among others. Considering the scope of potential revenue streams, pier services management contracts offer potential to be competitively procured.

14. Ferry ticketing and passenger departure fee (through a service contract). To efficiently and transparently collect departure fees, all ticketing should be inclusive of (i) travel – payable to the ferry companies and (ii) passenger departure fee – payable to government. Ticketing in this context can be manual or electronic. Electronic ticketing can help ensure passenger trips are recorded accurately and the surcharge is automatically calculated and transferred to government. Ferry owners indicate the departure fee principle is acceptable and they would be prepared to implement the system if government provided new public piers and the technology is reliable. The ferry owners have already formed an association and mutually agreed to charge the same ticket prices. An advantage of the service contract modality is that ferry operators and government have a shared interest to

457 Appendix 18 generate more passenger trips. The assumed $2 surcharge is considered viable given 74% of passengers in 2016 were international tourists. The service contract could be for 1–3 years, as determined by the feasibility study to be prepared during project implementation.

15. Other pier revenue (through affermage of lease contracts). This includes leasing the piers to a private entity to manage day to day pier operations such as ferry berthing, vehicle parking, retail services, and other services. The affermage or lease contracts could be for 10 or more years, as determined by the feasibility study to be prepared during project implementation. The terms would typically include requirements for minor building repairs, waste management, landscape maintenance, vehicle parking area and public toilet maintenance by the contractor. Major structural maintenance would be the responsibility of government, through Preah Sihanouk DPWT.

Table 1: Potential Revenue ($ million)

2023 2028 2035 Sihanoukville Pier Passenger departure fee 0.22 0.28 0.35 Berthing fees 0.01 0.01 0.02 Parking fees 0.01 0.02 0.02 Shop rental 0.02 0.02 0.02 Subtotal 0.26 0.33 0.41 Koh Touch Pier Passenger departure fee 0.22 0.28 0.35 Berthing fees 0.01 0.01 0.02 Shop rental 0.01 0.01 0.01 Subtotal 0.24 0.30 0.38 Total 0.50 0.63 0.79 Note: $2.00 passenger departure fee, berthing fee = $ 2.00 per trip, parking fee = $2.00 per car.

D. Next Steps

16. At the preliminary design stage, the project preparation team supports the Ministry of Tourism’s (MOT) recommendation to include Sihanoukville–Koh Rong Passenger Piers Improvement subproject in the Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project. The national project steering committee, which includes the Ministry of Economy and Finance (MEF), Ministry of Tourism (MOT), Ministry of Public Works and Transport, Preah Sihanouk Department of Tourism, and Preak Sihanouk DPWT should guide preparation of the PPP feasibility study in consultation with Sihanoukville Ferry Association and other local stakeholders.

17. Resources to prepare the feasibility study can be included in the project budget. Terms of reference for a public private partnership specialist and institutional development specialists will be included in the Project Administration Manual.

458 Appendix 18

Attachment 1. Proposed Ferry Pier at Sihanoukville

Proposed Ferry Pier at Koh Touch (Koh Rong Island)

459

Attachment 2. ADB Pubic Private Partnership Handbook – Key Features of Basic Public Private Partnerships

460 Appendix 19: Tourism Demand Analysis and Forecasts

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FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Seond Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 19

TABLE OF CONTENTS I. Introduction ...... 463 A. Project Overview ...... 463 B. Approach and Assumptions ...... 463 II. CAMBODIA ...... 465 A. Tourism Sector Context ...... 465 B. Kep Province ...... 465 a. Tourism in Kep ...... 465 b. Tourism Forecasts for Kep ...... 466 C. Preah Sihanouk Province ...... 468 a. Tourism in Preah Sihanouk ...... 468 b. Tourism Forecasts for Preah Sihanouk ...... 469 c. Forecasts for Output 1 infrastructure subprojects in Preah Sihanouk ...... 469

List of Tables

Table 1: Kep Province Baseline Conditions 2012-2016 ...... 466 Table 2: Kep Province Assumptions for Tourism Forecasts ...... 467 Table 3: Kep Province Tourism Forecasts 2016-2046 ...... 467 Table 4: Preah Sihanouk Province Baseline Conditions 2012-2016 ...... 468 Table 5: Preah Sihanouk Province Assumptions for Tourism Forecasts...... 472 Table 6: Preah Sihanouk Province Tourism Forecasts 2016-2046 ...... 472 Table 7: Preah Sihanouk Province Tourism Forecasts by Subproject 2016-2046 ...... 473

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I. INTRODUCTION

A. Project Overview

1. The proposed project will help transform secondary GMS central and southern corridor towns in Cambodia and the Lao People’s Democratic Republic (Lao PDR) into economically inclusive, competitive international tourism destinations by improving road and water transport infrastructure, urban environmental services, and capacity to sustainably manage tourism growth. It will boost trade in services and deepen regional cooperation and integration among the GMS and Association of Southeast Asian Nations (ASEAN).

2. The project impact is sustainable, inclusive, and more balanced tourism development, as envisaged in the ASEAN Tourism Strategic Plan 2016–2025. The outcome is increased tourism competitiveness of secondary towns in Cambodia and the Lao PDR. Outputs include: (i) urban-rural access infrastructure and urban environmental services improved, (ii) capacity to implement ASEAN tourism standards strengthened, and (iii) institutional arrangements for tourism destination management and infrastructure O&M strengthened. Detailed descriptions of each subproject and component are in the Project Administration Manual

3. Target provinces include Kep and Preah Sihanouk, Cambodia.

B. Approach and Assumptions

4. The methodology adopted for the analysis and forecasts follows ADB guidelines for economic analysis of tourism projects and the approach of similar ADB-financed tourism projects.1 The main purpose is to estimate the incremental tourist arrivals and expenditure created by the project, an important step in the project’s economic analysis.

5. The demand analysis includes tourism profiles of the target provinces, baseline conditions (2016), and forecasts for of key indicators in with- and without project scenarios covering 30-years (2017-2046). The 30-year duration is divided into four periods:

(i) PI = 2017-2022 (the two years prior to and first four years of project implementation); (ii) PII = 2023-2030 (final year of project implementation and first 6-7-year period post project completion);2 (iii) PIII = 2031-2040; and (iv) PIV = 2041-2046.

6. Provincial indicators include international and domestic tourist arrivals, tourism receipts and average tourist expenditure. Assumptions used for projecting provincial indicators are outlined below. Based on these assumptions, province-specific growth rates for international and domestic arrivals, average daily expenditure and average length of stay for with- and without-project scenarios are presented per province in respective sections.

7. General assumptions for projecting provincial tourism indicators:

1 ADB. 2007. ERD Technical Note Series No. 20: Tourism for Pro-Poor and Sustainable Growth: Economic Analysis of Tourism Projects. Manila 2 Project duration in Cambodia will be 5 years (2019-2023) and in Lao PDR 6 years (2019-2024).

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Without-project scenario: o Assumed annual international arrivals growth is based on United Nations World Tourism Organization (UNWTO) forecasts for Southeast Asia3 and historic growth in the respective provinces, as follows: . PI 2017-2022: 2010-2030 UNWTO forecast for Southeast Asia (5.1%) adjusted considering the provincial cumulative annual growth rate (CAGR) 2012-2016. PI annual growth rates range from 3.7% to 5.8%; . PII 2023-2030: 2020-2030 UNWTO forecast (4.3%) adjusted considering PI rate and provincial CAGR 2012-2016. PII annual rates range from 4.3% to 4.4%; . PIII 2031-2040: Annual growth rates range from 2.8% to 2.9%; . PIV 2041-2046: Annual growth rates range from 1.3% to 1.4%; o Assumed growth in domestic arrivals is projected using the same methodology used for international arrivals (see above); o Average length of stay for both international and domestic tourists is assumed to remain at the 2016 baseline level throughout the study period; o Average daily expenditure is conservatively assumed to remain at the 2016 baseline level throughout the study period; o Number of hotel and guesthouse rooms will increase sufficiently to meet capacity requirements to accommodate the projected tourist arrivals.

With-project scenario: o Assumed annual international arrivals growth is incrementally higher than the without-project scenario, as follows: . PI 2017-2022: same as without-project growth projection; . PII 2023-2030: 0.30% higher than without-project growth projection; . PIII 2031-2040: 0.25% higher than without-project growth projection; . PIV 2041-2046: same as without-project growth rate projection for Cambodia (1.36%) and 0.10% higher than without-project growth rate projection for Lao PDR; o Assumed domestic arrival growth is conservatively projected using the same methodology as international arrivals; o Average length of stay for both international and domestic tourists is assumed to remain at the 2016 baseline level until the end of 2022 and conservatively increase by 0.1 day in 2023 throughout the study period; o Average daily expenditure is conservatively assumed to remain at the 2016 baseline level throughout the study period; o Number of hotel and guesthouse rooms will increase sufficiently to meet capacity requirements to accommodate the projected tourist arrivals. o Projected tourist expenditure is presented in constant 2016 prices for the whole study period. A differential inflation rate specific to tourist expenditures is not expected to occur, meaning any change in future prices is in line with general inflation.

8. Assumptions and forecasts by subproject are presented in respective sections below.

3 UNWTO. 2016. UNWTO Tourism Highlights, 2016 Edition. Madrid

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II. CAMBODIA

A. Tourism Sector Context

9. International visitor arrivals in Cambodia rose to 5.01 million in 2016, a 5.0% increase compared to 2015, but growth is slowing. Viet Nam is the largest source market (19.1%), followed by the People’s Republic of China (PRC) at 16.6%, and Thailand (7.9%). The Philippines is the fastest-growing market from a substantial base, increasing by 28% in 2016.4 International tourists stay for 6.3 days and their daily spending is about $102 per day.5 Siem Reap and Phnom Penh are the most popular destinations, but tourism in the coastal zone is growing at 5.4%, just above the national average. The direct contribution of travel and tourism to GDP in 2016 was 12.2%, the highest in ASEAN.6 Cambodia’s Tourism Development Strategic Plan targets 7 million international arrivals, $5 billion international visitor expenditure and 800.000 new jobs by 2020 and prioritizes investment in the following destinations: Angkor Wat and other ancient Khmer sites, Phnom Penh, the southern coastal corridor (Koh Kong, Sihanoukville, Kampot, and Kep), Mekong River and Tonle Sap Lake, and protected areas in the Northeast and Cardamom Mountains.7

B. Kep Province

a. Tourism in Kep

10. Kep Province is on the south-west coast of Cambodia, around 164 km from the capital Phnom Penh. With a population of just over 40,000 (2009) and a land area of 336 km2, it is the country’s smallest province. Kep was established in 2008, after separating from . There is a 16 km of sea coast fronting the Gulf of Thailand. A tiny archipelago of 13 islands and islets are located just off the coast. The province is conveniently accessible by land through Kampot Town.

11. Kep Province is part of the Coastal Zone, comprising four provinces along Cambodia’s 435-kilometer coast line. The others are Koh Kong, bordering Thailand in the west; Sihanoukville, a tourism and commerce hub; and Kampot, bordering Viet Nam to the East. Kep’s main tourist attractions are beaches and colonial-era villas, the crab market and seafood restaurants, Koh Tonsay (Rabbit Island) and Kep National Park. Popular tourist activities are swimming, picnicking, boat excursions around the Kep archipelago, and nature walks in Kep National Park.

12. Kep welcomed nearly 1.1 million tourists in 2016, of which nearly 5% were international (Error! Reference source not found.). This represents a 1.6% increase compared to 2015 (5.3% for international and 1.5% for domestic tourists). Cumulative average growth in arrivals during the period 2012-2016 was 9.7%. Total tourism expenditure in 2016 is estimated to have reached around $90 million, up 2% from 2015. Length of stay of and average daily expenditure were, respectively, 3 days and $75 for international tourists and 1.5 days and $50 for domestic tourists.

13. While growth in international arrivals between 2012 and 2016 was impressive, growth appears to be stagnating, partially as a result of poor and deteriorating environmental conditions, including inadequate wastewater and solid waste management.

4 A substantial base is defined as at least 25,000 annual arrivals from the source market considered. 5 Ministry of Tourism, Cambodia. 2016. Tourism Statistics Report Year 2016. Phnom Penh. 6 World Travel & Tourism Council’s Data Gateway. https://www.wttc.org/datagateway/. 7 Ministry of Tourism. 2012. Cambodia Tourism Development Strategic Plan 2012–2020. Phnom Penh.

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Wastewater management at the popular Crab Market is currently being improved by the ongoing ADB GMS Tourism Infrastructure for Inclusive Growth Project (2015-2019). This, combined with the proposed project’s investment in solid waste management, along with capacity building to improve destination management, will reverse the slowdown in international tourist arrivals and reinvigorate domestic tourism growth.

Table 1: Kep Province Baseline Conditions 2012-2016

Growth CAGR Indicator 2012 2013 2014 2015 2016 2016/2015 2012-2016 (%) (%) Tourist arrivals – Total 757,497 683,536 758,206 1,079,493 1,097,168 1.6 9.7 International tourists 38,643 47,040 45,061 51,008 53,733 5.3 8.6 Domestic tourists 718,854 636,496 713,145 1,028,485 1,043,435 1.5 9.8 Tourism receipts - Total ($mln) 62.6 58.3 63.6 88.6 90.3 2.0 9.6 International tourists ($mln) 8.7 10.6 10.1 11.5 12.1 5.3 8.6 Domestic tourists ($mln) 53.9 47.7 53.5 77.1 78.3 1.5 9.8 Length of Stay International tourists 3.0 3.0 3.0 3.0 3.0 0.0 0.0 Domestic tourists 1.5 1.5 1.5 1.5 1.5 0.0 0.0 Average daily expenditure International tourists ($) 75.0 75.0 75.0 75.0 75.0 0.0 0.0 Domestic tourists ($) 50.0 50.0 50.0 50.0 50.0 0.0 0.0 Average receipts per tourist International tourists ($) 225.0 225.0 225.0 225.0 225.0 0.0 0.0 Domestic tourists ($) 75.0 75.0 75.0 75.0 75.0 0.0 0.0 CAGR = compound annual growth rate, mln = million. Source: Ministry of Tourism; Kep Department of Tourism

b. Tourism Forecasts for Kep

14. As shown in Error! Reference source not found., without-project forecasts suggest that Kep Province will receive 1,796,064 tourists (87,386 international), generating just under $148 million in receipts in 2026, and 3,063,296 tourists (148,880 international), generating $252 million in 2046. The with-project growth scenario places total arrivals at 1,816,806 (88,395 international) in 2026, generating just under $159 million in receipts, and at 3,211,477 million (156,082 international), generating just under $281 million in 2046.

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Table 2: Kep Province Assumptions for Tourism Forecasts

Without Project With Project Profile 2018-2022 2023-2030 2031-2040 2041-2046 2018-2022 2023-2030 2031-2040 2041-2046 International arrivals growth rate 5.4% 4.4% 2.9% 1.4% 5.4% 4.7% 3.1% 1.4% International length of stay (days) 3.0 3.0 3.0 3.0 3.0 3.1 3.1 3.1 International daily spending ($) 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 Domestic arrivals growth rate 5.5% 4.4% 2.9% 1.4% 5.5% 4.7% 3.1% 1.4% Domestic length of stay (days) 1.5 1.5 1.5 1.5 1.5 1.6 1.6 1.6 Domestic daily spending ($) 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 Source: Consultants Estimates

Table 3: Kep Province Tourism Forecasts 2016-2046

Baseline Without Project With Project Incremental With-Project benefits Indicator 2016 2026 2036 2046 2026 2036 2046 2026 2036 2046 Tourist arrivals - Total 1,097,168 1,796,064 2,523,307 3,063,296 1,816,806 2,619,804 3,211,477 20,741 1.2% 96,497 3.8% 148,181 4.8% International tourists 53,733 87,386 122,703 148,880 88,395 127,396 156,082 1,009 1.2% 4,693 3.8% 7,202 4.8% Domestic tourists 1,043,435 1,708,678 2,400,604 2,914,416 1,728,411 2,492,408 3,055,394 19,732 1.2% 91,805 3.8% 140,978 4.8% Tourism receipts - Total ($mln) 90.3 147.8 207.7 252.1 158.8 229.0 280.7 11.0 7.4% 21.4 10.3% 28.6 11.4% International tourists ($mln) 12.1 19.7 27.6 33.5 20.6 29.6 36.3 0.9 4.5% 2.0 7.3% 2.8 8.3% Domestic tourists ($mln) 78.3 128.2 180.0 218.6 138.3 199.4 244.4 10.1 7.9% 19.3 10.7% 25.9 11.8% Average receipts per tourist International tourists ($) 225.0 225.0 225.0 225.0 232.5 232.5 232.5 7.5 3.3% 7.5 3.3% 7.5 3.3% Domestic tourists ($) 75.0 75.0 75.0 75.0 80.0 80.0 80.0 5.0 6.7% 5.0 6.7% 5.0 6.7% Source: Consultant’s estimates.

467 Appendix 19

C. Preah Sihanouk Province

a. Tourism in Preah Sihanouk

15. Preah Sihanouk Province is located on the south-west coast of Cambodia, around 230 km from the capital Phnom Penh, and has a population of around 200,000 (2008). The total land area is 2,537 km2, out of which two third are hills and plateaus. The province has 141 km of coastline and 34 islands. Ream National Park is the country’s only marine national park with numerous unique ecological habitats and potential for ecotourism development. The province is conveniently accessible by land, rail, air and sea. The capital, Sihanoukville, is a deep-water port city and steadily growing urban center.

16. Preah Sihanouk Province is part of the Coastal Zone and a tourism hotspot. Ochheuteal Beach, Serendipity Beach and Otres Beach are the most popular. Islands are also valuable tourism assets. Koh Rong, situated 26 km west of Sihanoukville’s coast, is the province’s largest island, encompassing 78 km2. There are existing ferry services between Sihanoukville and Koh Rong but the basic port facilities are reaching capacity. There are many different types of accommodation on the island, including guest houses, bungalows, luxury resorts, and one international 5-star resort. Environmental conditions are deteriorating due to a lack of sanitation and inadequate solid waste management.

Table 4: Preah Sihanouk Province Baseline Conditions 2012-2016

Growth CAGR Indicator 2012 2013 2014 2015 2016 2016/2015 2012-2016 (%) (%) Tourist arrivals - Total 870,464 1,033,929 1,327,748 1,518,874 2,079,570 36.9 24.3 International tourists 212,643 302,325 358,639 362,061 404,939 11.8 17.5 Domestic tourists 657,821 731,604 969,109 1,156,813 1,674,631 44.8 26.3 Tourism receipts - Total ($mln) 41.2 50.2 63.8 71.7 96.0 33.8 23.5 International tourists ($mln) 14.0 20.0 23.7 23.9 26.7 11.8 17.5 Domestic tourists ($mln) 27.2 30.3 40.1 47.9 69.3 44.8 26.3 Length of Stay a International tourists 1.9 1.9 1.9 1.9 1.9 0.0 0.0 Domestic tourists 1.7 1.7 1.7 1.7 1.7 0.0 0.0 Average daily expenditure a International tourists ($) 40.0 40.0 40.0 40.0 40.0 0.0 0.0 Domestic tourists ($) 27.6 27.6 27.6 27.6 27.6 0.0 0.0 Average receipts per tourist International tourists ($) 66.0 66.0 66.0 66.0 66.0 0.0 0.0 Domestic tourists ($) 41.4 41.4 41.4 41.4 41.4 0.0 0.0 CAGR = compound annual growth rate, mln = million. a Daily expenditure and length of stay for 2012-2015 are assumed at the 2016 level due to the unavailability of data for 2012- 2015. Source: Ministry of Tourism; Preah Sihanouk Department of Tourism

17. Preah Sihanouk Province welcomed 2.1 million visitors in 2016, of which nearly 20% were international (Error! Reference source not found.). This represents a 37% increase compared to 2015 (12% for international and 45% for domestic tourists). Cumulative average arrival growth during the period 2012-2016 was 24%. Total tourism expenditure in 2016 is estimated at around $96 million, up 24% from 2015. Length of stay of and average daily expenditure were, respectively, 1.9 days and $40 for international tourists and 1.7 days and $27.6 for domestic tourists. Lacking historic data (2012-2015) for average length of stay and average daily expenditure, these are assumed to be the same as 2016.

468 Appendix 19

18. Based on strong international and domestic demand, it is likely that tourism in Preah Sihanouk Province will continue to grow steadily in the foreseeable future. However, without strategic investment there is a risk it will exceed its carrying capacity, and consequently growth will stagnate or decline. The project’s proposed seaside access and environmental improvements along Ochheuteal and Otres beaches in Sihanoukville and Koh Toch beach on Koh Rong Island and passenger pier developments in Sihanoukville and Koh Toch, along with better destination management, will expand the destination’s capacity for future growth, relieve congestion, improve beachfront drainage, and improve passenger safety.

b. Tourism Forecasts for Preah Sihanouk

19. The assumptions used for the forecasts are shown in Error! Reference source not found.. As shown in Table 6, without-project forecasts suggest that Preah Sihanouk Province will receive 3,714,007 tourists (693,735 international) and generate just under $171 million in receipts in 2026, and 6,427,391 tourists (1,192,187 international), generating just over $295 million in 2046. The with-project growth scenario places total arrivals at 3,756,867 (701,744 international) in 2026, generating just under $184 million, and at 6,738,073 million (1,249,834 international) in 2046, when arrivals could generate just under $330 million.

c. Forecasts for Output 1 infrastructure subprojects in Preah Sihanouk

20. Baseline conditions and projections for each infrastructure subproject are presented in Table 7. The underlying assumptions and forecasts are presented below.

- S1 Sihanoukville Seaside Access and Environmental Improvements Baseline conditions: . International and domestic arrivals comprise 80% of provincial arrivals (as per Department of Tourism (DOT) estimates); . Receipts calculated using estimated tourist arrivals * provincial average daily expenditure * length of stay. Without-project scenario: . International and domestic arrival growth follows provincial “without-project” growth assumptions; . Receipts calculated using forecasted tourist arrivals * provincial average daily expenditure * length of stay. With-project scenario: . International and domestic arrival growth follows the provincial “with-project” growth assumptions; . Receipts calculated using forecasted tourist arrivals * forecasted provincial with-project average daily expenditure * length of stay. - S2 Sihanoukville-Koh Rong Passenger Piers and Koh Toch Beach Improvements Baseline conditions: . Sihanoukville - Koh Rong ferry service  Ferry-round trips and passenger-round trips as reported by DOT;  Ferry fare receipts calculated at $20 per passenger-round trip (as reported by DOT). . Sihanoukville Ferry pier operation  Pier to be newly constructed – baseline is nil. . Koh Rong ferry pier operation  Pier to be newly constructed – baseline is nil. . Koh Rong tourism  International and domestic arrivals on Koh Rong as reported by DOT;

469 Appendix 19

 Tourism receipts on Koh Rong calculated using reported Koh Rong arrivals * length of stay (3 days for international and 2 days for domestic tourists) * 70% of provincial average daily expenditure. Without-project scenario: . Sihanoukville - Koh Rong ferry service  Growth rate of ferry-round trips and passenger-round trips is the same as provincial tourist arrival growth rate;  Ferry fare receipts calculated at $20 per passenger-round trip. . Sihanoukville Ferry pier operation  Not applicable. . Koh Rong ferry pier operation  Not applicable. . Koh Rong tourism  International and domestic arrivals growth rate on Koh Rong assumed to be the same as provincial growth rate;  Tourism receipts on Koh Rong calculated using forecasted Koh Rong arrivals * length of stay as per baseline * 70% of forecasted provincial average daily expenditure. With-project scenario: . Sihanoukville - Koh Rong ferry service  Growth in ferry-round trips and passenger-round trips assumed the same as forecasted provincial arrival growth rate, except for 2023-2030, during which 0.1% incremental growth is expected;  Ferry fare receipts calculated at $20 per passenger-round trip. . Sihanoukville ferry pier operation  Departure tax is assumed $0.50 per passenger from 2023 onwards;  Berthing fees is assumed $1 per ferry arrival from 2023 onwards;  Receipts from parking fees calculated at $0.50 per vehicle per day (one vehicle is assumed to carry four people), with 1% of international passengers and 7% of domestic passengers using the parking service for the respective projected average length of stay on Koh Rong, from 2023 onwards;  Rental of commercial space (approx. 72m2) is assumed $17,280 per year from 2023 onwards. . Koh Rong ferry pier operation  Departure tax is assumed $0.50 per passenger from 2023 onwards;  Berthing fee is assumed $1 per ferry arrival from 2023 onwards;  Rental of commercial space (approx. 64m2) is assumed at $15,360 per year from 2023 onwards. . Koh Rong tourism  Koh Rong’s International and domestic arrival growth assumed to be the same as the provincial arrival growth rate, except for 2023-2030, when 0.1% incremental annual growth is expected;

470 Appendix 19

 Average length of stay for both international and domestic tourists is assumed to increase by 0.1 day beginning in 2023;  Tourism receipts calculated using forecasted Koh Rong arrivals * length of stay * 70% of forecasted provincial average daily expenditure.

471 Appendix 19

Table 5: Preah Sihanouk Province Assumptions for Tourism Forecasts

Without Project With Project Profile 2018-2022 2023-2030 2031-2040 2041-2046 2018-2022 2023-2030 2031-2040 2041-2046 International arrivals growth rate 6.3% 4.4% 2.9% 1.4% 6.3% 4.7% 3.1% 1.4% International length of stay (days) 1.7 1.7 1.7 1.7 1.7 1.8 1.8 1.8 International daily spending ($) 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 Domestic arrivals growth rate 7.2% 4.4% 2.9% 1.4% 7.2% 4.7% 3.2% 1.4% Domestic length of stay (days) 1.5 1.5 1.5 1.5 1.5 1.6 1.6 1.6 Domestic daily spending ($) 27.6 27.6 27.6 27.6 27.6 27.6 27.6 27.6 Source: Consultant’s estimates.

Table 6: Preah Sihanouk Province Tourism Forecasts 2016-2046

Baseline Without Project With Project Incremental With-Project benefits Indicator 2016 2026 2036 2046 2026 2036 2046 2026 2036 2046 Tourist arrivals - Total 2,079,570 3,714,007 5,255,689 6,427,391 3,756,867 5,456,532 6,738,073 42,859 1.2% 200,843 3.8% 310,682 4.8% International tourists 404,939 693,735 978,299 1,192,187 701,744 1,015,697 1,249,834 8,008 1.2% 37,398 3.8% 57,647 4.8% Domestic tourists 1,674,631 3,020,272 4,277,390 5,235,204 3,055,123 4,440,835 5,488,239 34,851 1.2% 163,445 3.8% 253,035 4.8% Tourism receipts - Total ($mln) 96.0 170.7 241.5 295.2 183.9 267.0 329.7 13.2 7.7% 25.5 10.6% 34.4 11.7% International tourists ($mln) 26.7 45.8 64.6 78.7 49.1 71.1 87.5 3.3 7.3% 6.5 10.1% 8.8 11.2% Domestic tourists ($mln) 69.3 124.9 176.9 216.6 134.8 195.9 242.2 9.9 7.9% 19.0 10.7% 25.6 11.8% Average receipts per tourist International tourists ($) 66.0 66.0 66.0 66.0 70.0 70.0 70.0 4.0 6.1% 4.0 6.1% 4.0 6.1% Domestic tourists ($) 41.4 41.4 41.4 41.4 44.1 44.1 44.1 2.8 6.7% 2.8 6.7% 2.8 6.7% Source: Ministry of Tourism; Preah Sihanouk Department of Tourism and consultant’s estimates.

472 Appendix 19

Table 7: Preah Sihanouk Province Tourism Forecasts by Subproject 2016-2046

Baseline Without Project With Project Incremental With-Project benefits Indicator 2016 2026 2036 2046 2026 2036 2046 2026 2036 2046 S1 Sihanoukville Seaside Access and Environmental Improvements Ocheteaul Beach and Otress Beach Tourist arrivals 1,663,656 2,971,206 4,204,551 5,141,913 3,005,493 4,365,225 5,390,458 34,288 1.2% 160,674 3.8% 248,546 4.8% International 323,951 554,988 782,639 953,749 561,395 812,558 999,867 6,407 1.2% 29,919 3.8% 46,118 4.8% Domestic 1,339,705 2,416,218 3,421,912 4,188,163 2,444,099 3,552,668 4,390,591 27,881 1.2% 130,756 3.8% 202,428 4.8% Tourism receipts ($mln) 76.8 136.6 193.2 236.2 147.1 213.6 263.7 10.6 7.7% 20.4 10.6% 27.5 11.7% S2 Sihanoukville-Koh Rong Passenger Piers and Koh Toch Beach Improvements Sihanoukville - Koh Rong ferry service Ferry-round trips 7,397 12,862 18,161 22,160 13,060 18,999 23,409 198 1.5% 839 4.6% 1,249 5.6% Passenger-round trips 298,601 519,210 733,107 894,533 527,212 766,963 944,970 8,002 1.5% 33,856 4.6% 50,438 5.6% International 213,923 366,490 516,820 629,814 372,139 540,691 665,330 5,649 1.5% 23,871 4.6% 35,516 5.6% Domestic 84,678 152,721 216,287 264,719 155,074 226,272 279,640 2,353 1.5% 9,985 4.6% 14,921 5.6% Fare receipts ($mln) 6.0 10.4 14.7 17.9 10.5 15.3 18.9 0.2 1.5% 0.7 4.6% 1.0 5.6% Sihanoukville ferry pier operation Total receipts ($) 159,911 224,782 272,954 159,911 224,782 272,954 Passenger departure tax ($) 131,803 191,741 236,243 131,803 191,741 236,243 Berthing fees ($) 6,530 9,500 11,704 6,530 9,500 11,704 Parking fees ($) 4,292 6,253 7,717 4,292 6,253 7,717 Rental of stalls and kiosks ($) 17,280 17,280 17,280 17,280 17,280 17,280 Koh Rong ferry pier operation Total receipts ($) 153,693 216,600 263,307 153,693 216,600 263,307 Passenger departure tax ($) 131,803 191,741 236,243 131,803 191,741 236,243 Berthing fees ($) 6,530 9,500 11,704 6,530 9,500 11,704 Rental of stalls and kiosks ($) 15,360 15,360 15,360 15,360 15,360 15,360 Koh Rong Island Visitor arrivals 298,601 519,210 733,107 894,533 527,212 766,963 944,970 8,002 1.5% 33,856 4.6% 50,438 5.6% International 213,923 366,490 516,820 629,814 372,139 540,691 665,330 5,649 1.5% 23,871 4.6% 35,516 5.6% Domestic 84,678 152,721 216,287 264,719 155,074 226,272 279,640 2,353 1.5% 9,985 4.6% 14,921 5.6% Tourism receipts ($mln) 21.2 36.7 51.8 63.1 38.6 56.1 69.1 1.9 5.2% 4.3 8.4% 6.0 9.4% Source: Ministry of Tourism; Preah Sihanouk Department of Tourism and consultant’s estimates.

473 Appendix 20: Consultation and Participation Plan

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

DRAFT FINAL REPORT – PART B March 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 20

A. INTRODUCTION

1. ADB’s Safeguards Policy Statement (2009), and the governments of Cambodia, the Lao PDR, and Viet Nam (CLV), promote meaningful stakeholder consultations during the entire project cycle. Meaningful consultation is a process that (i) begins early in the project preparation stage and continues throughout the project cycle; (ii) provides timely disclosure of relevant and adequate information that is understandable and readily accessible to affected people; (iii) is undertaken in an atmosphere free of intimidation or coercion; (iv) is gender inclusive and responsive, and tailored to the needs of disadvantaged and vulnerable groups; and (v) enables all relevant views of affected people and other stakeholders to be incorporated into decision making related to project design, mitigation measures, the sharing of development benefits and opportunities, and implementation issues. ADB requires borrowers/clients to engage with communities, groups, or people affected by projects proposed, and with civil society through information disclosure, consultation, and informed participation in a manner commensurate with the risks to and impacts on affected communities.1

2. Consistent with ADB and CLV’s commitment to meaningful stakeholder engagement, the project’s consultation and participation plan aims to:

 fully disclose all information related to the project, its goals and objectives, components and activities to all recipient communities, their constituents, and other project stakeholders;  obtain information from project beneficiaries and other stakeholders regarding their views and opinions, needs, priorities and preferences on how the project should be implemented;  encourage stakeholder participation in project activities that affect them, including civil works, capacity building and enterprise support programs, awareness raising activities, and monitoring;  obtain stakeholder consent and cooperation;  establish a clear, easily accessible and effective grievance redress mechanism; and  ensure transparency in all project activities.

B. CONSULTATION DURING PROJECT DESIGN

3. A stakeholder analysis was prepared by international and national social development specialists. The analysis identified key project actors, their interests in the project, the problems they face in realizing their interests, organizational resources, mandated responsibilities, and strategies to maximize stakeholder participation during implementation. Information was gathered through workshops, focus group discussions, key informant interviews, household surveys, and individual consultations. In total, 2 workshops, 19 stakeholder meetings/focus group discussions, 6 public consultation meetings, and two surveys (HH and IOL) were conducted, involving approximately 875 project stakeholders (of which 381 are female).

4. Focus group discussions and key informant interviews with district, commune and village officials clarified project expectations and local priorities for tourism and urban development,

1 ADB. 2009. Safeguard Policy Statement. pp. 20. Manila.

475 Appendix 20 explained the projects potential socioeconomic benefits, and confirmed that these are aligned with national and local development plans. Discussions with commune/village coordinators responsible for women’s and ethnic affairs identified strategies to ensure that the project will equitably benefit women, ethnic groups and other vulnerable groups, considering their specific needs and preferences. The key entities consulted are listed below:

 Tourism Planning Department, Ministry of Tourism; Ministry of Public Works and Transport; Ministry of Environment; Ministry of Economy and Finance (including its General Department of Resettlement); Ministry of Social Affairs; and Ministry of Women’s Affairs;  National Committee on Coastal Area Management and Development;  provincial departments of tourism, public works and transport, and environment in Kep, Preah Sihanouk, Kampot, and Koh Kong;  Kep Provincial Administration Agency, which is currently managing solid waste collection;  provincial, district and commune/village officials responsible for ethnic and women’s affairs, and committees on women and children;  civil society organizations and development partners (e.g. Japan International Cooperation Agency and Swisscontact);  tourism industry associations, (e.g. Cambodia Association of Travel Agents and Cambodia Hotel Association);  local transport and urban service providers, hotels, guesthouses, restaurants, retail shops, community tourism groups, and other tourism industry actors; and  men and women living within and adjacent to the project sites.

5. The information and recommendations gathered from the various stakeholder consultations are incorporated into the project design and documented in the summary poverty reduction and social strategy, gender action plans, resettlement plans, environmental assessments, and indigenous people’s plans. There is broad stakeholder support for the proposed tourism-related infrastructure improvements and capacity building programs.

C. CONSULTATION DURING PROJECT IMPLEMENTATION

6. Consultations will continue throughout project implementation, regularly referencing the information gathered during initial consultations with various stakeholder groups. The key stakeholders to be consulted, objectives of involvement, mechanisms for participation, agencies responsible for leading/organizing consultations, timing, and budget source are in the consultation and participation plan (Error! Reference source not found.).

D. STAKEHOLDER COMMUNICATION STRATEGY

7. The project’s stakeholder communication strategy (Error! Reference source not found.2) draws on good practices outlined in ADB’s Public Communication Policy.2 It is based on the

2 ADB. 2011. Public Communication Policy 2011. Disclosure and Exchange of Information. Manila.

476 Appendix 20 principles of transparency, timeliness, meaningful participation, and inclusion of all project stakeholders, particularly women, ethnic groups, and other intended project beneficiaries. The strategy will ensure project stakeholders receive timely, reliable and correct information about the project and have opportunities to give feedback to address implementation issues. Key stakeholders include: (i) direct and indirect project beneficiaries, emphasizing micro and small enterprises and their employees; (ii) community tourism groups; (iii) mass organizations responsible for ethic, women’s, and youth affairs; (iv) tourism industry associations; (v) civil society organizations and other development partners; (vi) government agencies responsible for tourism and public infrastructure management; and (viii) international and domestic tourists. The strategy informs and supports community and private sector development, institutional strengthening to support sustainable tourism and climate resilient green urban development, and mitigation of any potential negative impacts.

477 Appendix 20

Table 1: Consultation and Participation Plan Participation Objective of Their Entity Budget Stakeholder Group Approach Participation Methods Timing Involvement Responsible Source (Depth) Beneficiary Directly benefit from Collaboration  Information: Community meetings to PCUs, PIUs, Project Output 2 and communities, mobile project infrastructure (High) disseminate information about project scope, mass inception; 3 capacity vendors, shop owners, interventions, design elements, participation mechanisms (e.g. organizations, infrastructure building hotel operators and participants’ tourism- community tourism groups), and entitlements for community subproject activities, boat and vehicle related skills training, person affected by involuntary resettlement leaders, and detailed design; RPs, GAP, associations at tourist tourism standards impacts; also, awareness building on HIV/AIDS, consultants continuing and IPPs sites, representatives implementation, and human trafficking, core labor standards and road throughout of poor and vulnerable management training safety, using brochures, posters, and seminars project households, ethnic implementation  Consultation: With residents, business groups, and women owners/vendors, hotel and guest house operators at subproject sites regarding affordability if any changes to fees and public services provided; training needs assessment for vendors and women interested in skills training and tourism management; village meetings and focus group discussions on measures to enhance benefits, and mitigate risks of adverse impacts; detailed measurement survey and consultations on compensation, eligibilities, entitlement, grievance redress for persons/business owners/operators affected by land acquisition and resettlement. Also, consultations with women about participation during construction as unskilled laborers  Decisions: Community members determine the nature and extent of participation and guidelines for community tourism groups and tourism associations, with support from village leaders and mass organizations, to ensure they are needs-based, and inclusive, with representation of ethnic groups, women, and other interested subgroups Tourism site Direct beneficiaries Partnership  Consultations: Community meetings to assess PCUs, PIUs, Infrastructure Output 2 and management with specific (High) training and capacity building needs for committee/ subproject 3 institutional committees responsibilities for infrastructure O&M and priorities for destination association detailed design, strengthening infrastructure O&M at management, tourism services marketing and leaders, and throughout and training project sites promotion strategies consultants project activities implementation  Decisions: Revenue allocation for infrastructure

478 Appendix 20

Participation Objective of Their Entity Budget Stakeholder Group Approach Participation Methods Timing Involvement Responsible Source (Depth) O&M, training and promotion activities Community tourism Existing/newly Collaboration  Consultations: Community meetings to gather PCUs, PIUs, Throughout Output 2 and groups created groups that (High) suggestions for infrastructure detailed design mass project 3 institutional facilitate community features and the community’s role in tourist site organizations, implementation strengthening inputs into the design management. Also, propose topics for training commune/ and training of training and other design and implementation village activities project interventions, leaders, and  Decisions: On concepts, implementation as well as consultants modality, duration and schedules of capacity involvement of development activities such as awareness- women and ethnic raising, training, and other support to tourism site groups in decision- management and micro and small enterprises making  Project implementation: Community focal points appointed to coordinate between project staff and community; and disseminate project- related information  Monitoring: On-site contractor monitoring, review training progress, and report to PIUs Mass organizations Represent interests of Collaboration  Project management and implementation: PIUs, mass Throughout RPs, GAPs, (e.g. women’s unions, women, ethnic groups (High) Direct consultations and participation in project organizations, project IPP, and agencies responsible and youth. implementation through PIU membership and commune/ implementation Output 3 for ethnic and youth project steering committee representation village institutional affairs) leaders strengthening  Strategic decision making: Contribute to activities destination management decisions, RP, GAP and IPP implementation  Monitoring: Provincial steering committee representation, district resettlement committees, and commune/village construction monitoring groups Private businesses Private sector Partnership  Consultation: Meetings and individual PCUs and Quarterly Output 2 and associations and participation for (High) consultations on emerging needs and issues PIUs destination 3 institutional chambers of destination affecting tourism and the business environment management strengthening commerce management and network activities  Strategic decision making: Meetings and marketing meetings forums to gain public and private consensus on destination management frameworks, industry standards, and marketing and promotion directions Provincial and district Effective and efficient Collaboration  Approvals: Review and approve annual work PCUs and Annual steering Output 3 project management plans and budgets, safeguard documents, civil committee institutional

479 Appendix 20

Participation Objective of Their Entity Budget Stakeholder Group Approach Participation Methods Timing Involvement Responsible Source (Depth) governments and implementation (High) works design, tendering, and contracts, and PIUs meeting, and as strengthening tourism/urban services management contracts needed during activities  Project implementation: Appoint PIU staff and project designate public representatives to destination implementation management organizations, procurement committees, and resettlement committees  Monitoring: Provincial and national steering committee, project planning and review workshops, resettlement committees, and destination management network participation. Provide policy guidance and mediate project- related disputes if necessary Government Establish and Collaboration  Policy guidance and approvals: Meetings to PCUs, PIUs, Each committee Output 2 and departments involved implement project (Medium) review and approve annual workplans and and Mekong meets at least 3 institutional in national and policies and budgets; and approve periodic progress reports Tourism once per year strengthening subregional and guidelines, and safeguards monitoring reports. Subregional Coordinating activities and steering committees coordination and project steering committee coordinates Office project approval mechanisms subregional marketing, ASEAN tourism management standards implementation, and other joint activities among participating countries, development partners, and private sector advisory groups ASEAN = Association of Southeast Asian Nations, GAP = gender action plan, IPP = indigenous peoples plan; MSME = micro, small, and medium-sized enterprise, O&M = operation and maintenance, PCU = project coordination unit, PIU = project implementation unit, RP = resettlement plan.

480 Appendix 20

Table 2: Stakeholder Communication Strategy Stakeholder Objective Main Interests Messages Means of Communication Timeline Responsibility Groups Project Beneficiary Benefit from new economic Stakeholder cooperation and Presentations, discussions, and Project PCUs, PIUs, stakeholders communities opportunities; social and support is important to document dissemination at inception and and receive environmental sustainability; achieve successful outcomes; planning meetings, workshops, frequently commune/villag timely, users of improved non-coercive information to awareness seminars, project during e offices reliable, and infrastructure and services be shared openly and website, and training activities implementation correct transparently information Community Economic opportunities; Community participation is Presentations, discussions and Project PCUs, PIUs, about the tourism groups social and environmental important for sustainable document dissemination during inception and and project sustainability; manage destination management planning meetings, workshops, frequently commune/villag tourism services and awareness seminars, and during e offices attractions training implementation Tourism Economic opportunities and Public-private collaboration is Presentations, discussions and Frequently PCUs, PIUs, industry trained workers; destination important for training design document dissemination during during industry associations marketing and promotion; and sustainable destination meetings, workshops, awareness implementation associations, and MSMEs industry standards; main management seminars, and training; project and MTCO tourism service providers and MTCO websites Mass RP, GAP and IPP ADB and government Separate meetings with women Project PIUs together organizations, implemented, (e.g. safeguards policies will be and ethnic groups in local inception and with relevant i.e. women’s disclosure, entitlements, followed closely, all affected language when needed; frequently mass unions, grievance redress persons are entitled to fair resettlement committee during organizations agencies mechanisms); equal compensation meetings; safeguards document implementation responsible for opportunities for all disclosure on project and ADB ethnic and websites; project’s public youth affairs information booklet Civil society Advocacy, knowledge, and The project seeks Presentations, discussions and Semi-annual PCUs, PIUs, organizations finance to achieve positive collaboration and document dissemination during meetings; and MTCO and other development outcomes; partnerships to boost its project planning meetings, sector websites development safeguards compliance relevance, effectiveness, coordination meetings, GMS updated partners efficiency and sustainability tourism working group; project monthly and MTCO websites Government Sustainable infrastructure Works design and Workshops, seminars, individual Project PCU and PIUs agencies O&M; safeguards construction schedules consultations with affected inception and as responsible for compliance; sustainable published, transparent urban persons; resettlement committee required during infrastructure destination management services tariffs and fees; RP, meetings and/or meetings with implementation and tourism IEE-EMPs and IPP will be affected households properly implemented International Safe, accessible, well- Residents expect socially and Public signage, social media, Frequently PCU, PIUs, and domestic managed tourism environmentally responsible NTO and MTCO websites, MTCO, and

481 Appendix 20

Stakeholder Objective Main Interests Messages Means of Communication Timeline Responsibility Groups tourists destinations behavior brochures and another print commune/ media village leaders Stakeholders Beneficiary Equal access to benefits Local inputs are sought to Project orientation and frequent Project PIUs, mass engage in communities from new economic ensure infrastructure, public consultations to review inception and organizations, planning, opportunities; social and capacity building, and project features and plans, and frequently and implementati environmental sustainability; institutional strengthening disclose monitoring mechanisms during commune/villag on and sustainability and activities are suitably implementation e leaders monitoring to affordability of improved designed and implemented; build local infrastructure and urban improved infrastructure and Information about the project in ownership of services urban services will be local languages posted in project affordable for residents strategic location in beneficiary initiatives communities

Brochures and posted information about upcoming training programs available in highly-visible, publicly accessible areas

Community representatives join semi-annual planning and review meetings Community Access to quality training; The project promotes Presentations, discussions and Project PCUs, PIUs, tourism groups retain stewardship of local community engagement in document dissemination during inception and and tourism resources; tourism tourism and urban services meetings, workshops, awareness frequently commune/villag and urban services are well- management; community seminars, and training activities; during e leaders managed input is sought to design and project information booklet implementation implement training and information and education campaigns Tourism Manager and employee The project promotes Tourism industry events (e.g. Frequently PCUs, PIUs, industry access to training and industry-relevant training and annual Mekong Tourism Forum during and industry associations destination marketing public-private collaboration; and ASEAN Tourism Forum); implementation association and MSMEs support; enabling business project investments will project and MTCO websites members environment improve the business environment for tourism; ASEAN tourism standards will improve service quality and build consumer confidence Mass Equal access for women, The project will make special Community meetings, Frequently PCUs, PIUs,

482 Appendix 20

Stakeholder Objective Main Interests Messages Means of Communication Timeline Responsibility Groups organizations, ethnic groups, and youth; provisions (e.g. scholarships, workshops, seminars, and during mass i.e. women’s prevent and mitigate training vouchers and training; project information implementation organizations, unions, negative social and affirmative actions) to include booklet and agencies environmental tourism women, ethnic groups, and commune/villag responsible for impacts youth, following the GAP and e leaders ethnic and IPPs; information and youth affairs education campaigns to raise awareness about good environmental practices, and prevention of human trafficking and HIV/AIDS Civil society Good development Civil society organizations Tourism industry events (e.g. Frequently PCUs and PIUs organizations coordination; development and other development annual Mekong Tourism Forum during and other effectiveness partners are openly invited to and ASEAN Tourism Forum); implementation development collaborate and coordinate GMS and ASEAN tourism partners with the project working group meetings; sector coordination meetings project and MTCO websites Government Institutional strengthening The project supports capacity Semi-annual planning and review Frequently PCUs and PIUs agencies for sustainable infrastructure building for public officials meetings; annual workplans during responsible for O&M and destination and will strengthen available on project websites implementation infrastructure management institutions responsible for and tourism tourism/urban management

ADB = Asian Development Bank; ASEAN = Association of Southeast Asian Nations; EMP = environmental management plan; GAP = gender action plan; GMS = Greater Mekong Subregion; IEE = initial environmental examination; IPP = Indigenous Peoples Plan; MTCO = Mekong Tourism Coordinating Office; MSME = micro, small, and medium-sized enterprise; NTO = national tourism organization; O&M = operation and maintenance; RP = resettlement plan.

483 Appendix 21: Stakeholder Analysis

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 21

Stakeholder Analysis

Stakeholder Stakeholder Interest Perception of Problem Resources Mandate Group Central/Local Government Ministry of To ensure Poor conditions of the MOT budget and staff Supervise tourism activities in Cambodia Tourism (MOT) management of all infrastructure create many Scarcity of public (sub) projects through problems for the budgets, in particular for PIU population and limit the infrastructure O&M. tourism and economic development of the provinces. Priority should be given to development in sanitation and roads, infrastructure along the beaches Project To ensure Poor conditions of the MPWT budget and staff Administer the Project Imprest Account for the ADB loan. Coordination Unit management of all infrastructure create many Scarcity of public Project preparation, including the establishment of financial (embedded within (sub) projects through problems for the budgets, in particular for and management systems and procedures and MOT), with MEF PIU population and limit the infrastructure O&M. procurement of equipment, consultant recruitment and and MPWT economic development of supervision; representation) the provinces. Preparation and submission of rolling annual action plans, Priority should be given to consolidating PCU-led activities and work plans received development in from PIUs to the NPSC; wastewater collection and treatment, urban drainage, Ensuring compliance with loan covenants and assurances and solid waste in respect of all subprojects and the good-governance management sectors in framework; both towns. Facilitate updating and coordinate with relevant agencies approval of and ensure compliance with IEE, EMPs, GAP and the resettlement plan; Review and approval of goods and civil works contracts, including bid documents; Approval of payment to contractors and maintaining disbursement records; Coordination between the concerned agencies at the national and provincial levels; Coordination of activities of the PIUs and the inputs of concerned stakeholders; Coordination of all reporting aspects of the project;

485 Appendix 21

Stakeholder Stakeholder Interest Perception of Problem Resources Mandate Group Coordination of institutional strengthening measures; Administrative and technical support to the PIUs; Preparation of consolidated project accounts to be forwarded to ADB; Advise PIUs on revenue-enhancing activities related to the recovery of O&M costs for project facilities and equipment; Coordination of project audits; Coordination of all monitoring, evaluation and reporting activities; and Communication of project's outcomes, outputs, and activities to all stakeholders. Social and Secure the approval Few difficulties since SEU staff To obtain the data of the affected people Environmental of the Resettlement resettlement implications Unit (SEU) of Plan for the project of the subproject are MPWT and prepare reports minor. . during implementation Ministry of Ensure that the Few difficulties since Resettlement Department Supervise and review the resettlement documents Economy and institutional resettlement implications budget and staff produced in the country Finance, Inter- procedures for of the subproject are ministerial compensation follow minor. Resettlement Cambodian laws Committee, Resettlement Department Project Tourism suffers from the Department of Tourism Preparation of provincial-level rolling annual work plans for Implementation poor standard of urban budget and staff approval by the Vice-Governor who is also the Chairperson Units (embedded infrastructure and services of the Provincial Project Steering Committee and onward within the submission to PCU for incorporation into project’s overall Department of annual plan; Tourism (DOT Coordination and supervision of consultant inputs for detailed design of civil works; Coordinate with the relevant agencies and consultants on updating the safeguard documents; Administer project sub-accounts for the ADB loan Approving payments and maintaining disbursement records for PIU managed expenditure;

486 Appendix 21

Stakeholder Stakeholder Interest Perception of Problem Resources Mandate Group Coordination with all concerned stakeholders; Provincial To ensure Lead agency for sanitations infrastructure management. Department of implementation of all Large scope of activities: Public Works and subproject To ensure construction and management of solid waste and Transport (DPWT) components follow wastewater facilities, the civil work standards; Supervision of ports/pier, roads construction and maintenance, Provide maintenance of the roads and infrastructure Provincial The subproject will Solid waste management Very limited capacity to PDE: Responsible for protection of local environment and Department of help PDE to fulfil its not satisfying and effectively ensure water resources. Environment mandate. represents risks for the management of landfills Office for Environmental Pollution Control: responsible for (PDE) health of the population. or collection of waste. the solid waste sector management Office for Uncontrolled dump site. Financial resources of the To assume its main function, the PDE needs to coordinate Environmental . PDE are limited with other departments, the DPWT. Pollution Control No laboratory at the PDE, in PDE Lack of comprehensive infrastructure to promote which therefore depends tourism development on the MoE regarding environmental monitoring (use of mobile laboratories). Provincial No direct interest but Provincial and District Issue permit regarding land use Department of they should ensure Resettlement Office Organize resettlement committees Land resettlement or land budget and staff Management, acquisition for Urban Planning minimizing the and Construction impacts and (PDLMUC) implement the compensation delivery system Provincial Responsible for PDEF budget and staff Financial management of projects Department of subproject financial Economy and management at Finance (PDEF) province level Provincial Gender equality and (Enhanced PDWA/DoWA is relatively Government institution promoting gender equality and Department of women’s Implementation of small and with limited women’s empowerment. Women’s Affairs empowerment is the Population and Gender resources. Support gender-responsive social accountability and social

487 Appendix 21

Stakeholder Stakeholder Interest Perception of Problem Resources Mandate Group (PDWA (DoWA) highest priority Equity) are valid in both protection in public services. towns. Targets under-served areas and groups that experience the largest gender-based gaps and disadvantages. Coordinator and facilitator for gender mainstreaming. Monitoring and evaluation. Provincial Subproject can Many households face DLSA is relatively small Monitor for violations regarding child labor, workers’ Department of promote development economic difficulties and and with limited violations, working conditions, and work accidents. Labor and Social opportunities for social problems resources. Conduct vocational training for female-headed households, Affairs (DLSA) households needing widows, handicapped, and dropout students. additional income. Sihannoukville Collecting and The current environmental Municipality’s own office Sub-provincial administrative levels are in principle key Municipality treating wastewater is conditions in the The limited budget of the actors of the local development per the decentralization vital for the municipality are affecting municipality and the policy. Yet, the municipalities and the Sangkats improvement of living standards. regulatory framework (communes) are not deeply involved in the management of Sihanoukville as a related to local urban services targeted by the Project. tourist destination and administration in income generator. Cambodia makes it difficult to commit to new activities. Kep Municipality Infrastructure Urban infrastructure is a - Municipality’s own office Sub-provincial administrative levels are in principle key improvement will bottleneck for the actors of the local development per the decentralization benefit the economic economic development of policy. Yet, the municipalities and the Sangkats life of the municipality the municipality (communes) are not deeply involved in the management of urban services targeted by the Project.

Civil Society Khmer Women's Improvement of the People who are KWCD staff includes peer The main goal of KWCD is to improve the standards of Cooperation for quality of life of the vulnerable and at-risk, educators, village living and well-being for people who are vulnerable and at- Development Cambodian people, particularly women, youth volunteers, community risk, particularly women, youth and children. KWCD works (KWCD) equal rights to all and and children need volunteer networks, with vulnerable women, people living with HIV/AIDS, the preservation of assistance. empowerment workers orphans and vulnerable children, entertainment workers women’s culture and and women and their clients, and women of reproductive age and their tradition. empowerment group husbands. leaders to run projects of benefit to those vulnerable and at-risk. The projects implemented improve skills of at-risk

488 Appendix 21

Stakeholder Stakeholder Interest Perception of Problem Resources Mandate Group populations through applying peer education, awareness raising, advocacy, IEC development and distribution, campaigns, community events, community forums, group discussion, capacity building and other services. Solid waste Getting the best Existing waste collection Beneficiaries collection services possible service at management creates in Kep affordable price. unhygienic living conditions. Chambers of Subprojects are The current infrastructure Limited resources To support its members in developing business Commerce welcome promote has negative impacts on opportunities in Kep and Sihanoukville economic the development of the development of the tourism sector. municipality. Shop and Support more Business Restaurant people/tourists to owners spend more time in the beaches and town Businesses at Improved Business main tourist infrastructure and beaches environmental sanitation leading to greater business and employment opportunities

DLSA = Department of Labor and Social Affairs; DOT = Department of Tourism; DPWT = Department of Public Works and Transport; EA = Executing Agency; GAP = Gender Action Plan; IEC = Information, Education, Communication; IEE = initial environmental examination; KWCD = Khmer Women's Cooperation for Development; MEF = Ministry of Economy and Finance; MOT = Ministry of Tourism; ; MPWT = Ministry of Public Works and Transport; NPSC = National Project Steering Committee; NTO = national tourism organization; O&M = operation and maintenance; PCU = Project Coordination Unit; PDE = Provincial Department of Environment; PDEF = Provincial Department of Economy and Finance; PDLMUC = Provincial Department of Land Management, Urban Planning and Construction; PDWA = Provincial Department of Women’s Affairs; PIU = Project Implementation Unit; RP = resettlement plan; SEU = Social and Environmental Unit.

489 Appendix 22: Supplementary Information and Data

TA9090-REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

FINAL REPORT – PART B June 2018

Kingdom of Cambodia: Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Appendix 22

I. SURVEY DATA

1. Household Survey Result Tables

Contents 1. Household Respondent Socio-Demographic Profile 1.1 Household Headship 1.2. Sex of respondent 1.3 Affected household by resettlement 2. Household Membership Socio-Demographic and Economic Profile 2.1. Total number of household member and Gender 2.2. Relationship to Household head 2.3. HHs members’ ages; 2.4. Household Members Highest educational attainment 2.5. Household members who contribute to household income; 2.6. If yes, employment status 2.7. Employment sector of activity 2.8. Household member working away from home 2.9 Household member working away from home contributing in the household/family income 2.10. Household’s ethnic background 2.11. HHs member who is a disabled 3. Household Assets Profile and Socio-Economic Situation in Community 3.1 Number of years household has lived in the community 3.2. Ownership to house/dwelling 3.3. Farmland Ownership and total in sq.mtrs. 3.4. Household subsistence from land owned/rented 3.5 Household ownership to vegetable gardens 3.6 Household subsistence from vegetables produced in the garden 3.7 List of crops planted/harvested and mode of selling of each crop harvested, partial or whole? 3.8 Location where household crops are sold/marketed 3.9 Socio-economic situation of most households in the community 3.10 Socio-economic situation of respondent household 3.11 Indicators of rich/well-off households in community (multiple responses) 3.12 Indicators of poor households in the community (multiple responses) 4. Access to Mobility and Telecommunications 4.1. Household ownership of a bicycle 4.2 Household ownership of a motorcycle 4.3. Household ownership to a television 4.4 Type of house 4.5. Household connection to electricity/power grid 4.6. Number of hours household has electricity 4.7. Households’ source of information/communication from national government 4.8. Households’ source of information/communication from local government 5. Access to Health

491 Appendix 22

5.1. Household’s Morbidity profile: Types of illnesses affecting family members (multiple responses) 5.2 Types of health facilities/personnel where and whom consulted when family member is ill (multiple responses) 5.3 Types of domestic water source of household (multiple responses) 5.4 Distance of house to water source (skip) 5.5. Of those households who accessed domestic water from a public tap ( skip) 5.5.1 Total amount of time consumed for collecting/fetching water (skip) 5.5.2. Who collect this? Gender and age (skip) 5.6 Households’ types of toilet facilities 6. Access to Education 6.1. Availability of primary school in the community; 6.2 Distance of primary school from houses of household respondents 6.3. Availability of secondary school in the community 6.4. Distance of secondary school from houses of household respondents 7. Household Income and Expenditures 7.1. Main source of income of households 7.2 Other sources of household income (multiple responses) 7.3. Amount of monthly and annual income from other non-tourism income sources of households (multiple responses); 7.4. Amount of monthly and annual household income from directly tourism-related sources of income 8. Consultation on Subproject and Tourism Development 8.1 Household Respondents’ Awareness on the Subproject 8.2 If yes, means/media of getting awareness on the subproject; 8.3 Respondents’ knowledge of the subproject plan 8.4 Subprojects Benefits to community, yes? And reasons why beneficial to community? (multiple responses) 8.5 If no benefits, why? (multiple responses) 8.6 People in the community who will benefit from the subproject 8.7 Nature of benefits per type of people in community (multiple responses) 8.8 Benefit of Subproject to respondent household? Yes, why? No why not (multiple responses) 8.9 Subproject’s impact to household respondent during construction (multiple responses) 8.10 Subproject’s impacts to household respondent after subproject completion (multiple responses) 8.11 Recommendations on changes of subproject to make it more beneficial and/or avoid its adverse impact to household respondent (multiple responses) 9. Willingness-to-pay for sanitation and other services 9.1 Household respondents’ approval of the subproject item included in subproject description 9.2 Willingness to pay for additional items to subproject features 9.3 How much is amount of user/rental fee per month? 9.4 Other means of covering up user fees (multiple responses) 9.5 Willingness to participate in consultation meetings with business owners 9.6 Experiences with tourists 9.7 Preference to have more tourists visits the area, Yes, why? (multiple responses) 9.8 Three most important things you would like to show to tourists (multiple responses) 9.9 Three most important things you would not like tourists to do in your community (multiple responses) 9.10 Preferred nature of tourism activities to gain income (multiple responses) 10 Respondents’ Concerns with Natural Disasters and Climate Change

492 Appendix 22

10.1 House/business/shops affected by typhoon and storm surge; 10.2 Yes, frequency of occurrence 10.3 Total amount per year spent for house/shops/business repairs due to typhoons, storm surge, erosions etc. 11. Training and Capacity-Building 11.1 Household member receiving training from government/institutions, if yes, Who among household member? Relationship of Household respondent with HH member who participated in training and gender 11.2 Willingness for HH members to participate in project-related training and capacity-building 11.3 Who among HH members would household respondent recommend for training and capacity- building in project; their gender 11.4 Type and nature of training and capacity-building that HH respondent recommend for HH members participating in these activities. (multiple responses) 12. Community Development and Participation 12.1 Three top priorities for improvement/development in the community (multiple responses) 12.2 Groups or community activities that household members participate in (multiple response

493 Appendix 22

1. Household Respondent Socio-Demographic Profile

1.1 Household Headship

Respondent is Name of Province Name of Sangkat Name of Village head of household Total Yes No Sangkat 3 Phun 3 42 20 62 Phum 4 73 31 104 Preah Sihanouk Sangkat 4 Phum 6 37 10 47 Koh Rong Koh Touch 34 3 37 Prey Thom Damnak Chang Eur 70 9 79

Ou Krasa Damnak Chambok 75 6 81 Kep Keo Krasaing 31 11 42 Kep Kep 49 6 55 Total 411 96 507

1.2 Sex of Respondent

Sex of Name of Province Name of Sangkat Name of Village Respondent Total Female Male Sangkat 3 Phun 3 41 21 62 Preah Sihanouk Phum 4 52 52 104 Sangkat 4 Phum 6 16 31 47 Koh Rong Koh Touch 13 24 37 Prey Thom Damnak Chang Eur 36 43 79 Kep Ou Krasa Damnak Chambok 38 43 81 Keo Krasaing 27 15 42 Kep Kep 29 26 55 Total 252 255 507

1.3 Affected household by resettlement

Valid Frequency Percent Percent No, not at all possible 482 95.1 95.1

Maybe, not confirmed 25 4.9 4.9

Total 507 100 100

494 Appendix 22

2. Household Membership Socio-Demographic and Economic Profile

2.1 Total number of household member and Gender

Sex of household member Frequency Percent Male 961 50 Female 969 50 Total 1930 100

2.2 Relationship to Household head

Relationship to Household head Frequency Percent

Head of Household Himself/Herself 411 21 Wife/Husband 513 27 Child/Adopted Child 924 48 Niece/Nephew 11 0.6 Father/Mother 17 0.9 Sister/Brother 4 0.2 Son-in-law/Daughter-in-law 29 1.5 Bother –in-Law 1 0.1 Grand Father/Grand Mother 18 0.9 Grand Child 1 0.1 Servant or Servant’s Relative 1 0.1 Total 1930 100

2.3 HHs members’ ages

Age Frequency Percent

1-10 307 16 11-20 327 17 21-30 439 23 31-40 390 20 41-50 239 12 51-60 150 9 61-70 63 3 71-80 14 0.7 >80 1 0.1 Total 1930 100

495 Appendix 22

2.4 Household Members Highest educational attainment

Educational Attainment Frequency Percent No Schooling, Illiterate 233 12 No Schooling, literate 57 3 Primary incomplete 452 23 Primary complete 256 13 Secondary Incomplete 331 17 Secondary complete 328 17 Vocational/ Technical Incomplete 6 0.3 Vocational/ Technical complete 3 0.2 University Incomplete 48 3 University Complete 200 10 Others 16 1 Total 1930 100

2.5 Household members who contribute to household income

Income Contribution Frequency Percent Yes 1123 58 No 767 40 Don't Know 40 2 Total 1930 100

2.6 If yes, employment status

Employment status Frequency Percent Self-Employed 699 55 Full-Time Wage Work 360 29 Part time Work 59 5 Casual work for other 51 4 Don’t Know 92 7 Total 1261 100

2.7 Employment sector of activity

Employment sector of Activity Frequency Percent Farming 251 21

496 Appendix 22

Fishing 50 4 Livestock 60 5 Forest Activities 40 3 Business Enterprise or Trade of one’s own 266 21 Property Ownership (income mainly from rentals) 44 3 Casual Work (e.g., farm labor, construction) 143 11 Wage/Salaries Work (in the public sector) 111 9 Wage/Salaries Work (in the private sector) 196 15 Other 100 9 Total 1161 100

2.8 Household member working away from home

Frequency Percent Valid Percent Yes 39 7.7 7.7 No 468 92.3 92.3 Total 507 100 100

2.9 Household member working away from home contributing in the household

Frequency Percent Yes 31 6 No 8 1.7 Total 39 7.7

2.10 Household’s ethnic background

Ethnic background Frequency Percent Valid Percent Cambodia 504 99.4 99.4 France 2 0.4 0.4 Denmark 1 0.2 0.2 Total 507 100 100

2.11 HHs member who is a disabled

Disable HHs member Frequency Percent Valid Percent Yes 15 3 3 No 492 97 97 Total 507 100 100

497 Appendix 22

3. Household Assets Profile and Socio-Economic Situation in Community 3.1 Number of years household has lived in the community

Number of years Frequency Percent Valid Percent Less than two years 9 1.8 1.8 Two to five years 43 8.5 8.5 Six to ten years 37 7.3 7.3 More than ten years 91 17.9 17.9 Have always lived here 327 64.5 64.5 Total 507 100 100

3.2 Ownership to house/dwelling

Ownership Dwelling Frequency Percent Valid Percent Rented 64 12.6 12.6 Owned 417 82.2 82.2 Others 26 5.1 5.1 Total 507 100 100

Other Ownership Dwelling

Other Ownership Dwelling Frequency Percent Land guardsman 3 0.6 Parent's land 16 3.1 Public land 6 1.2 Uncle's land 1 0.2 Total 26 5.1

3.3 Farmland Ownership and total in sq.mtrs.

Valid Farmland Frequency Percent Percent Yes 212 41.8 41.8 No 295 58.2 58.2 Total 507 100 100

Size of Farmland (ha)

Size of Land (Ha) Frequency Percent 0.01 17 3.4 0.02 30 5.9 0.03 25 4.9 0.04 20 3.9 0.05 20 3.9

498 Appendix 22

0.06 1 0.2 Size of Land (Ha) Frequency Percent 0.09 1 0.2 0.1 10 2 0.15 2 0.4 0.2 15 3 0.3 20 3.9 0.4 9 1.8 0.5 19 3.7 0.7 3 0.6 0.8 1 0.2 1 11 2.2 1.5 3 0.6 2 4 0.8 4.5 1 0.2 Total 212 41.8

Farmland Ownership

Farmland Ownership Frequency Percent Rented 3 0.6 Owned 208 41 Leased 1 0.2 Total 212 41.8

3.4 Household subsistence from land owned/rented

Household subsistence from land owned/ rented Frequency Percent More than enough for your household’s subsistence 42 8.3 Only enough for your household’s subsistence 127 25 Not enough for your household’s subsistence 43 8.5 Total 212 41.8

3.5 Household ownership to vegetable gardens

Vegetable Garden Frequency Percent Valid Percent Yes 32 6.3 6.3 No 475 93.7 93.7 Total 507 100 100

3.6 Household subsistence from vegetables produced in the garden

499 Appendix 22

Household subsistence from vegetables produced in the gardens Frequency Percent More than enough for your household 's subsistence 30 5.9 Only enough for your household’s subsistence 2 0.4 Total 32 6.3

3.7 List of crops planted/harvested and mode of selling of each crop harvested, partial or whole?

List of crops Sell all or part of this crop Total Yes No Morning glory 17 4 21 Long bean 7 5 12 Cucumber 10 6 16 Egg plant 10 5 15 Cabbage 15 10 25 Total 59 30 89

3.8 Location where household crops are sold/marketed

Location Frequency Percent Valid Percent Trader comes to my farm 15 3 48.4 In local market 14 2.8 45.2 On roadside 2 0.4 6.5 Total 31 6.1 100

3.9 Socio-economic situation of most households in the community

Household Situation Frequency Percent Valid Percent Relatively well off 56 11 11 Have just enough to live 354 69.8 69.8 Poor 88 17.4 17.4 Very poor 9 1.8 1.8 Total 507 100 100

3.10 Socio-economic situation of respondent household

Household economic situation Frequency Percent Valid Percent Bit more wealthy than others 21 4.1 4.1 Average situation for this village 317 62.5 62.5 Bit less wealthy than others 85 16.8 16.8 Poor compared to others 84 16.6 16.6

500 Appendix 22

Total 507 100 100

3.11 Indicators of rich/well-off households in community (multiple responses)

Indicators of rich/well-off households in community Frequency Percent Own land /house 227 23 Own farmland 140 14 Modern equipment ( car, motorbike) 170 17 Capital for doing business 76 8 Hotel, guesthouse, restaurant, resort ….. 90 9 Own business 177 18 Regular job with much salary 98 10 Others 17 2 Total 995 100

Specify others Others Frequency Percent Good Health 1 0.1 High Knowledge 13 1.5 Many animal 1 0.1 Support from relative 1 0.1 Tourism Agency 1 0.1 Total 17 2

3.12 Indicators of poor households in the community (multiple responses)

Indicators of poor households in the community Frequency Percent No own land/ house 163 18 No own farmland 90 10 No modern equipment ( car , motorbike) 107 12 No capital for doing business 67 7 No guesthouse, restaurant, hotel…… 6 1 No own business 123 12 Irregular job 214 24 Poor Knowledge 97 11 Others 42 5 Total 909 100

Others (Specify) Others Frequency Percent Bad health 6 0.7 Disability 5 0.6

501 Appendix 22

Elder people 1 0.1 Food Shortage 6 0.7 Chronic illness 4 0.5 Lazy people 6 0.7 Many children 1 0.1 Migration 3 0.4 Play game 4 0.5 Widow 6 0.7 Total 42 5

4. Access to Mobility and Telecommunications 4.1 Household ownership of a bicycle

Bicycle Frequency Percent Valid Percent Yes 221 43.6 43.6 No 286 56.4 56.4 Total 507 100 100

4.2 Household ownership of a motorcycle

Motorcycle Frequency Percent Valid Percent Yes 414 81.7 81.7 No 93 18.3 18.3 Total 507 100 100

4.3 Household ownership to a television

TV Frequency Percent Valid Percent Yes 349 68.8 68.8 No 158 31.2 31.2 Total 507 100 100

4.4 Type of house

Type of House Frequency Percent Valid Percent Concrete 1 floor 112 22.1 22.1 Concrete 2 floors 14 2.8 2.8 Part wood / part concrete 107 21.1 21.1 Wood with tin roof 256 50.5 50.5 Wood with thatch roof 18 3.6 3.6 Total 507 100 100

4.5 Household connection to electricity/power grid

502 Appendix 22

Frequency Percent Valid Percent Yes 470 92.7 92.7 No 37 7.3 7.3 Total 250 100 100

4.6 Number of hours household has electricity

Hours Frequency Percent 10 1 0.2 12 2 0.4 15 2 0.4 16 1 0.2 20 1 0.2 24 463 91.3 Total 470 92.7

4.7 Households’ source of information/communication from national government

Main source of communication from national government Frequency Percent TV 437 60 Radio 166 23 Newspaper 9 1 Face book 120 16 Total 732 100

4.8 Households’ source of information/communication from local government

Main source of communication from local government Frequency Percent TV 306 34 Radio 115 13 Print memo/flyer from commune office 106 12 Village meeting 300 33 Face Book 77 9 Total 904 100

5. Access to Health 5.1 Household’s Morbidity profile: Types of illnesses affecting family members (multiple responses)

Types of illnesses for Adult (male)

Kinds of Disease Frequency Percent Mild diarrhea1 63 9 Severe diarrhea (cannot go to work or school) 8 1

503 Appendix 22

Eye diseases 23 3 Colds, cough, respiratory ailments 348 47 Headache/muscular pain/back pain 247 34 Other illnesses/diseases, specify 44 6 Total 733 100 Types of illnesses for Adult (female)

Kinds of Disease Frequency Percent Mild diarrhea1 82 11 Severe diarrhea (cannot go to work or school) 13 2 Eye diseases 19 3 Colds, cough, respiratory ailments 381 50 Headache/muscular pain/back pain 223 29 Other illnesses/diseases, specify 42 6 Total 760 100

Types of illnesses for Children (under 5 years)

Kinds of Disease Frequency Percent Mild diarrhea1 63 32 Severe diarrhea (cannot go to work or school) 2 1 Eye diseases 20 10 Colds, cough, respiratory ailments 87 44 Headache/muscular pain/back pain 24 12 Other illnesses/diseases, specify 1 1 Total 197 100

5.2 Types of health facilities/personnel where and whom consulted when family member is ill (multiple responses)

Types of health facilities Frequency Percent Friends, relatives or neighbors 4 0.4 Traditional doctor/healer/practitioner 11 1 Pharmacy or shop 317 31 Government health centre or clinic 263 26 Government hospital 196 19 Private doctor 229 22 Total 1,020 100

5.3 Types of domestic water source of household (multiple responses)

Types of domestic water source of household Frequency Percent Rain water 90 14

504 Appendix 22

Traditional/ shallow well 244 37 Deep well 47 7 Purchased 70 11 Canal/ river/pond 10 2 Piped water 202 30 Total 663 100

5.6 Households’ types of toilet facilities

Types of toilet facilities Frequency Percent Valid Percent Pit latrine 2 0.4 0.4 Toilet in house 456 89.9 89.9 Others 4 0.8 0.8 None 45 8.9 8.9 Total 507 100 100

6. Access to Education 6.1 Availability of primary school in the community

Primary school Frequency Percent Valid Percent Yes 507 100 100

6.2 Distance of primary school from houses of household respondents

Distance of primary school Frequency Percent Valid Percent < 1km 351 69.2 69.2 1 to 1.5 km 82 16.2 16.2 More than 1.5 km 74 14.6 14.6 Total 507 100 100

6.3. Availability of secondary school in the community

Secondary school Frequency Percent Valid Percent Yes 362 71.4 71.4 No 145 28.6 28.6 Total 507 100 100

6.4 Distance of secondary school from houses of household respondents

Distance of secondary school Frequency Percent Valid Percent < 1km 237 46.7 65.5 1 to 1.5 km 72 14.2 19.9 More than 1.5 km 53 10.5 14.6 Total 362 71.4 100

505 Appendix 22

7. Household Income and Expenditures 7.1 Main source of income of households

Main source of income Valid Frequency Percent Percent Farming 67 13.2 13.2 Fishing 10 2 2 Livestock 14 2.8 2.8 Forest activities 1 0.2 0.2 Retail shop/kiosk for villagers 52 10.3 10.3 Retail shop/kiosk for tourists 35 6.9 6.9 Service/guide to tourists 21 4.1 4.1 Transportation for tourists 31 6.1 6.1 Business enterprise 27 5.3 5.3 Selling or renting land 17 3.4 3.4 Casual work 70 13.8 13.8 Wages or salary from full-time 129 25.4 25.4 work Remittances and support from 8 1.6 1.6 relatives Other 25 4.9 4.9 Total 507 100 100

Describe of Business

Describe business Frequency Percent Cloth selling shop 1 0.2 Coffee shop 2 0.4 Crab selling shop 1 0.2 Cut hair shop 1 0.2 Goods Wholesale 2 0.4 Guest House 1 0.2 Laundry shop 1 0.2 Motor cleaning shop 1 0.2 Motor repairing shop 2 0.4 Phone Shop 1 0.2 Restaurant 4 0.8 Food sale 4 0.8 Sea food sale 2 0.4 Vegetable sale shop 2 0.4 Weaving shop 1 0.2 Wedding Embellishment 1 0.2 Total 27 5.3

506 Appendix 22

Indicate occupation

Occupation Frequency Percent Boat driver 1 0.2 Car cleaning shop staff 1 0.2 Casino worker 5 1 Coffee shop staff 1 0.2 Private company driver 2 0.4 Factory worker 8 1.6 Government officer 35 6.9 Hospital staff 1 0.2 Hotel worker 6 1.2 Police officer 6 1.2 Port staff 4 0.8 Private bank officer 2 0.4 Private bank staff 3 0.6 Private company driver 1 0.2 Private company security staff 2 0.4 Private company staff 27 5.3 Restaurant cooker 3 0.6 Restaurant worker 1 0.2 Shop cleaner 2 0.4 Shop worker 10 2 Solider 1 0.2 Teacher 7 1.4 Total 129 25.4

Other specify

Other specify Frequency Percent Sell crab along the beach 3 0.6 Sell crab in the market 4 0.8 Sell fish in the market 6 1.2 Sell fruit along the beach 6 1.2 Sell fruit in the market 3 0.6 Sell vegetable in the market 3 0.6 Total 25 4.9

7.2 Other sources of household income (multiple responses)

507 Appendix 22

Other sources Frequency Percent Farming 85 26 Fishing 32 10 Livestock 38 11 Retail shop/kiosk for villagers 22 7 Retail shop/kiosk for tourists 11 3 Service/guide to tourists 7 2 Transportation for tourists 11 3 Business enterprise 19 6 Selling or renting land 4 1 Casual work 41 12 Wages or salary from full-time work 42 13 Remittances and support from 1 0.3 relatives Other 20 6 Total 333 100

7.3 Amount of monthly and annual income from other non-tourism income sources of households (multiple responses);

Monthly Income

Income Rang (US) Income Source 1001- 2001- 3001- 4001- < 1000 2000 3000 4000 5000 Frequency Percent Farming 148 148 20 Fishing 31 31 4.2 Livestock 52 1 53 7.2 Forest 4 4 0.5 Business 23 23 3.1 Tenting equipment 1 1 0.1 Selling or Renting 17 1 1 19 2.6 land Casual work 111 111 15 Wage/Salary 124 2 1 127 17 Remittance 9 9 1.2 Others 210 2 1 1 1 215 29 Total 730 6 3 1 1 741 100

508 Appendix 22

Yearly Income

Income Rang (US)

Freque Income Source 1001- 2001- 3001- 4001- 5001- 6001- 7001- 8001- 9001- Percent < 1000 >10000 ncy 2000 3000 4000 5000 6000 7000 8000 9000 10000

Farming 126 20 8 1 1 1 2 159 21 Fishing 10 9 7 2 1 1 1 31 4 Livestock 40 17 2 59 8 Forest 1 1 1 3 0.4 Business 1 7 6 6 1 1 1 23 3 Tenting equipment 1 1 0.1 Selling or Renting land 2 6 1 2 1 2 2 3 19 3 Casual work 21 50 22 10 6 1 1 1 112 15 Wage/Salary 4 29 36 16 11 11 2 4 2 3 4 122 16 Remittance 1 5 2 1 9 1 Others 29 62 49 18 20 15 4 3 2 12 214 28 Total 235 207 134 56 41 30 3 11 7 7 21 752 100

7.4. Amount of monthly and annual household income from directly tourism-related sources of income

Monthly Income

Income Rang (US) Income Source < 1000 1001-2000 2001-3000 3001-4000 4001-5000 Frequency Percent Renting out 3 2 5 4 Cooking 11 2 13 10

509 Appendix 22

Selling food_ beverage 31 1 2 1 35 28 Selling handicraft 3 1 1 5 4 Selling produced alcohol 1 1 0.8 Tour guiding 41 2 1 44 35 Other 23 1 24 19 Total 113 9 4 1 127 100

Yearly Income

Income Rang (US)

Income Source 1001- 2001- 3001- 4001- 5001- 6001- 7001- 8001- 9001- Frequency Percent < 1000 >10000 2000 3000 4000 5000 6000 7000 8000 9000 10000

Renting out 1 1 1 1 1 5 4 Cooking 1 1 2 3 2 4 13 10 Selling food_ beverage 12 4 2 3 2 3 2 1 6 35 28 Selling handicraft 1 1 1 2 5 4 Selling produced alcohol 1 1 0.8 Tour guiding 3 12 11 9 3 2 4 44 35 Other 2 3 8 1 5 2 2 1 24 19 Total 4 20 27 15 21 9 5 5 3 18 127 100

510 Appendix 22

8.Consultation on Subproject and Tourism Development 8.1 Household Respondents’ Awareness on the Subproject

Frequency Percent Valid Percent Yes 49 9.7 9.7 No 458 90.3 90.3 Total 507 100 100

8.2 If yes, means/media of getting awareness on the subproject;

Means of getting awareness Frequency Percent Through Local radio 6 1.2 Through local authorities 21 4.2 Through meeting with local authorities 6 1.2 Through relative 5 1 Through villager 11 2.2 Total 49 9.7

8.3 Respondents’ knowledge of the subproject plan

Respondents’ knowledge Frequency Percent Road improvement and Drainage system 25 5 Improve landscape along the beach 6 1.2 Land fill improvement 4 0.8 Port construction 4 0.8 Septic tank installation 10 2 Total 49 9.7

8.4 Subprojects Benefits to community, yes? And reasons why beneficial to community? (multiple responses)

Subprojects Benefits Frequency Percent Valid Percent Yes 507 100 100

Reasons why beneficial to community

Reasons Frequency Percent Good environment 253 19 Good health 224 17 Attract more tourist 206 16 Easy to travel 213 16 Easy to do business 203 15 Increase income 222 17 Total 1,321 100

8.6 People in community who will benefit from sub-project

511

Frequency Percent Boat owner 22 3.1 Bus owner 4 0.6 Business owner 78 10.8 Guest House/hotel owner 36 5 Foreign investor 7 1 Massage owner 2 0.3 People living in project area 459 63.8 Pier owner 3 0.4 Restaurant owner 6 0.8 Seafood seller along the beach 22 3.1 Souvenir Shop owner 7 1 Government 10 1.4 Taxi driver 1 0.1 Moto taxi driver 6 0.8 Tour agency 7 1 Tourists 45 6.3 Tuk Tuk driver 2 0.3 Fisher 2 0.3 Total 719 100

8.7 Natural of benefit per type of people

Frequency Percent Good health 143 19.9 Attract more tourists 88 12.2 Increase income 41 5.7 Good environment 83 11.5 Easy to do business 52 7.2 Easy to earn 16 2.2 Easy to sell goods 134 18.6 Easy to travel 69 9.6 Good hygiene 17 2.4 Increase job 71 9.9 Increase tax 5 0.7 Total 719 100

8.8 Benefit of Subproject to respondent household? Yes, why? No why not (multiple responses)

Frequency Percent Valid Percent Yes 445 87.8 87.8 No 62 12.2 12.2 Total 507 100 100 Yes. Why?

512

Reasons Frequency Percent Lose business 70 27 Lose clients 63 24 Difficult to travel 13 5 Noise 40 15 Dirty 38 15 Dust 38 15 Total 262 100

No. why?

Reasons Frequency Percent Far from sub-project area 194 56 Clearly study about mitigation measure 155 44 Total 349 100

8.10 Subproject’s impacts to household respondent after subproject completion (multiple responses)

Frequency Percent Valid Percent No 507 100 100

8.11 Recommendations on changes of subproject to make it more beneficial and/or avoid its adverse impact to household respondent (multiple responses)

Recommendations Frequency Percent Resettlement for affected household by project 116 15 Expand existing road 22 3 Install traffic sign 40 5 Construct big drainage system 36 5 Urgently implement project 199 26 Low payment for waste collect 118 16 Regularly collect waste 108 14 Put garbage can in the village 120 16 Total 759 100

9. Willingness-to-pay for sanitation and other services 9.1 Household respondents’ approval of the subproject item included in subproject description Frequency Percent Valid Percent Yes 480 94.7 94.7 No 10 2 2 Don’t know 8 1.6 1.6 It depends: explain 9 1.8 1.8 Total 507 100 100

513

9.2 Willingness to pay for additional items to subproject features

Frequency Percent Yes 363 71.6 No 24 4.7 Don't know 93 18.3 Total 480 94.7

9.3 How much is amount of user/rental fee per month?

How much ( riels) Frequency Percent Valid Percent 500 4 0.8 1.1 700 1 0.2 0.3 1,000 101 19.9 27.8 1,500 8 1.6 2.2 2,000 51 10.1 14 3,000 21 4.1 5.8 4,000 28 5.5 7.7 5,000 3 0.6 0.8 6,000 4 0.8 1.1 8,000 18 3.6 5 10,000 29 5.7 8 12,000 11 2.2 3 16,000 5 1 1.4 20,000 42 8.3 11.6 24,000 1 0.2 0.3 32,000 1 0.2 0.3 40,000 22 4.3 6.1 50,000 3 0.6 0.8 60,000 3 0.6 0.8 80,000 6 1.2 1.7 120,000 1 0.2 0.3 Total 363 71.6 100

9.4 Other means of covering up user fees (multiple responses)

Frequency Percent Valid Percent Increase site entry fees by 295 58.2 81.3 Increase kiosk rental fee by 15 3 4.1 Commune / district government budget 53 10.5 14.6 Total 363 71.6 100

9.5 Willingness to participate in consultation meetings with business owners

Frequency Percent Valid Percent Yes 453 89.3 89.3 No 32 6.3 6.3

514

Don't know 22 4.3 4.3 Total 507 100 100

9.6 Experiences with tourists

Experiences with tourists Frequency Percent Valid Percent Positive 376 74.2 74.2 Neither positive nor negative 117 23.1 23.1 Negative 3 0.6 0.6 Don’t know 11 2.2 2.2 Total 507 100 100

9.7 Preference to have more tourists visits the area, Yes, why? (multiple responses)

Frequency Percent Yes 498 98.2 No 4 0.8 Don't know 5 1 Total 507 100

Yes, Why (multiple responses)

Reason Frequency Percent We like showing them some aspects of our culture 166 20 They make our daily lives more interesting 191 23 They enable us to earn additional income 459 54 They give us gifts and other material benefits 32 4 Total 848 100

No, why not (multiple responses)

Reason Frequency Percent They interrupt our daily lives, come too often, and invade our 18 11 privacy (including taking photographs) They are not polite and ignore our customs by the way they 11 6 behave or dress They undermine our culture 26 15 They spend too little money here/We do not get much income 4 2 from them They are a bad influence on our children 32 19 They take away or take advantage of our women 13 8 They bring diseases 1 1 They bring in drugs 41 24 They have a bad effect on our natural environment 24 14 Total 170 100

9.8 Three most important things you would like to show to tourists (multiple responses)

515

Frequency Percent Khmer culture 68 9 Khmer product 128 16 Local security 61 8 Tourism area and service 409 52 Local environment 120 15 Total 786 100

9.9 Three most important things you would not like tourists to do in your community (multiple responses)

Frequency Percent Don't use drug and smoke 317 38 Don't traffic sex and sexual violence 266 32 Don't look down and discriminate Khmer people 15 2 Don't damage environment 55 7 Don't destroy Khmer culture 8 1 Don't break law 57 7 Don't drive over speeding 90 11 Don't play game 28 3 Total 836 100

9.10 Preferred nature of tourism activities to gain income (multiple responses)

Frequency Percent Cooking and selling cooked food (restaurants/eating stalls) 191 26 Selling food and beverages 293 41 Selling handicrafts (Handicraft shops/stalls) 1 0.1 Tour-guiding/trekking services 204 28 Cultural performances 10 1 Other 22 3 Total 721 100

Other, Specify

Frequency Percent Photo designer 1 0.2 Taxi driver 13 2.6 Tuk Tuk driver 8 1.6 Total 22 4.4 10. Respondents’ Concerns with Natural Disasters and Climate Change 10.1 House/business/shops affected by typhoon

Frequency Percent Valid Percent Yes 17 3.4 3.4 No 490 96.6 96.6 Total 507 100 100

516

10.2 Yes, frequency of occurrence

Time Frequency Percent 1 time 14 2.8 2 time 1 0.2 2 times 1 0.2 3 times 1 0.2 Total 17 3.4

10.3 Total amount per year spent for house/shops/business repairs due to typhoons, storm surge, erosions etc.

Amount (US) Frequency Percent 10 1 0.2 100 1 0.2 1500 1 0.2 20 3 0.6 2000 1 0.2 250 1 0.2 30 2 0.4 300 1 0.2 50 5 1 Total 17 3.4

11.Training and Capacity-Building 11.1 Household member receiving training from government/institutions, if yes, Who among household member? Relationship of Household respondent with HH member who participated in training and gender

Frequency Percent Valid Percent Yes 136 26.8 26.8 No 343 67.7 67.7 Don't know 28 5.5 5.5 Total 507 100 100

Relationship of Household respondent

Relationship Frequency Percent Valid Percent Head of Household 112 22.1 82.4 Son 18 3.6 13.2 Parents 4 0.8 2.9 Sibling ( sister/brother) 1 0.2 0.7 Other 1 0.2 0.7 Total 136 26.8 100

Gender

517

Sex Frequency Percent Valid Percent Male 82 16.2 60.3 Female 54 10.7 39.7 Total 136 26.8 100

Type of training received by each HH member who participated? List of training (multiple responses) and if utilized or not;

Type of training Frequency Percent Agricultural skill 67 13.3 Animal Raising skill 22 4.4 Administrative skill 1 0.2 Bank and Finance skill 2 0.4 Business management skill 1 0.2 Communicate skill 1 0.2 Computer skill 5 1 Driving skill 1 0.2 Engineering skill 1 0.2 Environment skill 2 0.4 Food processing skill 1 0.2 Gender Development 2 0.4 Guide Skill 1 0.2 Reproductive health 23 4.6 Hospitality skill 2 0.4 Hygiene and sanitation 3 0.6 Leadership skill 1 0.2 Total 136 26.8

Utilized or not

Frequency Percent Valid Percent Yes 119 23.5 87.5 No 17 3.4 12.5 Total 136 26.8 100 11.2 Willingness for HH members to participate in project-related training and capacity-building

Frequency Percent Valid Percent Yes 253 49.9 49.9 No 202 39.8 39.8 Don't know 52 10.3 10.3 Total 507 100 100

11.3 Who among HH members would household respondent recommend for training and capacity-building in project; their gender

518

Frequency Percent Valid Percent Head of Household 163 32.1 64.4 Son 48 9.5 19 Parents 35 6.9 13.8 Sibling ( Sister/ Brother) 4 0.8 1.6 Other 3 0.6 1.2 Total 253 49.9 100

Gender Sex Frequency Percent Valid Percent Male 150 29.6 59.3 Female 103 20.3 40.7 Total 253 49.9 100

Type and nature of training and capacity-building that HH respondent recommend for HH members participating in these activities. (multiple responses)

Type and nature of training Frequency Percent Leadership skill 1 0.2 Public Admin and finance skill 5 1 Agricultural skill 67 13 Animal raising skill 26 5 Climate Change Training 1 0.2 Communicate skill 7 1 Computer skill 15 3 Cooking skill 4 1 Electricity skill 4 1 Engineering skill 2 0.4 Food processing skill 3 0.6 Guide skill 1 0.2 Hospitality skill 8 1.6 Language skill 99 20 Make up skill 2 0.4 Management skill 1 0.2 Music skill 1 0.2 Receptionist skill 3 0.6 Sewing skill 2 0.4 Value chain skill 1 0.2 Total 253 49.9

12. Community Development and Participation 12.1 Three top priorities for improvement/development in the community (multiple responses)

Top Priorities for Improvement Frequency Percent Clean Water Facility 232 19.3

519

Drainage System Construction 76 6.3 Road Safety Improvement 13 1.2 Education Training Center Building 10 0.8 Electricity Facility 60 5 Environmental Improvement 153 12.7 Factory Building 33 2.7 Hospital Building 39 3.2 Tourism Port Construction 3 0.2 Tourism Service Improvement 36 3 Market Building 17 1.4 Community Participation 14 1.3 Waste Water Purification Facility 11 0.9 Resettlement to HHs affected by Project 15 1.2 School Building 40 3.3 Social Security 127 10.6 Septic Tank Installation 6 0.5 Road Maintenance 2 0.2 Road Construction 268 22 Waste Collection Service Improvement 48 4 Total 1203 100

12.2 Groups or community activities that household members participate in (multiple response)

Groups or community activities Frequency Percent Women’s Union/Association 2 2 Youth League/Association 20 22 Farmers Association 2 2 Government-initiated activities 52 58 Other 13 15 Total 89 100

2. Traffic Count Survey Data

520 TRAFFIC COUNT IN SIHANOUKVILLE SUMMARY OF THE NUMBER OF VEHICLES RUNNING ON A SECTION OF ROAD

Or Chheurteal Station Name: Or Chheurteal Beach Road No.: Section: End of Existing Or Chheurteal Beach Day/month/year: 21/01/2018 Direction: Right Hand Side

Time to start Light truck ( 2 Light truck ( 2 Motorbike with Passenger Heavy truck ( Small Bus < Trailer ( The direction of running vehicles (from to) counting Bicycle Motorbike Super tuk tuk Pickup truck axles, 4 axles, 6 Bus>25 seats trailer car >3 axles) 25 seats container ) (hour) wheel) wheel)

Right hand side of end of existing Or Chheurteal 6h →7h 5 30 11 3 1 2 7h →8h 1 56 6 3 17 1 1 4 2 8h →9h 2 81 6 2 25 1 7 3 9h →10h 2 150 20 5 36 6 1 7 10h →11h 1 190 22 4 45 8 2 10 2 11h →12h 0 127 22 8 40 4 1 8 12h →13h 168 27 8 25 10 1 14 13h →14h 3 198 15 2 43 8 2 12 14h →15h 7 270 20 10 45 3 4 10 15h →16h 4 120 10 7 35 6 5 6 1 16h →17h 9 250 36 4 50 5 3 10 17h →18h 210 7 40 4 2 7 18h →19h 150 5 5 39 3 4 2 19h →20h 122 9 25 9 3 20h →21h 95 3 9 2 2 21h →22h 50 5 2 3 22h →23h 23h →0h 0h →1h 1h →2h 2h →3h 3h →4h 4h →5h 12 3 5h →6h 21 4 Total 34 2300 231 100 444 68 23 0 2 104 8 0 Station Name: Or Chheurteal Beach Road No.: Section: End of Existing Or Chheurteal Beach Day/month/year: 21/01/2018 Direction: Left Hand Side

Time to start Light truck ( 2 Light truck ( 2 Motorbike with Passenger Heavy truck ( Small Bus < Trailer ( The direction of running vehicles (from to) counting Bicycle Motorbike Super tuk tuk Pickup truck axles, 4 axles, 6 Bus>25 seats trailer car >3 axles) 25 seats container ) (hour) wheel) wheel)

Left hand side of end of existing Or Chheurteal 6h →7h 2 30 3 2 7h →8h 1 65 11 1 12 1 1 1 1 8h →9h 1 82 10 1 12 4 9 1 9h →10h 6 141 18 5 17 2 1 2 10h →11h 75 17 3 19 4 9 1 11h →12h 2 95 16 2 27 6 6 12h →13h 1 143 18 7 22 4 1 8 13h →14h 2 153 15 2 22 6 1 5 1 1 14h →15h 3 260 17 3 40 4 1 1 8 15h →16h 2 161 16 5 30 9 2 2 16h →17h 1 99 14 7 15 3 5 17h →18h 4 120 16 3 30 7 1 1 5 18h →19h 115 13 1 24 4 1 4 1 19h →20h 2 90 4 6 2 3 20h →21h 80 5 5 15 5 2 1 21h →22h 40 4 2 12 3 1 3 22h →23h 23h →0h 0h →1h 1h →2h 2h →3h 3h →4h 4h →5h 5 7 2 5h →6h 15 8 6 Total 27 1769 212 49 309 61 12 0 2 74 5 3 Total Both sides 61 4069 443 149 753 129 35 0 4 178 13 3 Date 21/01/2018 ( Sunday) Otres Station Name: Otres Corner Road No.: Section: Otres Corner Day/month/year: 21/01/2018 Direction: Right Hand Side Time to start Light truck ( 2 Light truck ( 2 Motorbike with Passenger Heavy truck ( Small Bus < Trailer ( The direction of running vehicles (from to) counting Bicycle Motorbike Super tuk tuk Pickup truck axles, 4 axles, 6 Bus>25 seats trailer car >3 axles) 25 seats container ) (hour) wheel) wheel) Right hand side of Otres Corner 6h →7h 15 5 5 3 2 7h →8h 57 7 4 6 3 8h →9h 3 69 17 2 5 3 2 9h →10h 80 20 3 10 2 1 6 1 10h →11h 2 120 18 10 10 5 1 1 5 1 11h →12h 1 160 25 10 15 2 8 1 12h →13h 180 35 6 30 5 21 13h →14h 2 210 50 25 50 30 11 15 2 7 14h →15h 3 175 35 18 60 20 11 1 10 2 6 15h →16h 2 200 47 14 67 18 5 25 1 6 16h →17h 5 140 45 13 55 16 7 2 13 1 3 17h →18h 1 151 39 18 55 7 9 10 2 10 18h →19h 100 22 13 27 4 3 1 6 2 4 19h →20h 70 17 12 16 6 4 1 1 1 2 20h →21h 50 30 20 10 5 2 5 21h →22h 25 19 15 9 4 3 22h →23h 23h →0h 0h →1h 1h →2h 2h →3h 3h →4h 4h →5h 5h →6h 8 3 2 1 Total 19 1810 434 188 430 124 52 6 1 131 15 46

Station Name: Otres Corner Road No.: Section: Otres Corner Day/month/year: 21/01/2018 Direction: Left Hand Side Time to start Light truck ( 2 Light truck ( 2 Motorbike with Passenger Heavy truck ( Small Bus < Trailer ( The direction of running vehicles (from to) counting Bicycle Motorbike Super tuk tuk Pickup truck axles, 4 axles, 6 Bus>25 seats trailer car >3 axles) 25 seats container ) (hour) wheel) wheel) Left hand side of Otres Corner 6h →7h 1 10 5 2 4 1 1 7h →8h 1 46 10 2 5 4 8h →9h 4 80 15 5 10 5 5 2 9h →10h 150 16 5 25 5 1 1 8 10h →11h 5 160 20 11 30 4 1 12 1 11h →12h 145 25 6 25 1 1 8 12h →13h 4 120 30 15 35 10 1 10 4 13h →14h 4 170 30 20 55 15 5 3 10 9 7 14h →15h 5 150 45 15 70 10 5 4 1 12 3 4 15h →16h 187 35 16 81 15 6 11 3 3 16h →17h 3 215 27 14 70 16 3 2 2 15 6 17h →18h 3 210 35 12 77 23 6 1 2 19 1 10 18h →19h 150 30 7 55 9 10 4 9 2 19h →20h 100 25 39 5 6 2 20h →21h 55 10 5 15 1 2 5 21h →22h 30 5 9 5 2 22h →23h 23h →0h 0h →1h 1h →2h 2h →3h 3h →4h 4h →5h 5 2 1 5h →6h 7 4 1 Total 30 1990 369 144 603 119 41 11 20 136 10 38 Total Both Sides 49 3800 803 332 1033 243 93 17 21 267 25 84 Date 22/01/2018 (Monday) Or Chheurteal Station Name: Or Chheurteal Beach Road No.: Section: End of Existing Or Chheurteal Beach Day/month/year: 22/01/2018 Direction: Right Hand Side Time to start Light truck ( 2 Light truck ( 2 Motorbike with Passenger Heavy truck ( Small Bus < Trailer ( The direction of running vehicles (from to) counting Bicycle Motorbike Super tuk tuk Pickup truck axles, 4 axles, 6 Bus>25 seats trailer car >3 axles) 25 seats container ) (hour) wheel) wheel)

Right hand side of end of existing Or Chheurteal 6h →7h 1 17 5 1 5 1 7h →8h 51 6 1 6 1 3 5 8h →9h 1 56 6 3 10 4 2 9h →10h 1 90 9 4 16 2 6 1 10h →11h 5 114 27 5 26 5 1 1 10 11h →12h 4 104 16 5 31 3 7 12h →13h 2 144 20 9 19 4 1 3 7 13h →14h 2 105 10 5 20 3 1 3 1 14h →15h 4 127 18 7 21 2 2 6 1 15h →16h 5 180 24 4 31 4 3 2 16h →17h 2 105 21 8 32 3 3 7 17h →18h 1 88 22 2 29 3 3 7 3 18h →19h 6 219 19 6 38 4 2 19h →20h 167 10 7 42 2 5 20h →21h 176 16 6 46 4 4 21h →22h 132 15 5 12 2 2 22h →23h 23h →0h 0h →1h 1h →2h 2h →3h 3h →4h 4h →5h 5 2 1 5h →6h 10 2 2 2 Total 34 1890 248 81 386 42 17 5 0 72 13 0

Station Name: Or Chheurteal Beach Road No.: Section: End of Existing Or Chheurteal Beach Day/month/year: 22/01/2018 Direction: Left Hand Side Time to start Light truck ( 2 Light truck ( 2 Motorbike with Passenger Heavy truck ( Small Bus < Trailer ( The direction of running vehicles (from to) counting Bicycle Motorbike Super tuk tuk Pickup truck axles, 4 axles, 6 Bus>25 seats trailer car >3 axles) 25 seats container ) (hour) wheel) wheel) Left hand side of end of existing Or Chheurteal 6h →7h 1 36 2 1 2 1 7h →8h 3 60 7 2 5 1 4 8h →9h 49 13 4 11 2 1 11 1 9h →10h 1 71 12 5 6 1 1 6 1 10h →11h 87 17 4 7 2 1 9 1 11h →12h 2 82 10 4 18 1 1 9 12h →13h 5 140 26 7 26 3 2 7 13h →14h 1 72 6 5 13 1 2 1 7 2 14h →15h 2 127 17 3 24 4 2 7 15h →16h 7 188 25 3 19 2 1 9 16h →17h 3 120 15 5 17 3 4 17h →18h 116 18 3 23 5 2 7 18h →19h 6 159 18 4 19 7 2 19h →20h 2 136 10 6 17 3 1 3 20h →21h 130 7 2 26 2 2 1 21h →22h 110 5 4 15 2 2 22h →23h 23h →0h 0h →1h 1h →2h 2h →3h 3h →4h 4h →5h 8 1 1 5h →6h 15 1 1 2 Total 33 1706 210 64 250 39 12 0 3 90 6 0 Total Both Sides 67 3596 458 145 636 81 29 5 3 162 19 0 Date 22/01/2018 (Monday) Otres Station Name: Otres Corner Road No.: Section: Otres Corner Day/month/year: 22/01/2018 Direction: Right Hand Side Time to start Light truck ( 2 Light truck ( 2 Motorbike with Passenger Heavy truck ( Small Bus < Trailer ( The direction of running vehicles (from to) counting Bicycle Motorbike Super tuk tuk Pickup truck axles, 4 axles, 6 Bus>25 seats trailer car >3 axles) 25 seats container ) (hour) wheel) wheel)

Right hand side of Otres Corner 6h →7h 1 41 13 11 21 6 1 14 3 7h →8h 59 7 6 10 3 1 8 1 8h →9h 3 116 14 14 32 12 3 1 13 1 2 9h →10h 5 160 24 17 47 15 9 2 3 10 3 6 10h →11h 186 38 27 60 15 9 2 1 14 2 6 11h →12h 2 243 48 23 86 8 4 4 16 5 12h →13h 1 212 64 29 43 17 3 2 2 12 2 2 13h →14h 2 177 35 18 46 16 9 2 4 9 4 3 14h →15h 201 44 20 60 15 7 2 2 9 1 1 15h →16h 110 12 8 7 2 1 2 1 5 1 2 16h →17h 120 30 15 5 2 1 3 17h →18h 112 15 10 8 2 1 3 18h →19h 80 15 10 8 2 1 3 19h →20h 67 7 10 12 5 1 2 20h →21h 40 20 15 5 1 21h →22h 30 10 5 7 2 22h →23h 23h →0h 0h →1h 1h →2h 2h →3h 3h →4h 4h →5h 10 1 2 2 5h →6h 12 2 5 7 Total 14 1976 399 245 466 117 56 13 18 121 22 23

Station Name: Otres Corner Road No.: Section: Otres Corner Day/month/year: 22/01/2018 Direction: Left Hand Side Time to start Light truck ( 2 Light truck ( 2 Motorbike with Passenger Heavy truck ( Small Bus < Trailer ( The direction of running vehicles (from to) counting Bicycle Motorbike Super tuk tuk Pickup truck axles, 4 axles, 6 Bus>25 seats trailer car >3 axles) 25 seats container ) (hour) wheel) wheel) Left hand side of Otres Corner 6h →7h 65 5 4 4 3 1 1 7 7h →8h 113 8 10 17 1 1 15 8h →9h 96 24 15 29 9 5 1 5 10 4 9h →10h 2 105 19 14 31 9 5 2 12 10h →11h 145 24 16 49 16 9 2 17 1 8 11h →12h 6 148 40 24 55 8 8 1 7 10 3 1 12h →13h 172 50 26 49 9 6 1 5 11 1 1 13h →14h 1 162 36 29 43 9 11 1 3 17 5 1 14h →15h 140 37 18 50 17 5 5 6 10 1 1 15h →16h 110 30 20 15 7 7 16h →17h 102 24 12 11 5 3 17h →18h 95 45 30 20 8 2 5 18h →19h 120 47 32 25 9 10 12 19h →20h 90 35 20 25 5 2 5 2 20h →21h 65 10 20 7 2 21h →22h 40 10 5 3 1 22h →23h 23h →0h 0h →1h 1h →2h 2h →3h 3h →4h 4h →5h 8 2 1 5h →6h 25 5 2 2 Total 9 1801 451 298 435 118 54 9 32 139 27 14 Total Both Sides 23 3777 850 543 901 235 110 22 50 260 49 37 Note : 1. Motorbike with Trailer means motor TUKTUK 2. Super TUK TUK means TUKTUK taxi II. FINANCIAL DATA COST ESTIMATE OF OUTPUT 1

Amount excl. Tax Amount incl. Category ADB Loan Government Works Goods Resettle- tax tax (incl. tax) (incl tax) Package Package ment (incl. tax) (incl. tax) Civil Works/ Equipment/ No. Activity USD 10% USD Resettlement USD USD USD USD USD Kep Province 1.1: K1 Kep Solid Waste Management Improvements 1.1.1 Access road to site, concrete, 6m wide to junction, 4m wide after, 3km 800,000 80,000 880,000 Civil Works 880,000 880,000 1.1.2 Clear site 50,000 5,000 55,000 Civil Works 55,000 55,000 1.1.3 Develop 6 cells (earthworks): 2,000,000 200,000 2,200,000 Civil Works 2,200,000 2,200,000 1.1.4 Site roads 100,000 10,000 110,000 Civil Works 110,000 110,000 1.1.5 Site drains 200,000 20,000 220,000 Civil Works 220,000 220,000 1.1.6 Retire & compact existing waste into 1 cell: 100,000 10,000 110,000 Civil Works 110,000 110,000 1.1.7 Leachate pond (lined): 200,000 20,000 220,000 Civil Works 220,000 220,000 1.1.8 Leachate recirculation system: 200,000 20,000 220,000 Civil Works 220,000 220,000 1.1.9 Site office & toilet 200,000 20,000 220,000 Civil Works 220,000 220,000 1.1.10 Sorting & recycling area (conc pad, roofed) 200,000 20,000 220,000 Civil Works 220,000 220,000 1.1.11 Site fence 120,000 12,000 132,000 Civil Works 132,000 132,000 1.1.12 Power supply 200,000 20,000 220,000 Civil Works 220,000 220,000 1.1.13 Water supply 100,000 10,000 110,000 Civil Works 110,000 110,000 1.1.14 Hazardous waste area & incinerator 250,000 25,000 275,000 Civil Works 275,000 275,000 1.1.15 Septage treatment facility 1,000,000 100,000 1,100,000 Civil Works 1,100,000 1,100,000 1.1.16 3 collection vehicles 300,000 30,000 330,000 Equipment 330,000 330,000 1.1.17 1 waste handling bulldozer 150,000 15,000 165,000 Equipment 165,000 165,000 1.1.18 Septage vehicles 200,000 20,000 220,000 Equipment 220,000 220,000 1.1.19 Resettlement - base costs - - Resettlement - - Subtotal 6,370,000 637,000 7,007,000 7,007,000 - 6,292,000 715,000 - Preah Sihanouk Province 1.2: S1 Preah Sihanouk Seaside Access and Environmental Improvements 1.2.1 Section 1 – Main Occheuteal beach 1.2.1.1 Sidewalk improvement both sides of road, 1200m. 60,000 6,000 66,000 Civil Works 66,000 66,000 1.2.1.2 Street lighting, 25m intervals 192,000 19,200 211,200 Civil Works 211,200 211,200 1.2.3 Section 2 – in front of Sokha land 1.2.3.1 Demolish & remove existing seaward side footpath, 1750m 87,500 8,750 96,250 Civil Works 96,250 96,250 1.2.3.2 New 2.5m footpath seaward side, 1750m 50,000 5,000 55,000 Civil Works 55,000 55,000 1.2.3.3 Extend road width, 2 m 1750 m 17,500 1,750 19,250 Civil Works 19,250 19,250 1.2.3.4 New road seal full 8m width, 1750m 525,000 52,500 577,500 Civil Works 577,500 577,500 1.2.3.5 Box culvert road drain seaward side inc manholes & outfalls - - - Civil Works - - 1.2.3.6 Street lighting, 25m intervals 280,000 28,000 308,000 Civil Works 308,000 308,000 1.2.3 Section 3 – end of Occheuteal 1.2.3.1 New 8m wide concrete road, 340m 136,000 13,600 149,600 Civil Works 149,600 149,600 1.2.3.2 3.5m footpaths both sides, 340m 102,000 10,200 112,200 Civil Works 112,200 112,200 1.2.3.3 Box culvert road drain both sides inc manholes & outfalls 68,000 6,800 74,800 Civil Works 74,800 74,800 1.2.3.4 Sidewalk improvement both sides of road, 340m. 17,000 1,700 18,700 Civil Works 18,700 18,700 1.2.3.5 Street lighting, 25m intervals 56,000 5,600 61,600 Civil Works 61,600 61,600 1.2.4 Section 4 - Peninsula 1.2.4.1 Rehabilitate footpath around front of peninsula, 200m 100,000 10,000 110,000 Civil Works 110,000 110,000 1.2.5 Section 5 - In front of Queenco land 1.2.6.1 New 8m wide concrete road, 400m 160,000 16,000 176,000 Civil Works 176,000 176,000 Amount excl. Tax Amount incl. Category ADB Loan Government Works Goods Resettle- tax tax (incl. tax) (incl tax) Package Package ment (incl. tax) (incl. tax) Civil Works/ Equipment/ No. Activity USD 10% USD Resettlement USD USD USD USD USD 1.2.5.2 3.5m footpaths both sides, 400m 120,000 12,000 132,000 Civil Works 132,000 132,000 1.2.5.3 Box culvert road drain both sides inc manholes & outfalls 80,000 8,000 88,000 Civil Works 88,000 88,000 1.2.5.4 Sidewalk improvemen one side of road, 400m. 20,000 2,000 22,000 Civil Works 22,000 22,000 1.2.5.5 Street lighting, 25m intervals 64,000 6,400 70,400 Civil Works 70,400 70,400 1.2.6 Section 6 – Otres 1 1.2.6.1 New 8m wide concrete road, 850m 340,000 34,000 374,000 Civil Works 374,000 374,000 1.2.6.2 3.5m footpaths both sides, 850m 255,000 25,500 280,500 Civil Works 280,500 280,500 1.2.6.3 Box culvert road drain both sides inc manholes & outfalls 170,000 17,000 187,000 Civil Works 187,000 187,000 1.2.6.4 Sidewalk improvemenboth sides of road where possible, 1000m. 50,000 5,000 55,000 Civil Works 55,000 55,000 1.2.6.5 Street lighting, 25m intervals 136,000 13,600 149,600 Civil Works 149,600 149,600 1.2.7 Section 7 – Undeveloped stretch 1.2.7.1 New 8m wide concrete road, 1750m 700,000 70,000 770,000 Civil Works 770,000 770,000 1.2.7.2 3.5m footpaths both sides, 1750m 525,000 52,500 577,500 Civil Works 577,500 577,500 1.2.7.3 Box culvert road drain both sides inc manholes & outfalls 350,000 35,000 385,000 Civil Works 385,000 385,000 1.2.7.4 Street lighting, 25m intervals 280,000 28,000 308,000 Civil Works 308,000 308,000 1.2.7.5 Access crossroads (8 m) to beachfront (4x130m) with parking bays 208,000 20,800 228,800 Civil Works 228,800 228,800 1.2.8 Section 8 – Otres 2 1.2.8.1 New 8m wide road, 650m 260,000 26,000 286,000 Civil Works 286,000 286,000 1.2.8.2 3.5m footpaths both sides, 650m 195,000 19,500 214,500 Civil Works 214,500 214,500 1.2.8.3 Box culvert road drain both sides inc manholes & outfalls 130,000 13,000 143,000 Civil Works 143,000 143,000 1.2.8.4 Sidewalk improvemen both sides of road where possible, 800m. 40,000 4,000 44,000 Civil Works 44,000 44,000 1.2.8.5 Street lighting, 25m intervals 104,000 10,400 114,400 Civil Works 114,400 114,400 1.2.8.6 Access crossroad (8 m) to beachfront (total 210m) with parking bays 84,000 8,400 92,400 Civil Works 92,400 92,400 1.2.9 General 1.2.9.1 Public toilet blocks x 13 650,000 65,000 715,000 Civil Works 715,000 715,000 1.2.9.2 Supply of 1 mechanical street sweeper 30,000 3,000 33,000 Civil Works 33,000 33,000 1.2.11 Resettlement - base costs 44,259 - 44,259 Resettlement 44,259 44,259 Subtotal 6,686,259 664,200 7,350,459 7,306,200 44,259 7,306,200 - 44,259 1.3: S2 Preah Sihanouk-Koh Rong Passenger Piers and Koh Toch Beach Improvements 1.3.1 Preah Sihanouk Pier 1.3.1.1 New ferry pier, 150m inc 60m "L" at end, 8m wide. Inc beams 450,000 45,000 495,000 Civil Works 495,000 495,000 1.3.1.2 Concrete piling under pier & building, 1080m 810,000 81,000 891,000 Civil Works 891,000 891,000 1.3.1.3 Concrete car parking, 555m2 49,950 4,995 54,945 Civil Works 54,945 54,945 1.3.1.4 Pipe Culvert dim. 1m and backfill, 90m 13,500 1,350 14,850 Civil Works 14,850 14,850 1.3.1.5 Concrete road 8m width in the pier, 50m 133,300 13,330 146,630 Civil Works 146,630 146,630 Concrete road connection 8m width to Russian pier, 2.5 m footpaths & 613,180 61,318 674,498 Civil Works 674,498 674,498 1.3.1.6 car parking, 230m 1.3.1.7 Landscaping 185m2 9,250 925 10,175 Civil Works 10,175 10,175 1.3.1.8 Admin, ticket, tourist info. Office & ASEAN toilet, 187m2 116,875 11,688 128,563 Civil Works 128,563 128,563 1.3.1.9 Store, captain, controle office and waiting area inside, 522m2 326,250 32,625 358,875 Civil Works 358,875 358,875 1.3.1.10 Compound area & waiting area outside, 380m2 57,000 5,700 62,700 Civil Works 62,700 62,700 1.3.1.11 Fence & entrances, 290m 14,500 1,450 15,950 Civil Works 15,950 15,950 Walking path & space around bulding covered by concrete block, 756m2 22,680 249,480 Civil Works 249,480 249,480 1.3.1.12 226,800 1.3.1.13 Lighting, handrail & steps 100,000 10,000 110,000 Civil Works 110,000 110,000 1.3.1.14 Street lighting, 25m intervals 52,000 5,200 57,200 Civil Works 57,200 57,200 1.3.1.15 Project sign board 5,000 500 5,500 Civil Works 5,500 5,500 Amount excl. Tax Amount incl. Category ADB Loan Government Works Goods Resettle- tax tax (incl. tax) (incl tax) Package Package ment (incl. tax) (incl. tax) Civil Works/ Equipment/ No. Activity USD 10% USD Resettlement USD USD USD USD USD 1.3.2 Koh Rong beach improvements 1.3.2.1 Concrete beach path 3m wide, 850m 306,000 30,600 336,600 Civil Works 336,600 336,600 1.3.2.3 Drainpipe & wingwall for creeks (30m) 12,000 1,200 13,200 Civil Works 13,200 13,200 1.3.3 Koh Rong pier 1.3.3.1 New ferry pier, 110m, 8m wide 330,000 33,000 363,000 Civil Works 363,000 363,000 1.3.3.2 Concrete piling under pier, three rows 1125m 562,500 56,250 618,750 Civil Works 618,750 618,750 1.3.3.3 Landscaping 20m2 1,000 100 1,100 Civil Works 1,100 1,100 1.3.3.4 Admin, ticket office, toilet and waiting hall, 156m2 97,500 9,750 107,250 Civil Works 107,250 107,250 1.3.3.5 Store and shaded area, 126.75m2 79,219 7,922 87,141 Civil Works 87,141 87,141 1.3.3.6 Area covered by concrete block, 1695.75m2 508,725 50,873 559,598 Civil Works 559,598 559,598 1.3.3.7 Lighting, handrail & steps 100,000 10,000 110,000 Civil Works 110,000 110,000 1.3.3.8 Project sign boad 5,000 500 5,500 Civil Works 5,500 5,500 1.3.4 Resettlement - base costs - - Resettlement - - Subtotal 4,979,549 497,955 5,477,504 5,477,504 - 5,477,504 - -

Summary Output 1: Amount excl. Tax Amount incl. ADB Loan Government Works Goods Resettle- tax tax (incl. tax) (incl tax) Package Package ment (incl. tax) (incl. tax) USD 10% USD USD USD USD USD USD Kep Province 6,370,000 637,000 7,007,000 7,007,000 - 6,292,000 715,000 - Preah Sihanouk Province 11,665,808 1,162,155 12,827,963 12,783,704 44,259 12,783,704 - 44,259 Total for Output 1 18,035,808 1,799,155 19,834,963 19,790,704 44,259 19,075,704 715,000 44,259 COST ESTIMATE OF OUTPUT 2 (SUMMARY)

Output 2 Activities Amount Tax Amount incl. Implementation % excl. taxes taxes USD 10% USD Year 1 Year 2 Year 3 Year 4 Year 5 Total 2.1 National ASEAN Tourism Standards adaptation 0 0 - 60% 40% 100%

2.2 Establishment of certification bodies and 71,818 7,182 79,000 50% 30% 20% 100% processes 2.3 Assessor training 70,909 7,091 78,000 70% 30% 100% 2.4 ASEAN Tourism Standards promotion 36,364 3,636 40,000 70% 20% 10% 100% 2.5 Implement ASEAN Tourism Standards and the 486,364 48,636 535,000 30% 30% 30% 10% 100% ASEAN Sustainable Tourism Awards Total Output 2 665,455 66,545 732,000 0.0% 38.6% 29.5% 24.6% 7.3% 100.0% COST ESTIMATE OF OUTPUT 2 (DETAILS) ALL AMOUNTS INCLUDING PREVAILING TAXES

Activity Total Services Equipment 2.1 National ASEAN Tourism Standards adaptation 2.1.1 Translation 2.1.1.1 Translate ASEAN Tourism Standards into national language - - 2.1.2 Adaptation 2.1.2.1 Adapt ASEAN Tourism Standards to national context - - 2.1.2.2 Meetings with public and private stakeholders, and ASEAN - - Secretariat and lead-countries as needed 2.1.3 Approval 2.1.3.1 Facilitate official approval of adapted standards - - Subtotal 2.1 - - - 2.2 Establishment of certification bodies and processes 2.2.1 Establishment of national and provincial certification bodies 2.2.1.1 Organize meetings related to formation of national and provincial 10,000 10,000 certification bodies 2.2.1.2 Procure equipment for certification bodies 20,000 20,000 2.2.2 Review, updating and preparation of national guidelines and manuals for certification processes 2.2.2.1 Organize meetings to review existing and develop approaches for 8,000 8,000 new guidelines and manuals and to develop and agree on sustainable financing mechanisms for ongoing assessment and certification 2.2.2.2 Prepare and facilitate approval of guidelines and manuals 5,000 5,000 2.2.2.3 Create paper-based and/or online assessment and reporting tools 5,000 5,000 2.2.2.4 Publish (in print and online) guidelines and manuals 8,000 8,000 2.2.3 Capacity building for certification bodies 2.2.3.1 Design training program on certification processes for national and 5,000 5,000 provincial certification bodies 2.2.3.2 Conduct training on certification processes for national and 18,000 18,000 provincial certification bodies Subtotal 2.2 79,000 59,000 20,000 2.3 Assessor training 2.3.1 Training program design 2.3.1.1 Design comprehensive standard-specific training packages for: (i) 8,000 8,000 national master trainers; (ii) national and provincial trainers; and (iii) national and provincial assessors 2.3.2 Training program implementation 2.3.2.1 Implement standard-specific training programs for national master 18,000 18,000 trainers 2.3.2.2 Implement standard-specific training programs for national and 22,000 22,000 provincial trainers, including master-trainer supervised on-site trial assessments 2.3.2.3 Implement standard-specific training programs for national and 30,000 30,000 provincial assessors, including trainer supervised on-site trial assessments Subtotal 2.3 78,000 78,000 - 2.4 ASEAN Tourism Standards promotion 2.4.1 Preparation of promotional materials 2.4.1.1 Produce print and electronic promotional materials for selected 15,000 15,000 ASEAN Tourism Standards targeting public sector, private sector and communities 2.4.2 Promotional activities 2.4.2.1 Conduct promotional activities targeting national and/or provincial 15,000 15,000 authorities, tourism business associations and other service provider networks 2.4.3 Establishment of an online resource center 2.4.3.1 Establish an ASEAN Tourism Standards website containing general 10,000 10,000 information about the standards, promotional materials, downloadable versions of the adapted standards and detailed, step- by-step instructions about how to apply for certification, in Khmer and English Subtotal 2.4 40,000 40,000 - Activity Total Services Equipment 2.5 Implement ASEAN Tourism Standards and the ASEAN Sustainable Tourism Awards 2.5.1 Preparation of detailed implementation plans 2.5.1.1 Support DMOs and other relevant authorities to jointly prepare 10,000 10,000 implementation plans for ASEAN Tourism standards, identifying for each activity required public and private sector investment (ASEAN Clean City Standard and ASEAN Public Toilet Standard) 2.5.2 Implementation support 2.5.2.1 Support to relevant government departments to implement actions 100,000 100,000 identified in the plans requiring public sector investment, including assessing service providers 2.5.2.2 Equipment for actions identified in the plans requiring public sector 400,000 400,000 investment 2.5.2.3 Support the running of the biennial ASEAN Sustainable Tourism 25,000 25,000 Awards Subtotal 2.5 535,000 135,000 400,000 Total Output 2 732,000 312,000 420,000 COST ESTIMATE OF OUTPUT 3 (SUMMARY)

Output 3 Activities Total Tax Total Amounts incl. taxes (USD) by target Implementation % amount amount destination excl. taxes incl. taxes USD 10% USD Cambodia Coastal Kep Preah Year 1 Year 2 Year 3 Year 4 Year 5 Total Zone Province Sihanouk Province Capacity building for tourism destination management 3.1 Destination management organization institutional 68,182 6,818 75,000 25,000 20,000 15,000 15,000 50% 30% 10% 5% 5% 100% strengthening 3.2 Destination management plan preparation 38,182 3,818 42,000 - 18,000 12,000 12,000 50% 50% 100% 3.3 Policy, Regulation and Master Planning Support 181,818 18,182 200,000 105,000 75,000 10,000 10,000 30% 50% 20% 100% 3.4 Destination Marketing and Promotion Support 190,909 19,091 210,000 15,000 85,000 55,000 55,000 20% 30% 40% 10% 100% 3.5 Heritage Interpretation Support 181,818 18,182 200,000 - - 100,000 100,000 30% 40% 30% 100% 3.6 Tourism-related SME development 90,909 9,091 100,000 - - 50,000 50,000 30% 30% 30% 10% 100% 3.7 Information and education campaigns 36,364 3,636 40,000 - - 20,000 20,000 30% 30% 30% 10% 100% 3.8 Establish and maintain internet-based tourism knowledge 9,091 909 10,000 10,000 - - - 40% 20% 20% 20% 100% repositories Capacity building for infrastructure O&M 3.9 Develop infrastructure O&M plans with sustainable 21,818 2,182 24,000 - - 8,000 16,000 70% 30% 100% finance mechanisms 3.10 Facilitate Public-Private Partnerships for operations and 13,636 1,364 15,000 - - 5,000 10,000 50% 50% 100% maintenance 3.11 Infrastructure O&M training 72,727 7,273 80,000 - - 55,000 25,000 50% 50% 100% Total Output 3 905,455 90,545 996,000 155,000 198,000 330,000 313,000 5.9% 25.3% 29.6% 29.7% 9.6% 100.0% Cost Estimates of Output 3 (details) ALL AMOUNTS INCLUDING PREVAILING TAXES Activity Total Activity Coordinator / Fund Manager Target Destination/Site PCU PIU National Sub- Provincial and Site Kep Preah national Kep Province Preah Sihanouk Province Services Equipment Province Sihanouk Cambodia Coastal Provincial Kep Town Kep Provincial Preah Koh Rong Province Zone Archipelago Sihanouk 3.1 Destination management organization institutional strengthening 3.1.1 Establishment of DMOs 3.1.1.1 Organize meetings with public and private sector stakeholders to 35,000 15,000 10,000 10,000 15,000 10,000 10,000 35,000 form (or reinvigorate existing) destination management organizations (DMOs), establish taskforces and DMO secretariats as needed

3.1.1.2 Procure equipment for DMO secretariats 15,000 5,000 5,000 5,000 5,000 5,000 5,000 15,000 3.1.2 Capacity building of DMO members - 3.1.2.1 Conduct training for DMO members on destination management 25,000 25,000 - - 25,000 25,000 international good practice 3.1.2.2 Facilitate foreign language training for public sector DMO members ------

3.1.2.3 Support public sector DMO members to pursue post-graduate ------degrees in destination management related subjects Subtotal 3.1 75,000 45,000 15,000 15,000 25,000 20,000 15,000 - - 15,000 - - 60,000 15,000 3.2 Destination management plan preparation 3.2.1 Review and updating of existing and prepare new DMPs 3.2.1.1 Through the DMO mechanism and in consultation with other 42,000 18,000 12,000 12,000 18,000 12,000 12,000 42,000 stakeholders, draft new/updated DMPs, including actions plans, identification of roles and responsibilities of public and private sectors and resource requirements and sources, and translate and disseminate DMPs to all members and online Subtotal 3.2 42,000 18,000 12,000 12,000 - 18,000 12,000 - - 12,000 - - 42,000 - 3.3 Policy, Regulation and Master Planning Support 3.3.1 Policy intervention 3.3.1.1 Support DMO policy task force meetings and research to identify 25,000 25,000 - - 25,000 - - 25,000 policy issues affecting the tourism industry and the preparation of proposals to relevant authorities for policy change 3.3.2 Industry standards and regulations 3.3.2.1 Through the DMO mechanisms, and where appropriate in alignment 30,000 30,000 - - 30,000 30,000 and with technical support from international tourism standards and certification systems (e.g. Global Sustainable Tourism Council, Travelife, Earthcheck), identify, draft, review, finalize, translate, print and distribute national tourism industry standards (for specific types of tourism activities and services not covered by the ASEAN Tourism Standards) 3.3.2.2 Through the DMO mechanisms, draft, review, finalize, translate, print 45,000 25,000 10,000 10,000 25,000 10,000 10,000 45,000 and disseminate national and provincial tourism industry regulations for specific tourism activities and services in line with ASEAN and national tourism standards (such as beach safety management (coast guard, life guard) etc.) 3.3.3 Master planning 3.3.3.1 Through the DMO mechanisms, review existing tourism master 100,000 100,000 - - 50,000 50,000 100,000 plans, prepare updated/new, approve, translate, print and disseminate tourism master plans for selected destinations (National Tourism Strategy 2020-2030, Coastal Zone Tourism Development Master Plan and Marketing Strategy and Plan) Subtotal 3.3 200,000 180,000 10,000 10,000 105,000 75,000 10,000 - - 10,000 - - 200,000 - 3.4 Destination Marketing and Promotion Support 3.4.1 Market research 3.4.1.1 Through the DMO structure, conduct destination-specific market 25,000 25,000 - - 25,000 25,000 research and analysis, including collection and analysis of destination-specific tourism statistical data, and disseminate results to DMO members and other industry stakeholders 3.4.2 Branding and promotion Activity Total Activity Coordinator / Fund Manager Target Destination/Site PCU PIU National Sub- Provincial and Site Kep Preah national Kep Province Preah Sihanouk Province Services Equipment Province Sihanouk Cambodia Coastal Provincial Kep Town Kep Provincial Preah Koh Rong Province Zone Archipelago Sihanouk 3.4.2.1 Through the DMO structure, create/update destination banding 15,000 15,000 - - 15,000 15,000 3.4.2.2 Through the DMO structure, conduct promotion campaigns using 70,000 30,000 20,000 20,000 30,000 20,000 20,000 70,000 print and on-line media (websites, social media) and familiarization programs for tour operators and the media 3.4.3 Tourism forums and trade events 3.4.3.1 Facilitate participation of project supported destinations (through the 35,000 15,000 10,000 10,000 15,000 10,000 10,000 35,000 DMO mechanism) in relevant tourism forums and trade events 3.4.3.2 Through the DMO mechanism, organize and host tourism forums and 50,000 - 25,000 25,000 25,000 25,000 50,000 trade events in the target destinations 3.4.4 Training 3.4.4.1 Organize training for MOT and Kep and Preah Sihanouk Province ------DOT staff on the collection, analysis, presentation and dissemination of tourism statistical data for destinations 3.4.4.2 Organize training for MOT and Kep and Preah Sihanouk Province 15,000 15,000 - - 15,000 15,000 DOT marketing staff on the production of print and electronic promotional materials, including on the implementation of ASEAN guidelines for promotional materials, and the use of social media for tourism promotion Subtotal 3.4 210,000 100,000 55,000 55,000 15,000 85,000 55,000 - - 55,000 - - 210,000 - 3.5 Heritage Interpretation Support 3.5.1 Heritage interpretation planning 3.5.1.1 Prepare focused destination cultural and/or natural heritage 30,000 - 15,000 15,000 15,000 15,000 30,000 interpretation plans, including opportunities for public-private partnerships for the delivery of interpretation programs, for Kep town, Kep Archipelago, Preah Sihanouk Town and Koh Rong 3.5.2 Implementation of heritage interpretation programs 3.5.2.1 Implement interpretation activities identified in the heritage 70,000 - 35,000 35,000 20,000 15,000 20,000 15,000 70,000 interpretation plans (e.g. heritage trails, directional signage, interpretation panels, guidebooks, maps, mobile applications), including content development, graphic design and layout, printing, online publication etc. 3.5.2.2 Procure and install equipment for interpretation 100,000 - 50,000 50,000 30,000 20,000 30,000 20,000 100,000 Subtotal 3.5 200,000 - 100,000 100,000 - - 15,000 50,000 35,000 15,000 50,000 35,000 100,000 100,000 3.6 Tourism-related SME development 3.6.1 Support SMEs to implement DMP actions 3.6.1.1 Support DMO-endorsed SME development activities identified in 100,000 - 50,000 50,000 50,000 50,000 100,000 DMPs, including: (i) business planning, management and marketing training; (ii) hospitality services training; (iii) support for product diversification, quality and safety enhancement; and (iv) support for public-private tourism marketing and business networking.

Subtotal 3.6 100,000 - 50,000 50,000 - - 50,000 - - 50,000 - - 100,000 - 3.7 Information and education campaigns 3.7.1 Conduct information and education campaigns (IEC) 3.7.1.1 Support DMOs to develop and implement, with local partners as 40,000 - 20,000 20,000 20,000 20,000 40,000 appropriate, IECs targeting community residents on: (i) HIV/AIDS prevention; (ii) boat safety; (iii) child safe tourism and anti-human trafficking; and (iv) solid waste management at tourist sites. Subtotal 3.7 40,000 - 20,000 20,000 - - 20,000 - - 20,000 - - 40,000 - 3.8 Establish and maintain internet-based tourism knowledge repositories 3.8.1 Establish and maintain internet-based DMO tourism knowledge repositories 3.8.1.1 Through the national DMO structure, establish and regularly update 10,000 10,000 - - 10,000 10,000 website for the publication of information relevant to DMO members and other tourism stakeholders Subtotal 3.8 10,000 10,000 - - 10,000 ------10,000 - Activity Total Activity Coordinator / Fund Manager Target Destination/Site PCU PIU National Sub- Provincial and Site Kep Preah national Kep Province Preah Sihanouk Province Services Equipment Province Sihanouk Cambodia Coastal Provincial Kep Town Kep Provincial Preah Koh Rong Province Zone Archipelago Sihanouk 3.9 Develop infrastructure O&M plans with sustainable finance mechanisms 3.9.1 Preparation of O&M Plans With support from Infrastructure O&M and PPP consultants, and 24,000 - 8,000 16,000 8,000 8,000 8,000 24,000 through consultation with relevant stakeholders, prepare operation 3.9.1.1 and maintenance (O&M) plans for all infrastructure included in Output 1 subprojects Subtotal 3.9 24,000 - 8,000 16,000 - - 8,000 - - - 8,000 8,000 24,000 - 3.10 Facilitate Public-Private Partnerships for operations and maintenance 3.10.1 Public-Private Partnership (PPP) Facilitation Preparation of feasibility studies for private operation of public tourist 6,000 - 2,000 4,000 2,000 2,000 2,000 6,000 3.10.1.1 facilities and ancillary services 3.10.1.2 Procurement of PPP contracts (tendering and contracting) 9,000 - 3,000 6,000 3,000 3,000 3,000 9,000 Subtotal 3.10 15,000 - 5,000 10,000 - - 5,000 - - - 5,000 5,000 15,000 - 3.11 Infrastructure O&M training 3.11.1 Solid waste management (Kep Landfill) Practical training on general managed landfill and sanitary landfill 10,000 - 10,000 - 10,000 10,000 features and lifetime operation, incl. (i) landfill gate control and cell 3.11.1.1 management; (ii) leachate collection & confinement; (iii) medical waste – handling & disposal; (iv) on-site sorting & recycling; (v) gas collection, gas safety & flaring. Site visit to successful sanitary/managed landfill and septage 15,000 - 15,000 - 15,000 15,000 3.11.1.2 treatment facility in Southeast Asia (e.g. Bangkok or Singapore) for key operator staff and head of DPWT 6-monthly refresher and follow up courses for first 3 years of 20,000 - 20,000 - 20,000 20,000 3.11.1.3 operation Support DWPT staff to pursue post-graduate degree in solid waste ------3.11.1.4 management Training in O&M of septage treatment facility, incl. features, lifetime 10,000 - 10,000 - 10,000 10,000 3.11.1.5 operation, daily operator training, and environmental monitoring (incl. water quality). 3.11.2 Koh Rong walking paths Training on regular concrete drain/wingwall cleaning and control of 5,000 - - 5,000 5,000 5,000 3.11.2.1 discharge into drains (Koh Rong) 3.11.3 Port management (Preah Sihanouk, Koh Rong) 20,000 - - 20,000 20,000 20,000 Pier management training, including setting up management structure, and (i) ticketing and book keeping; (ii) maritime safety and 3.11.3.1 first aid training; (iii) daily and weekly cleaning routines; (iv) grounds maintenance; (v) boat safety standards and safety auditing.

Subtotal 3.11 80,000 - 55,000 25,000 - - 55,000 - - 20,000 - 5,000 80,000 - Total Output 3 996,000 353,000 330,000 313,000 155,000 198,000 245,000 50,000 35,000 197,000 63,000 53,000 881,000 115,000

Output 3 components: (i) Capacity building for tourism destination management 837,000 353,000 242,000 242,000 (ii) Capacity building for infrastructure O&M 119,000 - 68,000 51,000 800,909.09 Total Output 3 956,000 353,000 310,000 293,000 COST ESTIMATE OF PROJECT MANAGEMENT ACTIVITIES ALL AMOUNTS INCLUDING PREVAILING TAXES Project Management Activities Amount Financier ADB Loan Government 4.1 Consultancy Services Project Management and Civil Engineering Support (Firm) 1,133,261 1,133,261 - Provisional sums for surveys and CAD support 255,000 255,000 - Capacity Building Support (Individual consultants) 955,508 955,508 - Subtotal (4.1) 2,343,769 2,343,769 - 4.2 Safeguards and Social Dimensions Implementation Environmental management plan Kep Province 55,950 55,950 - Environmental management plan Preah Sihanouk Province 29,250 29,250 - IEE/EMP approval administration 80,000 80,000 - Resettlement Plan management and implementation 15,491 15,491 - Gender Action Plan 75,000 75,000 - Consultation and Participation Plan 40,000 40,000 - Subtotal (4.2) 295,691 295,691 - 4.3 Project planning, monitoring, evaluation, reporting and communication Biannual Project Review and Planning Meetings 52,000 52,000 - Baseline, mid-term and end-of-project performance data collection 30,000 30,000 - Stakeholder Communication Strategy 10,000 10,000 - Financial management and procurement training 4,000 4,000 - Audit services 50,000 - 50,000 Subtotal (4.3) 146,000 96,000 50,000 4.4 PCU, PMU and PIU Support PCU, PMU and PIU Staff cost 479,600 170,400 309,200 PCU, PMU and PIU Operations 870,000 444,000 426,000 PCU, PMU and PIU Equipment 180,000 180,000 - PCU, PMU and PIU perdiems domestic travel 101,500 101,500 - Subtotal (4.4) 1,631,100 895,900 735,200 Total Project Management Activities 4,416,560 3,631,360 785,200 COST ESTIMATE OF PMA CONSULTANTS ALL AMOUNTS INCLUDING PREVAILING TAXES Project Management Activities - Consulting Services

Per Diem Foreign (USD) - Firm 50 Income tax rate 10% Per Diem Foreign (USD) - Individual 50 VAT 10% Per Diem Local (USD) - Firm 50 Per Diem Local (USD) - Individual 50 International Airfare (USD) 2,500 Land International Flights Daily Field Transport No. of Per Time / Total Per Misc. , Vehicle Repro- Person Monthly Int'l Nat'l Flights Airfare Total Flight Diem Home Total Diem Travel Commu- Hire duction Total Months Rate ($) Fees($) Fees($) Total Fees (RT) ($) ($) ($) Time (%) Days ($) Expenses nication (Local of reports A Project Management and Civil Engineering Support (Firm) Civil Engineering 1 International Civil Engineer / Co-Team Leader 524,090 26 18,000 468,000 468,000 5 2,500 12,500 50 100% 780 39,000 1,280 360 2,560 390 2 National Lead Civil Engineer 179,246 34 4,500 153,000 153,000 50 40% 408 20,400 1,632 440 3,264 510 3 National Civil Engineer 1 142,660 32 3,500 112,000 112,000 50 50% 480 24,000 1,920 420 3,840 480 4 National Civil Engineer 2 142,660 32 3,500 112,000 112,000 50 50% 480 24,000 1,920 420 3,840 480 5 Provisional sum for technical surveys for detailed design 170,000 6 Provisional sum for CAD support for detailed engineering design 85,000 Safeguards 7 International Environmental Specialist 86,390 5 15,000 75,000 75,000 2 2,500 5,000 50 70% 105 5,250 305 150 610 75 8 National Environmental Specialist 35,740 8 3,500 28,000 28,000 50 50% 120 6,000 480 180 960 120 9 National Social Safeguards Specialist (Resettlement) 13,465 3 3,500 10,500 10,500 50 50% 45 2,250 180 130 360 45 10 National De-mining/UXO Specialist 9,010 2 3,500 7,000 7,000 50 50% 30 1,500 120 120 240 30 Subtotal A 1,388,261 142 543,000 422,500 965,500 7 17,500 2,448 122,400 7,837 2,220 15,674 2,130 B Capacity Building Support (Individual consultants) ASEAN Tourism Standards and Destination Management 1 International Tourism and Project Management Specialist / Co-Team Leader 422,820 28 13,000 364,000 364,000 6 2,500 15,000 50 100% 840 42,000 1,440 380 2 National Tourism Standards Specialist 49,024 12 3,500 42,000 42,000 50 35% 126 6,300 504 220 3 National Tourism Specialist / Deputy Team Leader 146,872 36 3,500 126,000 126,000 50 35% 378 18,900 1,512 460 Gender and Social Development 4 National Gender Specialist 35,870 10 3,000 30,000 30,000 50 35% 105 5,250 420 200 Financial Management & Procurement 5 International Procurement Specialist 41,543 3 11,000 33,000 33,000 2 2,500 5,000 50 70% 63 3,150 263 130 6 National Financial Management Specialist 107,410 30 3,000 90,000 90,000 50 35% 315 15,750 1,260 400 7 National Procurement Specialist 64,486 18 3,000 54,000 54,000 50 35% 189 9,450 756 280 Infrastructure O&M and PPP 8 International Institutional Development Specialist 41,543 3 11,000 33,000 33,000 2 2,500 5,000 50 70% 63 3,150 263 130 Monitoring and Evaluation 9 National Monitoring and Evaluation Specialist 45,940 12 3,000 36,000 36,000 50 50% 180 9,000 720 220 Subtotal B 955,508 152 430,000 378,000 808,000 10 25,000 2,259 112,950 7,138 2,420 - - Grand Total (A+B+C) 2,343,769 294 973,000 800,500 1,773,500 17 42,500 4,707 235,350 14,975 4,640 15,674 2,130 Project Management and Civil Engineering Support (Firm)

Budget 1 Competitive Component Amount 2 Remuneration key experts 877,727 Excl. of income tax 3 Reimbursable expenses 152,510 Excl. of VAT 4 Subtotal (A) 1,030,237 5 Non-Competitive Component 6 Provisional sums 231,818 Excl. of VAT 7 Contingencies 63,103 5.00% of Subtotal A + Provisional sums (excl. of VAT) 8 Subtotal (B) 294,921 9 Estimated Budget before Tax (C) = (A) + (B) 1,325,158 for Procurement Plan, CSRN, and RFP 10 Indirect Local Tax 11 Income tax experts 87,773 12 VAT 44,743 13 Total Indirect Local Tax (D) 132,516 14 Estimated Contract Budget after Tax (E) = (C) + (D) 1,457,674 15 Budget Contingencies (Uncommitted Balance) (F) 36,442 2.50% 16 Total Budget for the Consulting Services (G) = (E) + (F) 1,494,116

Breakdown Of Reimbursable Expenses, Provisional Sums and Contingency 1 Reimbursable Expenses Amount Excl. of VAT 2 Per diem allowances 111,273 3 International Airfares 15,909 4 Domestic travel 5 Domestic Airfares - 6 Land Transport, Vehicle Hire (Local Transport) 14,249 7 Misc. Travel Expenses 7,125 8 Communication 2,018 9 Reproduction of reports 1,936 10 Subtotal Reimbursable Expenses 152,510 11 Provisional Sums 12 Provisional sum for technical surveys for detailed design 154,545 13 Provisional sum for CAD support for detailed engineering design 77,273 14 Subtotal Provisional Sums 231,818 15 Contingency 63,103 5%

Individual consultants

International Tourism and Project Management Specialist / Co-Team Leader 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 330,909 3 Home 0 4 Subtotal (A) 330,909 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 38,182 7 Air travel 13,636 8 Misc. Travel Expenses (Lump sum) 1,309 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 345 11 Subtotal (B) 53,473 12 Contingency (C.) 19,219 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 403,601 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 33,091 16 VAT (on subtotal B+C) 7,269 17 Total Indirect Local Tax (D) 40,360 18 Estimated Contract Budget after Tax (E) = (C) + (D) 443,961 422,820 19 Budget Contingencies (Uncommitted Balance) (F) 11,099 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 455,060

National Tourism Standards Specialist 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 13,364 3 Home 24,818 4 Subtotal (A) 38,182 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 5,727 7 Air travel 0 8 Misc. Travel Expenses (Lump sum) 458 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 200 11 Subtotal (B) 6,385 12 Contingency (C.) 2,228 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 46,796 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 3,818 16 VAT (on subtotal B+C) 861 17 Total Indirect Local Tax (D) 4,680 18 Estimated Contract Budget after Tax (E) = (C) + (D) 51,475 49,024 19 Budget Contingencies (Uncommitted Balance) (F) 1,287 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 52,762

National Tourism Specialist / Deputy Team Leader 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 40,091 3 Home 74,455 4 Subtotal (A) 114,545 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 17,182 7 Air travel 0 8 Misc. Travel Expenses (Lump sum) 1,375 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 418 11 Subtotal (B) 18,975 12 Contingency (C.) 6,676 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 140,196 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 11,455 16 VAT (on subtotal B+C) 2,565 17 Total Indirect Local Tax (D) 14,020 18 Estimated Contract Budget after Tax (E) = (C) + (D) 154,216 146,872 19 Budget Contingencies (Uncommitted Balance) (F) 3,855 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 158,071

National Gender Specialist 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 9,545 3 Home 17,727 4 Subtotal (A) 27,273 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 4,773 7 Air travel 0 8 Misc. Travel Expenses (Lump sum) 382 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 182 11 Subtotal (B) 5,336 12 Contingency (C.) 1,630 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 34,240 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 2,727 16 VAT (on subtotal B+C) 697 17 Total Indirect Local Tax (D) 3,424 18 Estimated Contract Budget after Tax (E) = (C) + (D) 37,664 35,870 19 Budget Contingencies (Uncommitted Balance) (F) 942 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 38,605

International Procurement Specialist 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 21,000 3 Home 9,000 4 Subtotal (A) 30,000 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 2,864 7 Air travel 4,545 8 Misc. Travel Expenses (Lump sum) 239 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 118 11 Subtotal (B) 7,766 12 Contingency (C.) 1,888 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 39,655 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 3,000 16 VAT (on subtotal B+C) 965 17 Total Indirect Local Tax (D) 3,965 18 Estimated Contract Budget after Tax (E) = (C) + (D) 43,620 41,543 19 Budget Contingencies (Uncommitted Balance) (F) 1,091 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 44,711

National Financial Management Specialist 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 28,636 3 Home 53,182 4 Subtotal (A) 81,818 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 14,318 7 Air travel 0 8 Misc. Travel Expenses (Lump sum) 1,145 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 364 11 Subtotal (B) 15,827 12 Contingency (C.) 4,882 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 102,528 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 8,182 16 VAT (on subtotal B+C) 2,071 17 Total Indirect Local Tax (D) 10,253 18 Estimated Contract Budget after Tax (E) = (C) + (D) 112,781 107,410 19 Budget Contingencies (Uncommitted Balance) (F) 2,820 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 115,600

National Procurement Specialist 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 17,182 3 Home 31,909 4 Subtotal (A) 49,091 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 8,591 7 Air travel 0 8 Misc. Travel Expenses (Lump sum) 687 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 255 11 Subtotal (B) 9,533 12 Contingency (C.) 2,931 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 61,555 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 4,909 16 VAT (on subtotal B+C) 1,246 17 Total Indirect Local Tax (D) 6,155 18 Estimated Contract Budget after Tax (E) = (C) + (D) 67,710 64,486 19 Budget Contingencies (Uncommitted Balance) (F) 1,693 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 69,403

International Institutional Development Specialist 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 21,000 3 Home 9,000 4 Subtotal (A) 30,000 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 2,864 7 Air travel 4,545 8 Misc. Travel Expenses (Lump sum) 239 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 118 11 Subtotal (B) 7,766 12 Contingency (C.) 1,888 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 39,655 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 3,000 16 VAT (on subtotal B+C) 965 17 Total Indirect Local Tax (D) 3,965 18 Estimated Contract Budget after Tax (E) = (C) + (D) 43,620 41,543 19 Budget Contingencies (Uncommitted Balance) (F) 1,091 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 44,711

National Monitoring and Evaluation Specialist 1 Remuneration Amount Exclusive of any prevailing local income taxes 2 Field 16,364 3 Home 16,364 4 Subtotal (A) 32,727 5 Out-of-Pocket Expenses Exclusive of VAT 6 Per diem 8,182 7 Air travel 0 8 Misc. Travel Expenses (Lump sum) 655 9 Land Transport, Vehicle Hire (Local Transport) 0 Provided by EA 10 Communications and Reports 200 11 Subtotal (B) 9,036 12 Contingency (C.) 2,088 5.00% 13 Estimated Budget before Tax (C) = (A) + (B) 43,852 for Procurement Plan and CSRN 14 Indirect Local Tax 15 Income tax (on subtotal A) 3,273 16 VAT (on subtotal B+C) 1,112 17 Total Indirect Local Tax (D) 4,385 18 Estimated Contract Budget after Tax (E) = (C) + (D) 48,237 45,940 19 Budget Contingencies (Uncommitted Balance) (F) 1,206 2.50% 20 Total Budget for the Consulting Services (G) = (E) + (F) 49,443 COST ESTIMATE OF PCU-PMU-PIU ALL AMOUNTS INCLUDING PREVAILING TAXES Category Financier Number Person Rate/ Month Total Staff Daily Per Number of Total Per Recurrent Equipment ADB Loan Government A PCU & PMU Staff of Staff Months ($) Fees Diem ($)Days Diem Total Cost Incl tax Incl tax Incl tax Incl tax PCU 1 Project Director - Government (MOT) 1 60 350 21,000 35 80 2,800 23,800 23,800 2,800 21,000 2 Project Manager / Internal Audit - Government (MOT) 1 60 250 15,000 35 160 5,600 20,600 20,600 5,600 15,000 3 Financing Coordinator - Government (MEF) 1 60 250 15,000 35 80 2,800 17,800 17,800 2,800 15,000 4 Financial Controller - Government (MOT) 1 60 180 10,800 35 80 2,800 13,600 13,600 2,800 10,800 5 Procurement Officer - Government (MOT) 1 60 180 10,800 35 40 1,400 12,200 12,200 1,400 10,800 6 Safeguards Coordinator - Government (MOT) 1 60 180 10,8 00 35 40 1,400 12,200 12,200 1,400 10,800 7 Accountant - Externally hired 1 60 500 30,000 35 40 1,400 31,400 31,400 31,400 8 Office Assistant - Externally hired 1 60 500 30,000 35 40 1400 31,400 31,400 31,400 9 Driver - Exernally hired 1 60 200 12,000 35 300 10,500 22,500 22,500 22,500 Tourism PMU 10 Tourism Specialist - Government (MOT) 1 60 180 10,800 35 200 7,000 17,800 17,800 7,000 10,800 11 ASEAN Tourism Standards Coordinator - Government (MOT) 1 60 180 10,800 35 200 7,000 17,800 17,800 7,000 10,800 12 Tourism Destination Management Training Coordinator - Government (MOT)1 60 180 10,800 35 100 3,500 14,300 14,300 3,500 10,800 13 Tourism Planning Coordinator - Government (MOT) 1 60 180 10,800 35 100 3,500 14,300 14,300 3,500 10,800 14 Tourism Marketing Coordinator - Government (MOT) 1 60 180 10,800 35 100 3,500 14,300 14,300 3,500 10,800 Infrastructure PMU 15 Civil Works Supervisor - Government (MPWT) 1 60 250 15,000 35 80 2,800 17,800 17,800 2,800 15,000 16 Civil Engineer (piers) - Government (MPWT) 1 60 180 10,800 35 100 3,500 14,300 14,300 3,500 10,800 17 Civil Engineer (solid waste management) - Government (MPWT) 1 60 180 10,800 35 100 3,500 14,300 14,300 3,500 10,800 18 Civil Engineer (roads) - Government (MPWT) 1 60 180 10 ,800 35 100 3,500 14,300 14,300 3,500 10,800 19 Surveyor - Government (MPWT) 1 60 180 10,800 35 100 3,500 14,300 14,300 3,500 10,800 Total PCU & PMU Staff 19 1,140 267,600 2,040 71,400 339,000 339,000 0 143,400 195,600 Category Financier Number Person Rate/ Month Total Staff Daily Per Number of Total Per Recurrent Equipment ADB Loan Government B PIU Staff of Staff Months ($) Fees Diem ($) Days Diem Total Cost Incl tax Incl tax Incl tax Incl tax 1 PIU Director - Government 2 60 120 14,400 35 40 1,400 15,800 15,800 1,400 14,400 2 PIU Manager - Government 2 60 120 14,400 35 60 2,100 16,500 16,500 2,100 14,400 3 Finance Officer - Government 2 60 120 14,400 35 60 2,100 16,500 16,500 2,100 14,400 4 Accountant - Externally hired 2 60 350 42,000 35 60 2,100 44,100 44,100 44,100 5 Secretary - Externally hired 2 60 350 42,000 35 60 2,100 44,100 44,100 44,100 6 Driver - Externally hired 2 60 120 14,400 35 100 3,500 17,900 17,900 17,900 Tourism Team 6 Tourism Coordinator - Government 2 60 80 9,600 35 60 2,100 11,700 11,700 2,100 9,600 7 Training Specialist - Government 2 60 80 9,600 35 60 2,100 11,700 11,700 2,100 9,600 8 Tourism Planner - Government 2 60 80 9,600 35 60 2,100 11,700 11,700 2,100 9,600 9 Marketing and Product Development Specialist - Government 2 60 80 9,600 35 60 2,100 11,700 11,700 2,100 9,600 Infrastructure team 10 Civil Works Coordinator - Government (DPWT) 2 60 80 9,600 35 60 2,100 11700 11,700 2,100 9600 11 Engineer - Government (DPWT) 2 60 80 9,600 35 60 2,100 11700 11,700 2,100 9600 12 Surveyor - Government (DPWT) 2 20 80 3,200 35 60 2,100 5300 5,300 2,100 3200 13 Safeguards Specialist - Government 2 60 80 9,600 35 60 2,100 11700 11,700 2,100 9600 Total PIU Staff 28 800 212,000 860 30,100 242,100 242,100 - 128,500 113,600

Category Financier Recurrent Equipment ADB Loan Government

Unit Rate or C PCU & PMU Support Qty Months Month ($) Total Incl tax Incl tax Incl tax Incl tax PCU & Tourism PMU Running Costs (MOT) PCU & T-PMU Office Rental 1 60 2,300 138,000 138,000 138,000 PCU & T-PMU Communication 1 60 500 30,000 30,000 30,000 PCU & T-PMU Utilities 1 60 500 30,000 30,000 30,000 PCU & T-PMU Office cleaning and maintenance 1 60 400 24,000 24,000 24,000 PCU & T-PMU International Travel (airfares and perdiem) LS 60,000 60,000 60,000 60,000 PCU & T-PMU Project Vehicle Operating Cost (fuel, maintenance) 1 60 800 48,000 48,000 48,000 PCU & T-PMU Office Supplies LS 60 500 30,000 30,000 30,000 Infrastructure PMU Running Costs (MPWT) I-PMU Office Rental 1 60 1,200 72,000 72,000 72,000 I-PMU Communication 1 60 300 18,000 18,000 18,000 I-PMU Utilities 1 60 300 18,000 18,000 18,000 I-PMU Office cleaning and maintenance 1 60 200 12,000 12,000 12,000 I-PMU Office Supplies LS 60 300 18,000 18,000 18,000 PCU & PMU Equipment (MOT & MPWT) PCU & PMU Project Vehicles (pickup) 2 30,000 60,000 60,000 60,000 PCU Office Equipment (furniture, IT equipment) LS 10,000 10,000 10,000 10,000 PMU Office Equipment (furniture, IT equipment) LS 10,000 10,000 10,000 10,000 Total PCU & PMU Support 578,000 498,000 80,000 320,000 258,000

Category Financier Recurrent Equipment ADB Loan (per Government diems) (fees)

Unit Rate or D PIU Support Qty Months Month ($) Total Incl tax Incl tax Incl tax Incl tax PIU Running Costs PIU Office Rental 2 60 1,000 120,000 120,000 120,000 PIU Communication 2 60 300 36,000 36,000 36,000 PIU Utilities 2 60 400 48,000 48,000 48,000 PIU Office cleaning and maintenance 2 60 400 48,000 48,000 48,000 PIU Project Vehicle Operating Cost (fuel, maintenance) 2 60 500 60,000 60,000 60,000 PIU Other transportation costs 2 60 200 24,000 24,000 24,000 PIU Office Supplies 2 60 300 36,000 36,000 36,000 PIU Equipment PIU Project Vehicle (pickup) 2 30,000 60,000 60,000 60,000 PIU Office Equipment (furniture, IT equipment) 2 20,000 40,000 40,000 40,000 Total PIU Support 472,000 372,000 100,000 304,000 168,000

Grand Total (A+B+C+D) 1,631,100 1,451,100 180,000 895,900 735,200 CONTRACT AWARDS AND DISBURSEMENT BY QUARTER

Disbursements ($million) Contract awards ($million) Expenditure Year Q1 Q2 Q3 Q4 Annual Cumulative Q1 Q2 Q3 Q4 Annual Cumulative Q1 Q2 Q3 Q4 Total Cumulative 2018 0.00 0.00 0.00 0.60 0.60 0.60 0.00 0.00 0.00 0.18 0.18 0.18 0.00 0.00 0.00 0.18 0.18 0.18 2019 0.00 0.60 0.00 0.50 1.10 1.70 0.81 1.61 7.56 0.35 10.33 10.51 0.37 0.28 0.29 0.52 1.45 1.63 2020 2.10 2.60 2.10 2.60 9.40 11.10 0.17 8.94 0.17 6.86 16.14 26.65 2.18 2.59 2.18 2.66 9.60 11.24 2021 3.80 2.50 2.00 4.20 12.50 23.60 1.02 0.17 0.17 0.17 1.54 28.18 3.79 2.50 1.97 4.33 12.59 23.83 2022 2.10 0.50 0.50 2.10 5.20 28.80 0.18 0.18 0.18 0.18 0.71 28.89 2.14 0.55 0.55 2.14 5.36 29.19 2023 0.20 0.20 0.20 0.20 0.80 29.60 0.10 0.10 0.10 0.10 0.39 29.28 0.20 0.20 0.20 0.20 0.81 30.00 2024 0.30 0.10 0.00 0.00 0.40 30.00 0.00 0.00 0.00 0.00 0.00 29.28 0.00 0.00 0.00 0.00 0.00 30.00 Total Disbursements 30.00 Total Contract Awards 29.28 Total Expenditure 30.00

35.00

30.00

25.00

20.00

15.00

Amount ($Amount Million) 10.00

5.00

0.00 2018 2019 2020 2021 2022 2023 2024 Annual Disbursement 0.60 1.10 9.40 12.50 5.20 0.80 0.40 Cumulative Disbursement 0.60 1.70 11.10 23.60 28.80 29.60 30.00 Annual Contracting 0.18 10.33 16.14 1.54 0.71 0.39 0.00 Cumulative Contracting 0.18 10.51 26.65 28.18 28.89 29.28 29.28

Disbursements ($million) Contract awards ($million) Year Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total 2018 0.00 0.00 0.00 0.60 0.60 0.00 0.00 0.00 0.18 0.18 2019 0.00 0.60 0.00 0.50 1.10 0.81 1.61 7.56 0.35 10.33 2020 2.10 2.60 2.10 2.60 9.40 0.17 8.94 0.17 6.86 16.14 2021 3.80 2.50 2.00 4.20 12.50 1.02 0.17 0.17 0.17 1.54 2022 2.10 0.50 0.50 2.10 5.20 0.18 0.18 0.18 0.18 0.71 2023 0.20 0.20 0.20 0.20 0.80 0.10 0.10 0.10 0.10 0.39 2024 0.30 0.10 0.00 0.00 0.40 0.00 0.00 0.00 0.00 0.00 Total Disbursements 30.00 Total Contract Awards 29.28 Financing Charges Calculations

2018 2019 2020 2021 2022 2023 Total Asian Development Bank 0.16 1.34 9.51 12.59 5.11 0.56 - 29.26 30.06 Government 0.03 0.17 0.18 0.16 0.16 0.12 - 0.8 Total 0.19 1.50 9.70 12.75 5.27 0.68 - 30.1 0.18 1.39 8.95 11.77 4.87 0.58 - 27.7 0.18 1.39 8.95 11.77 4.87 0.58 - Financier: ADB Currency: US$ Unit: Thousands

Contractual Maturity Grace period Finance from Financing terms Interest rate Spread premium (years) loan (Y/N) Interest during implementation 1.00% 0.00% 0.00% 0 Y Commitment fee 0.00% N Front end fee 0.00% N

Financing charges calculations Project Implementation Period 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0.00 0.16 1.49 11.01 23.59 28.71 29.26 - Drawdown 0.16 1.34 9.51 12.59 5.11 0.56 29.26 - Closing balance 0.16 1.49 11.01 23.59 28.71 29.26 - Average balance 0.08 0.83 6.25 17.30 26.15 28.98 Interest rate during implementation 0.01 0.01 0.01 0.01 0.01 0.01 Interest During Implementation 0.00 0.01 0.06 0.17 0.26 0.29 0.80 Commitment charge 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Front end fees 0.00 0.00 Total Financing Charges During Implementation 0.00 0.01 0.06 0.17 0.26 0.29 0.80

Value using CPP exchange rates (VND millions) Total Financing Charges During Implementation 0.00 0.03 0.26 0.73 1.12 1.27 3.42 Interest During Implementation 0.00 0.03 0.26 0.73 1.12 1.27 3.42 Commitment charge 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Front end fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Value using constant exchange rates (VND millions) Total Financing Charges During Implementation 0.00 0.03 0.25 0.70 1.06 1.17 3.22 Interest During Implementation 0.00 0.03 0.25 0.70 1.06 1.17 3.22 Commitment charge 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Front end fees 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Financier: Central Government Currency: US$ Unit: Thousands

Contractual Maturity Grace period Finance from Financing terms Interest rate Spread premium (years) loan (Y/N) Interest during implementation 0.00% 0.00% 0.00% 0 N Commitment fee 0.00% N Front end fee 0.00% N Financing charges calculations Project Implementation Period 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 0 0 0 0 0 0 23,260 - Drawdown 0 0 0 0 0 0 0 0 - Closing balance 0 0 0 0 0 0 0 - Average balance 0 0 0 0 0 0 0 Interest rate during implementation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Interest During Implementation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Commitment charge 0 0 0 0 0 0 0 0 Front end fees 0 0 Total Financing Charges During Implementation 0 0 0 0 0 0 0 0

Value using CPP exchange rates (MK millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitment charge 0 0 0 0 0 0 0 0 Front end fees 0 0

Value using constant exchange rates (MK millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitment charge 0 0 0 0 0 0 0 0 Front end fees 0 0

Summary of Financing Charges by Financier ( millions) Financier 2018 2019 2020 2021 2022 2023 Total ADB 0 0 0 1 1 1 0 3 Central Government 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Central Govt 0 0 0 0 0 0 0 0 Total 0 0 0 1 1 1 0 3 1

Summary of Financing Charges by Financier ($ million) Financier 2018 2019 2020 2021 2022 2023 Total ADB 0.0 0.0 0.1 0.2 0.3 0.3 0.0 0.8 Central Government 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Central Govt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 0.0 0.0 0.1 0.2 0.3 0.3 0.0 0.8

10.6 114.4 327.0 542.5 685.9 740.2 749.1 3169.5 39.8 46.7 126.3 230.6 314.6 341.7 347.6 1447.4 50.4 161.1 453.3 773.1 1000.5 1081.9 1096.6 4616.8 Financing Charges Calculations

2018 2019 2020 2021 2022 2023 Total

Output 1 Asian Development Bank - - 6.2 8.7 3.1 - - 18.0 Output 2 Asian Development Bank - 0.2 0.3 0.1 0.1 0.0 - 0.7 Output 3 Asian Development Bank - 0.1 0.2 0.2 0.2 0.1 - 0.9 Output 4 Asian Development Bank 0.1 0.8 0.8 0.8 0.5 0.3 - 3.3 Output 5 Asian Development Bank ------Total 0.1 1.1 7.5 9.7 4.0 0.4 - 22.89 3.33

Financier: ADB Currency: US$ Unit: Thousands

Contractual Maturity Grace period Finance from Financing terms Interest rate Spread premium (years) loan (Y/N) Interest during implementation 1.00% 0.00% 0.00% 0 Y Commitment fee 0.00% N Front end fee 0.00% N

Financing charges calculations Project Implementation Period (Component 1) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0.00 0.00 0.00 6.18 14.85 17.99 17.99 - Drawdown 0.00 0.00 6.18 8.67 3.14 0.00 17.99 - Closing balance 0.00 0.00 6.18 14.85 17.99 17.99 - Average balance 0.00 0.00 3.09 10.52 16.42 17.99 Interest rate during implementation 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Interest During Implementation 0.00 0.00 0.03 0.11 0.16 0.18 0 Commitement charge 0 0 0 0 0 0 0 Front end fees 0 0 Total Financing Charges During Implementation 0.00 0.00 0.03 0.11 0.16 0.18 0 IDI for Component 1

Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.1 0.5 0.7 0.8 2.1 Interest During Implementation 0.0 0.0 0.1 0.5 0.7 0.8 2.1 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.1 0.4 0.7 0.7 1.9 Interest During Implementation 0.0 0.0 0.1 0.4 0.7 0.7 1.9 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Project Implementation Period (Component 2) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 0 0 1 1 1 - Drawdown 0 0 0 0 0 0 1 - Closing balance 0 0 0 1 1 1 - Average balance 0 0 0 1 1 1 Interest rate during implementation 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Interest During Implementation 0.00 0.00 0.00 0.01 0.01 0.01 0 Commitement charge 0 0 0 0 0 0 0 Front end fees 0 0 Total Financing Charges During Implementation 0.00 0.00 0.00 0.01 0.01 0.01 0 IDI by component 2 Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Interest During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Interest During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Project Implementation Period (Component 3) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 0 0 1 1 1 - Drawdown 0 0 0 0 0 0 1 - Closing balance 0 0 0 1 1 1 - Average balance 0 0 0 0 1 1 Interest rate during implementation 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Interest During Implementation 0.00 0.00 0.00 0.00 0.01 0.01 0 Commitement charge 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 Total Financing Charges During Implementation 0.00 0.00 0.00 0.00 0.01 0.01 0 IDI by component 3

Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Interest During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Interest During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Project Implementation Period (Component 4) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 1 2 2 3 3 - Drawdown 0 1 1 1 1 0 3 - Closing balance 0 1 2 2 3 3 - Average balance 0 1 1 2 3 3 Interest rate during implementation 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Interest During Implementation 0.00 0.01 0.01 0.02 0.03 0.03 0 Commitement charge 0 0 0 0 0 0 0 Front end fees 0 0 Total Financing Charges During Implementation 0.00 0.01 0.01 0.02 0.03 0.03 0 IDI by component 4

Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.1 0.1 0.1 0.1 0.4 Interest During Implementation 0.0 0.0 0.1 0.1 0.1 0.1 0.4 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.1 0.1 0.1 0.1 0.4 Interest During Implementation 0.0 0.0 0.1 0.1 0.1 0.1 0.4 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Project Implementation Period (Component 5) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 0 0 0 0 0 - Drawdown 0 0 0 0 0 0 0 - Closing balance 0 0 0 0 0 0 - Average balance 0 0 0 0 0 0 Interest rate during implementation 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Interest During Implementation 0.00 0.00 0.00 0.00 0.00 0.00 0 Commitement charge 0 0 0 0 0 0 0 Front end fees 0 0 Total Financing Charges During Implementation 0 0 0 0 0 0 0 IDI by component 5

Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Interest During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Interest During Implementation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Commitement charge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Front end fees 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Summary of Financing Charges by Component (VND millions) Financier 2018 2019 2020 2021 2022 2023 Total Output 1 Asian Development Bank 0.0 0.0 0.1 0.5 0.7 0.8 2.1 Output 2 Asian Development Bank 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Output 3 Asian Development Bank 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Output 4 Asian Development Bank 0.0 0.0 0.1 0.1 0.1 0.1 0.4 Output 5 Asian Development Bank 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 0.0 0.0 0.2 0.6 0.9 1.0 2.8

Summary of Financing Charges by Component (foreign currency 000s) Financier 2018 2019 2020 2021 2022 2023 Total Output 1 Asian Development Bank 0.0 0.0 0.0 0.1 0.2 0.2 0.5 Output 2 Asian Development Bank 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Output 3 Asian Development Bank 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Output 4 Asian Development Bank 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Output 5 Asian Development Bank 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 0.0 0.0 0.1 0.1 0.2 0.2 0.6

2018 2019 2020 2021 2022 2023 Total FE Fee

Component 1 Central Government (Taxes & duties) ------0 Component 2 Central Government (Taxes & duties) ------0 Component 3 Central Government (Taxes & duties) ------0 Component 4 Central Government (Taxes & duties) ------0 Component 5 Central Government (Taxes & duties) Total ------0 Financier: Central Government Currency: US$ Unit: Thousands Contractual Maturity Grace period Finance from Financing terms Interest rate Spread premium (years) loan (Y/N) Interest during implementation 0.00% 0.00% 0.00% 0 N Commitment fee 0.00% N Front end fee 0.00% N

Financing charges calculations Project Implementation Period (Component 1) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 0 0 0 0 0 0.00 7,340.00 - Drawdown 0 0 0 0 0 0 0 0 - Closing balance 0 0 0 0 0 0 0 - Average balance 0 0 0 0 0 0 0 Interest rate during implementation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Interest During Implementation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 IDI for Component 1

Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 0

Project Implementation Period (Component 2) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 0 0 0 0 0 0 13,940 - Drawdown 0 0 0 0 0 0 0 0 - Closing balance 0 0 0 0 0 0 0 - Average balance 0 0 0 0 0 0 0 Interest rate during implementation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Interest During Implementation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 IDI by component 2

Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 0 Project Implementation Period (Component 3) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 0 0 0 0 0 0 1,970 - Drawdown 0 0 0 0 0 0 0 0 - Closing balance 0 0 0 0 0 0 0 - Average balance 0 0 0 0 0 0 0 Interest rate during implementation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Interest During Implementation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 IDI by component 3

Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 0

Project Implementation Period (Component 4) 2018 2019 2020 2021 2022 2023 Total Loan balance - Opening balance 0 0 0 0 0 0 0 0 0 - Drawdown 0 0 0 0 0 0 0 0 - Closing balance 0 0 0 0 0 0 0 - Average balance 0 0 0 0 0 0 0 Interest rate during implementation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Interest During Implementation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 IDI by component 4

Value using CPP exchange rates (CNY millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 0

Value using constant exchange rates (CNY millions) Total Financing Charges During Implementation 0 0 0 0 0 0 0 0 Interest During Implementation 0 0 0 0 0 0 0 0 Commitement charge 0 0 0 0 0 0 0 0 Front end fees 0 0 0 0 0 0 0 0

Total drawdown ($millions) -

Summary of Financing Charges by Component ( millions) Financier 2018 2019 2020 2021 2022 2023 Total Component 1 Central Government (Taxes & duties) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 2 Central Government (Taxes & duties) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 3 Central Government (Taxes & duties) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 4 Central Government (Taxes & duties) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 5 Central Government (Taxes & duties) 0.0 Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Summary of Financing Charges by Component (foreign currency 000s) Financier 2018 2019 2020 2021 2022 2023 Total Component 1 Central Government (Taxes & duties) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 2 Central Government (Taxes & duties) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 3 Central Government (Taxes & duties) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 4 Central Government (Taxes & duties) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Summary of Total Financing Charges by Component (foreign currency 000s) 2018 2019 2020 2021 2022 2023 Total Component 1 0.0 0.0 0.0 0.1 0.2 0.2 0.5 Component 2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Component 4 0.0 0.0 0.0 0.0 0.0 0.0 0.1 Component 5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 0.0 0.0 0.1 0.1 0.2 0.2 0.6 III. PROJECTED BENEFICIARIES AND TOURISM FORECASTS

1. Calculation of project beneficiaries Subproject Transport Notes Water Notes Provincial, Beneficiaries Wastewater Land improved Households district, and from road treatment through with reduced rural roads projects capacity added irrigation, flood risk built or or improved drainage, upgraded and/or flood management km number m3/day hectares number Cambodia 9,000 residents will benefit from better solid waste K1. Kep Solid Waste Management collection and management, but not directly from Improvements 3.0 0 the landfill access road 13.7 0.00 0 5,000m3/year (estimate y Andrew) includes 1.2 km of landscaping and lighting along S1. Sihanoukville Seaside Access and Main Ochheuteal Beach and 0.2km footpath over Environmental Improvement 7.4 12,878 headland 0.0 0.00 0 0.5 hectares around creeks that will get better drainage; around 30 people directly benefitting - S2. Sihanoukville–Koh Rong Passenger Piers could potentially use the Koh Toch population, but Improvements 0.0 0 0.0 0.50 30 I don't have the data Subtotal Cambodia 10.4 12,878 13.7 0.50 30

2. Tourism Forecasts and Projections Aggregate annual visitor expenditure in project areas 2012-2016 ($million) Outcome Targets

Baseline Without Project With Project Incremental expenditure CAGR 2012-2016 2012 2013 2014 2015 2016 (%) 2025 2025 2025 Cambodia Preah Sihanouk Province 41.2 50.2 63.8 71.7 96.0 23.5 163.5 175.6 12.1 7.4% Kep Province 62.6 58.3 63.6 88.6 90.3 9.6 141.6 151.8 10.1 7.1% Lao PDR Champasak Province 35.5 44.7 49.9 65.7 64.1 15.9 96.5 99.8 3.3 3.5% Luang Prabang Province 126.7 146.0 163.5 189.8 200.4 12.2 318.9 335.2 16.3 5.1% Vientiane Province 69.0 75.0 96.3 132.2 99.4 9.5 148.5 154.0 5.5 3.7% Subtotal CAM+LAO 335.0 374.3 437.1 548.2 550.2 13.2 869.1 916.4 47.3 5.4% Viet Nam Hoa Binh Province 6.9 12.1 12.0 22.1 19.9 30.6 31.7 33.8 2.1 6.5% Nghe An Province 139.8 161.2 191.8 279.5 193.4 8.4 289.4 310.2 20.7 7.2% Quang Binh Province 43.0 56.5 104.8 109.6 78.8 16.3 129.7 142.7 13.0 10.0% Quang Tri Province 25.4 30.1 34.4 39.2 27.4 1.8 39.3 42.5 3.2 8.2% Thua Thien Hue Province 106.8 116.8 127.7 139.5 145.6 8.1 216.0 229.4 13.4 6.2% Subtotal VIE 321.9 376.7 470.7 589.9 465.1 9.6 706.0 758.5 52.5 7.4% Total CLV 656.9 750.9 907.7 1,138.1 1,015.3 11.5 1,575.1 1,674.9 99.8 6.3% Source: National and provincial tourism offices TOURISM BASELINE DATA BY PROVINCE CAMBODIA Preah Sihanouk Province Baseline Conditions 2012-2016 Growth CAGR 2016/2015 2012-2016 Indicator 2012 2013 2014 2015 2016 (%) (%) Tourist arrivals - Total 870,464 1,033,929 1,327,748 1,518,874 2,079,570 36.9 24.3 International tourists 212,643 302,325 358,639 362,061 404,939 11.8 17.5 Domestic tourists 657,821 731,604 969,109 1,156,813 1,674,631 44.8 26.3 Tourism receipts - Total ($mln) 41.2 50.2 63.8 71.7 96.0 33.8 23.5 International tourists ($mln) 14.0 20.0 23.7 23.9 26.7 11.8 17.5 Domestic tourists ($mln) 27.2 30.3 40.1 47.9 69.3 44.8 26.3 Length of Stay International tourists 1.8 1.8 1.8 1.8 1.8 0.0 0.0 Domestic tourists 1.6 1.6 1.6 1.6 1.6 0.0 0.0 Average daily expenditure International tourists ($) 40.0 40.0 40.0 40.0 40.0 0.0 0.0 Domestic tourists ($) 27.6 27.6 27.6 27.6 27.6 0.0 0.0 Average receipts per tourist International tourists ($) 66.0 66.0 66.0 66.0 66.0 0.0 0.0 Domestic tourists ($) 41.4 41.4 41.4 41.4 41.4 0.0 0.0 Source: Preah Sihanouk Provincial Tourism Office

Kep Province Baseline Conditions 2012-2016 Growth CAGR 2016/2015 2012-2016 Indicator 2012 2013 2014 2015 2016 (%) (%) Tourist arrivals - Total 757,497 683,536 758,206 1,079,493 1,097,168 1.6 9.7 International tourists 38,643 47,040 45,061 51,008 53,733 5.3 8.6 Domestic tourists 718,854 636,496 713,145 1,028,485 1,043,435 1.5 9.8 Tourism receipts - Total ($mln) 62.6 58.3 63.6 88.6 90.3 2.0 9.6 International tourists ($mln) 8.7 10.6 10.1 11.5 12.1 5.3 8.6 Domestic tourists ($mln) 53.9 47.7 53.5 77.1 78.3 1.5 9.8 Length of Stay International tourists 3.0 3.0 3.0 3.0 3.0 0.0 0.0 Domestic tourists 1.5 1.5 1.5 1.5 1.5 0.0 0.0 Average daily expenditure International tourists ($) 75.0 75.0 75.0 75.0 75.0 0.0 0.0 Domestic tourists ($) 50.0 50.0 50.0 50.0 50.0 0.0 0.0 Average receipts per tourist International tourists ($) 225.0 225.0 225.0 225.0 225.0 0.0 0.0 Domestic tourists ($) 75.0 75.0 75.0 75.0 75.0 0.0 0.0 Source: Kep Provincial Tourism Office TOURISM FORECASTS

CAMBODIA

Kep Province Tourism Forecasts 2016-2046 Baseline Without Project With Project Incremental With-Project benefits Indicator 2016 2026 2036 2046 2026 2036 2046 2026 2036 2046 Tourist arrivals - Total 1,097,168 1,796,064 2,523,307 3,063,296 1,816,806 2,619,804 3,211,477 20,741 1.2% 96,497 3.8% 148,181 4.8% International tourists 53,733 87,386 122,703 148,880 88,395 127,396 156,082 1,009 1.2% 4,693 3.8% 7,202 4.8% Domestic tourists 1,043,435 1,708,678 2,400,604 2,914,416 1,728,411 2,492,408 3,055,394 19,732 1.2% 91,805 3.8% 140,978 4.8% Tourism receipts - Total ($mln) 90.3 147.8 207.7 252.1 158.8 229.0 280.7 11.0 7.4% 21.4 10.3% 28.6 11.4% International tourists ($mln) 12.1 19.7 27.6 33.5 20.6 29.6 36.3 0.9 4.5% 2.0 7.3% 2.8 8.3% Domestic tourists ($mln) 78.3 128.2 180.0 218.6 138.3 199.4 244.4 10.1 7.9% 19.3 10.7% 25.9 11.8% Average receipts per tourist International tourists ($) 225.0 225.0 225.0 225.0 232.5 232.5 232.5 7.5 3.3% 7.5 3.3% 7.5 3.3% Domestic tourists ($) 75.0 75.0 75.0 75.0 80.0 80.0 80.0 5.0 6.7% 5.0 6.7% 5.0 6.7% Source: Preah Sihanouk Provincial Tourism Office; Asian Development Bank Estimates.

Preah Sihanouk Province Tourism Forecasts 2016-2046 Baseline Without Project With Project Incremental With-Project benefits Indicator 2016 2026 2036 2046 2026 2036 2046 20262036 2046 Tourist arrivals - Total 2,079,570 3,714,007 5,255,689 6,427,391 3,756,867 5,456,532 6,738,073 42,859 1.2% 200,843 3.8% 310,682 4.8% International tourists 404,939 693,735 978,299 1,192,187 701,744 1,015,697 1,249,834 8,008 1.2% 37,398 3.8% 57,647 4.8% Domestic tourists 1,674,631 3,020,272 4,277,390 5,235,204 3,055,123 4,440,835 5,488,239 34,851 1.2% 163,445 3.8% 253,035 4.8% Tourism receipts - Total ($mln) 96.0 170.7 241.5 295.2 183.9 267.0 329.7 13.2 7.7% 25.5 10.6% 34.4 11.7% International tourists ($mln) 26.7 45.8 64.6 78.7 49.1 71.1 87.5 3.3 7.3% 6.5 10.1% 8.8 11.2% Domestic tourists ($mln) 69.3 124.9 176.9 216.6 134.8 195.9 242.2 9.9 7.9% 19.0 10.7% 25.6 11.8% Average receipts per tourist International tourists ($) 66.0 66.0 66.0 66.0 70.0 70.0 70.0 4.0 6.1% 4.0 6.1% 4.0 6.1% Domestic tourists ($) 41.4 41.4 41.4 41.4 44.1 44.1 44.1 2.8 6.7% 2.8 6.7% 2.8 6.7% Source: Preah Sihanouk Provincial Tourism Office; Asian Development Bank Estimates. Baseline Without Project With Project Incremental With-Project benefits Indicator 2016 2026 2036 2046 2026 2036 2046 2026 2036 2046 S1 Sihanoukville Seaside Access and Environmental Improvements Ocheteaul Beach and Otress Beach Tourist arrivals 1,663,656 2,971,206 4,204,551 5,141,913 3,005,493 4,365,225 5,390,458 34,288 1.2% 160,674 3.8% 248,546 4.8% International 323,951 554,988 782,639 953,749 561,395 812,558 999,867 6,407 1.2% 29,919 3.8% 46,118 4.8% Domestic 1,339,705 2,416,218 3,421,912 4,188,163 2,444,099 3,552,668 4,390,591 27,881 1.2% 130,756 3.8% 202,428 4.8% Tourism receipts ($mln) 76.8 136.6 193.2 236.2 147.1 213.6 263.7 10.6 7.7% 20.4 10.6% 27.5 11.7% S2 Sihanoukville-Koh Rong Passenger Piers and Koh Toch Beach Improvements Sihanoukville - Koh Rong ferry service Ferry-round trips 7,397 12,862 18,161 22,160 13,060 18,999 23,409 198 1.5% 839 4.6% 1,249 5.6% Passenger-round trips 298,601 519,210 733,107 894,533 527,212 766,963 944,970 8,002 1.5% 33,856 4.6% 50,438 5.6% International 213,923 366,490 516,820 629,814 372,139 540,691 665,330 5,649 1.5% 23,871 4.6% 35,516 5.6% Domestic 84,678 152,721 216,287 264,719 155,074 226,272 279,640 2,353 1.5% 9,985 4.6% 14,921 5.6% Fare receipts ($mln) 6.0 10.4 14.7 17.9 10.5 15.3 18.9 0.2 1.5% 0.7 4.6% 1.0 5.6% Sihanoukville ferry pier operation Total receipts ($) 159,911 224,782 272,954 159,911 224,782 272,954 Passenger departure tax ($) 131,803 191,741 236,243 131,803 191,741 236,243 Berthing fees ($) 6,530 9,500 11,704 6,530 9,500 11,704 Parking fees ($) 4,292 6,253 7,717 4,292 6,253 7,717 Rental of stalls and kiosks ($) 17,280 17,280 17,280 17,280 17,280 17,280 Koh Rong ferry pier operation Total receipts ($) 149,853 212,760 259,467 149,853 212,760 259,467 Passenger departure tax ($) 131,803 191,741 236,243 131,803 191,741 236,243 Berthing fees ($) 6,530 9,500 11,704 6,530 9,500 11,704 Rental of stalls and kiosks ($) 11,520 11,520 11,520 11,520 11,520 11,520 Koh Rong Island Visitor arrivals 298,601 519,210 733,107 894,533 527,212 766,963 944,970 8,002 1.5% 33,856 4.6% 50,438 5.6% International 213,923 366,490 516,820 629,814 372,139 540,691 665,330 5,649 1.5% 23,871 4.6% 35,516 5.6% Domestic 84,678 152,721 216,287 264,719 155,074 226,272 279,640 2,353 1.5% 9,985 4.6% 14,921 5.6% Tourism receipts ($mln) 21.2 36.7 51.8 63.1 38.6 56.1 69.1 1.9 5.2% 4.3 8.4% 6.0 9.4% Source: Preah Sihanouk Provincial Tourism Office; Asian Development Bank Estimates. Assumption for Calculating Tourism Benefits Without Project Profile 2018-2022 2023-2030 2031-2040 2041-2046 International arrivals growth rate 5.4% 4.4% 2.9% 1.4% International length of stay (days) 3.0 3.0 3.0 3.0 International daily spending ($) 75.0 75.0 75.0 75.0 Domestic arrivals growth rate 5.5% 4.4% 2.9% 1.4% Domestic length of stay (days) 1.5 1.5 1.5 1.5 Domestic daily spending ($) 50.0 50.0 50.0 50.0 With Project Profile 2018-2022 2023-2030 2031-2040 2041-2046 International arrivals growth rate 5.4% 4.7% 3.1% 1.4% International length of stay (days) 3.0 3.1 3.1 3.1 International daily spending ($) 75.0 75.0 75.0 75.0 Domestic arrivals growth rate 5.5% 4.7% 3.1% 1.4% Domestic length of stay (days) 1.5 1.6 1.6 1.6 Domestic daily spending ($) 50.0 50.0 50.0 50.0

Assumption for Calculating Tourism Benefits Without Project Profile 2018-2022 2023-2030 2031-2040 2041-2046 International arrivals growth rate 6.3% 4.4% 2.9% 1.4% International length of stay (days) 1.7 1.7 1.7 1.7 International daily spending ($) 40.0 40.0 40.0 40.0 Domestic arrivals growth rate 7.2% 4.4% 2.9% 1.4% Domestic length of stay (days) 1.5 1.5 1.5 1.5 Domestic daily spending ($) 27.6 27.6 27.6 27.6 With Project Profile 2018-2022 2023-2030 2031-2040 2041-2046 International arrivals growth rate 6.3% 4.7% 3.1% 1.4% International length of stay (days) 1.7 1.8 1.8 1.8 International daily spending ($) 40.0 40.0 40.0 40.0 Domestic arrivals growth rate 7.2% 4.7% 3.2% 1.4% Domestic length of stay (days) 1.5 1.6 1.6 1.6 Domestic daily spending ($) 27.6 27.6 27.6 27.6 Assumption for Calculating Tourism Benefits Without Project With Project Profile 2018-2022 2023-2030 2031-2040 2041-2046 2018-2022 2023-2030 2031-2040 2041-2046 International arrivals growth rate 5.4% 4.4% 2.9% 1.4% 5.4% 4.7% 3.1% 1.4% International length of stay (days) 3.0 3.0 3.0 3.0 3.0 3.1 3.1 3.1 International daily spending ($) 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 Domestic arrivals growth rate 5.5% 4.4% 2.9% 1.4% 5.5% 4.7% 3.1% 1.4% Domestic length of stay (days) 1.5 1.5 1.5 1.5 1.5 1.6 1.6 1.6 Domestic daily spending ($) 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0

Assumption for Calculating Tourism Benefits Without Project With Project Profile 2018-2022 2023-2030 2031-2040 2041-2046 2018-2022 2023-2030 2031-2040 2041-2046 International arrivals growth rate 6.3% 4.4% 2.9% 1.4% 6.3% 4.7% 3.1% 1.4% International length of stay (days) 1.7 1.7 1.7 1.7 1.7 1.8 1.8 1.8 International daily spending ($) 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 Domestic arrivals growth rate 7.2% 4.4% 2.9% 1.4% 7.2% 4.7% 3.2% 1.4% Domestic length of stay (days) 1.5 1.5 1.5 1.5 1.5 1.6 1.6 1.6 Domestic daily spending ($) 27.6 27.6 27.6 27.6 27.6 27.6 27.6 27.6 ASEAN Arrivals (in thousands of persons) AAGR CAGR ASEAN share (%) Country 2012 2013 2013/2012 2014 2014/2013 2015 2015/2014 2016 2016/2015 2012-2016 2012-2016 2016 a Brunei Darussalam 209 225 7.6% 201 -10.7% 218 8.6% 219 0.3% - 1.1% 0.2% Cambodia 3,584 4,210 17.5% 4,503 7.0% 4,775 6.1% 5,012 5.0% 8.9% 8.7% 4.3% Indonesia 8,044 8,802 9.4% 9,435 7.2% 10,407 10.3% 12,023 15.5% 10.6% 10.6% 10.4% Lao PDR 3,330 3,779 13.5% 4,159 10.0% 4,684 12.6% 4,239 -9.5% 6.7% 6.2% 3.7% Malaysia 25,033 25,716 2.7% 27,437 6.7% 25,721 -6.3% 26,757 4.0% 1.8% 1.7% 23.0% Myanmar 1,059 2,044 93.0% 3,081 50.7% 4,681 51.9% 2,900 -38.0% 39.4% 28.6% 2.5% The Philippines 4,273 4,681 9.6% 4,833 3.2% 5,361 10.9% 5,967 11.3% 8.8% 8.7% 5.1% Singapore 14,491 15,568 7.4% 15,095 -3.0% 15,231 0.9% 16,403 7.7% 3.2% 3.1% 14.1% Thailand 22,354 26,547 18.8% 24,780 -6.7% 29,881 20.6% 32,588 9.1% 10.4% 9.9% 28.1% Viet Nam 6,848 7,572 10.6% 7,874 4.0% 7,944 0.9% 10,013 26.1% 10.4% 10.0% 8.6% ASEAN 89,225 99,145 11.1% 101,399 2.3% 108,904 7.4% 116,121 6.6% 6.9% 6.8% 100.0% ASEAN-CLV 75,463 83,583 10.8% 84,863 1.5% 91,500 7.8% 96,857 5.9% 6.5% 6.4% a International arrivals by air only for Brunei Darussalam. 2016/2012: 28.35% Source: ASEAN Secretariat 30.14%

CLMV countries Arrivals (thousands of persons) AAGR CAGR ASEAN share (%) Country 2012 2013 2013/2012 2014 2014/2013 2015 2015/2014 2016 2016/2015 2012-2016 2012-2016 2016 Cambodia 3,584 4,210 17.5% 4,503 7.0% 4,775 6.1% 5,012 5.0% 8.9% 8.7% 4.3% Lao PDR 3,330 3,779 13.5% 4,159 10.0% 4,684 12.6% 4,239 -9.5% 6.7% 6.2% 3.7% Myanmar 1,059 2,044 93.0% 3,081 50.7% 4,681 51.9% 2,900 -38.0% 39.4% 28.6% 2.5% Viet Nam 6,848 7,572 10.6% 7,874 4.0% 7,944 0.9% 10,013 26.1% 10.4% 10.0% 8.6% CLMV 14,821 17,606 18.8% 19,617 11.4% 22,084 12.6% 22,164 0.4% 10.8% 10.6% 19.1% Source: ASEAN Secretariat

CLMV ASEAN share 16.6% 17.8% 19.3% 20.3% 19.1%

CLV countries Arrivals (thousands of persons) AAGR CAGR ASEAN share (%) Country 2012 2013 2013/2012 2014 2014/2013 2015 2015/2014 2016 2016/2015 2012-2016 2012-2016 2016 Cambodia 3,584 4,210 17.5% 4,503 7.0% 4,775 6.1% 5,012 5.0% 8.9% 8.7% 4.3% Lao PDR 3,330 3,779 13.5% 4,159 10.0% 4,684 12.6% 4,239 -9.5% 6.7% 6.2% 3.7% Viet Nam 6,848 7,572 10.6% 7,874 4.0% 7,944 0.9% 10,013 26.1% 10.4% 10.0% 8.6% CLV 13,762 15,562 13.1% 16,536 6.3% 17,403 5.2% 19,264 10.7% 8.8% 8.8% 16.6% Source: ASEAN Secretariat 2016/2012: 39.98%

CLV ASEAN share 15.4% 15.7% 16.3% 16.0% 16.6% Tourism in Cambodia, the Lao People’s Democratic Republic, and Viet Nam Cambodia Lao PDR Viet Nam Source International visitor arrivals 2016 (million) 5.01 4.24 10.01 NTOs International visitor arrivals AAGR 2008–2016 (%) 12.5 15.4 10.1 NTOs International visitor expenditure 2016 ($ billion) a 3.21 0.72 18.18 NTOs Direct contribution to gross domestic product 2016 (%) 12.2 4.3 4.6 WTTC Tourism workers (direct employment) 2016 (thousand) 988.2 118.0 1,959.6 WTTC Women’s share of direct employment (%) ~54 ~50 ~70 Tourism investment 2016 ($ billion) 0.62 0.55 5.45 WTTC International visitor expenditures, share of total exports 2016 (%) 26.5 23.1 4.5 WTTC Average expenditure per international visitor 2016 ($) 641 171 1,816 NTOs ASEAN Growth CAGR Growth Share 2008 2010 2012 2014 2015 2016 2016/2015 2012/2016 2016/2012 (%) Cambodia 2,125 2,508 3,584 4,503 4,775 5,012 5.0% 8.7% 39.8% 4.3% Lao PDR 1,736 2,513 3,330 4,159 4,684 4,239 -9.5% 6.2% 27.3% 3.7% Myanmar 193 792 1,058 3,081 4,681 2,900 -38.0% 28.7% 174.1% 2.5% Viet Nam 4,207 5,050 6,848 7,874 7,944 10,013 26.0% 10.0% 46.2% 8.6% Subtotal 8,261 10,863 14,820 19,617 22,084 22,164 0.4% 10.6% 49.6% 19.1% Brunei Darussalama 226 214 209 201 218 219 0.4% 1.2% 4.7% 0.2% Indonesia 5,506 7,003 8,045 9,435 10,407 12,023 15.5% 10.6% 49.4% 10.4% Malaysia 20,236 24,577 25,033 27,437 25,721 26,757 4.0% 1.7% 6.9% 23.0% Philippines 3,092 3,521 4,273 4,833 5,361 5,967 11.3% 8.7% 39.6% 5.1% Singapore 10,288 11,639 14,491 15,095 15,231 16,403 7.7% 3.1% 13.2% 14.1% Thailand 14,464 15,936 22,354 24,780 29,881 32,588 9.1% 9.9% 45.8% 28.1% Subtotal (ASEAN-6) 53,812 62,890 74,405 81,781 86,819 93,957 8.2% 6.0% 26.3% 80.9% Total (ASEAN) 62,073 73,753 89,225 101,398 108,903 116,121 6.6% 6.8% 30.1% 100.0% a International arrivals by air only for Brunei Darussalam.