ROAD SECTOR DEVELOPMENT PROJECT

(IDA Credit No 4832-NP, 5002-NP and IDA Grant No.H-339-NP, H-629-NP) Implementation Review August 26-September 04, 2013 Public Disclosure Authorized AIDE MEMOIRE

I. Introduction and Acknowledgments 1. A World Bank review team1 (see Annex 1a for the Team members’ list) carried out an implementation review from August 26-September 04, 2013 of the Road Sector Development Project (RSDP). The review had two-fold objectives: (i) to appraise the project status and to identify key implementation issues; and (ii) to identify and agree with the Government of Nepal (GON) on future course of actions that are necessary for the satisfactory project implementation. This review was particularly important given that the last review had established significant deterioration of the project’s overall performance. The Team visited RSDP roadwork sites to summarily assess the roadwork quality and progress status of contracts’ implementation. 2. The Team would like to thank GON for the hospitality extended to it, especially by counterpart Public Disclosure Authorized agencies and officials (see Annex 1b for the list of persons met). This Aide Memoire summarizes the main review findings, agreements reached, and recommendations made Discussions held in the wrap up meeting (September 03, 2013) at the Ministry of Physical Infrastructures and Transport (MoPIT) and comments received on the draft are reflected in this version of the Aide Memoire. This Aide Memoire will be classified as a public document, as per the World Bank’s Access to Information policy and as per the decision of the wrap up meeting. II. Key Project Data 3. The following table provides the summary project data and the summary performance ratings: Project Data Project Performance Ratings Board Approval: 06-Dec-2007 Summary Ratings Last Now Effectiveness Date: 21-Feb-2008 Achievement of PDO MS MS ◄► Public Disclosure Authorized Closing Date: 30-Jun-2015 Implementation Progress MU MU ◄► Loan/Crdit Amount: $116.07m Project Management MU MU ▲ Amount Disbursed: $79.21m (68 %) Procurement MS MS ◄► Financial Management MU MU ◄► Safeguards MU MS ▲ M&E MS MS ◄► Counterpart Funding MU MS ▲ Notes: S- Satisfactory; MS – Moderately Satisfactory; MU - Moderately Unsatisfactory; U – Unsatisfactory;▲ Improving trends; ▼ Deteriorating trends; ◄► Static III. Achievement of Development Objectives Status 4. The progress made towards the achievement of the Project Development Objective (PDO) has been judged as “moderately satisfactory”. As reported earlier a social impact study was conducted in October, 2011. The study verified the two outcome indicators (linked to all weather access and travel time reduction) under original project scopes. The study results show that two outcome indicators Public Disclosure Authorized have surpassed targets. RSDP has also completed baseline studies for roads under additional financing (AF). The comprehensive achievements of these two PDO outcome indicators will be assessed once the socio-economic impact study is completed. RSDP plans to commence the study in February, 2014, at the end of the completion of the civil works, and to conclude the study by September, 2014. The most recent road condition survey (November, 2012) results show that the proportion of black-topped Strategic Road Network (SRN) roads that are in poor condition was 11.27% (against an end-project

1 Hereinafter referred as “The Team” target of 15%). The comparable figure from November, 2012 was 11.31%. This means that the condition of the network remains stable. The last review reported that the progress linked to the implementation of roadwork contracts and asset management had been unsatisfactory. The situation has not improved significantly between two reviews. This may influence the PDO indicators’ outcome adversely. Annex 2 provides the summary progress on the achievement of results. IV. Current Implementation Status Road Development Component 5. The progress of road development component continues to be “moderately unsatisfactory”. There has not been any significant progress in the contractors’ performance. However, recently RSDP has become more involved in the contractors’ performance monitoring. 6. Upgrading Works Sub-Component: RSDP’s target is to upgrade 700km of earthen tracks to all- season low-cost motorable road standards. Eight remote district headquarters2 in Mid and Far-Western regions of Nepal will get all-weather road connections once these roads are built. As of end-August, 2013 two district headquarters (Baitadi and Dailekh) are connected. So far RSDP upgraded 449km of roads (414km-Otta-seal, 5km-DBST surface, 30km-gravel surface; 299km-original project scopes plus 150km-under AF). Two contracts covering 30km roads (sections previously left as gravel surface due to slope stability problems) have been awarded for upgrading to Otta-seal standards. They are in the initial stage of implementation. 7. The progress of implementation of 23 on-going upgrading contracts ranges from 24% to 96%. Among them, three contracts (two contracts of Khodpe-Chainpur (KC) road and a contract of Chinchu-Jajarkot (CJ) road) are at the last stage of completion. The recent flood in the Mid and Far- West has affected two project roads significantly. The most affected road is the Gokuleshwor- Darchula (GD) road (contract 2B sections). The flood has left 9 cuts and a 900m washed-away section. Re-alignments are now necessary at various locations of this road. DOR has already started emergency road opening activities at these sections. Once these activities are completed RSDP plans to upgrade these sections to remaining upgraded road section standards. The Team advised RSDP to liaise closely with District Road Office (DRO), Baitadi on this in order to ensure that appropriate planning and engineering steps are followed in the opening of these sections. The World Bank policy also requires due-diligence in such a case, as these sections will be a part of a World Bank funded road. In the case of other roads (including KC road) the additional activities linked to the restoration of flood damaged sections will be accommodated within existing contracts. It was agreed that RSDP will provide the Bank with a full report on the flood damages by end-September, 2013 and complete the redesign works by November, 2013. 8. The Team has noted significant slow progress in 14 contracts. The affected roads are: Sitalpati- Musikot (SM) road 4 contracts, Khidkijula-Manma-Jumla (KMJ) road 8 contracts and CJ road 2 contracts. The physical progress of 10 RSDP upgrading contracts is below 35%, against 86% of the time elapsed. Contactors already missed milestones in many cases. However, RSDP has started close monitoring of these contracts recently. The project has issued warning letters to non-performing contracts. In some cases, three warning letters have been issued. RSDP has started fortnightly progress review of contracts, has been arranging one-to-one meetings with contractors, and applied liquidated damages to some contracts. In spite of all these initiatives, no significant progress (of non- performing and slow performing contracts) has been achieved. The Team expressed serious concerns about the performance of a number of contractors. RSDP had agreed to instruct the contractor’s to prepare and submit detail resource-based revised work schedule for all incomplete contracts. Subsequently the project will check, approve and monitor the revised contract completion schedules. RSDP will share these work schedules with the Bank before end-September, 2013. Even after taking these measures those contracts that do not show sign of significant improvements will be terminated. The Bank team will continue to assess the progress. The Bank may unilaterally cancel funding of those contracts that do not show adequate progress and the project fails to take appropriate actions against the contractors.

2 District headquarters are: Baitadi, Darchula, Bajhang, Dailekh, Kalikot, Jajarkot, Rukum and Jumla

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9. RSDP has agreed to take immediate steps to restore the ferry service at Veri river crossing. The ferry cannot operate any more given that the recent flood damaged the tower and the ferry itself. It is to be noted that the performance of three CJ road contracts (5B, 5C and 5D) is dependent on the operation of the ferry service. The ferry provides the only transport link access to these contract sites. RSDP has also agreed to mobilize consultants’ design and supervision team immediately for the design and implementation of two newly awarded contracts (SKM 8A and TSD 8B). The quick finalization of the slope stability designs is important for the implementation of these contracts. 10. Field visits have identified a number of issues. The Team recommends the following to address them: (i) pro-active monitoring of contracts progress to expedite contract implementation; (ii) due diligence checks and controls applied in quarry operations and managing spoil disposal; (iii) ensuring all-time use of safety gears by workers and supervision staff at sites and the safety of pedestrians and vehicles on under-construction roads; (iv) completion of bio-engineering works including small scale structures and slope drain works within the remaining wet period; (v) completion of the assessment of flood damages and finalization of contract variations; (vi) making the codes available to the field laboratories and ensuring appropriate setting up of mini laboratories; (vii) improvement of gabion works qualities (including the use of binding wire, production of sample gabion boxes and training of workers). These were discussed and agreed with RSDP. While Annex 3 provides details of the sub- component progress, Annex 11 provides the field visit findings. 11. Periodic Maintenance Road works: RSDP target is to undertake periodic maintenance (PM) of 2,550 km of black-topped strategic roads. So far, the project completed approximately 1,323 km (original financing: 436 km and AF: 887 km). The Team noted with concerns that six PM contracts (constitute 148 km sections) procured over two years ago (in FY2010/11) are yet to be completed. Progress of these contracts ranges from 10% to 80%. Eight contracts comprising 233km road sections (FY2011/12) procured more than a year ago have physical progress less than 15%. Four out of the eight contracts have zero progress. The Team recommends the initiation of immediate actions, including the termination of the non-performing contracts. RSDP team has agreed to complete the review of these contracts with the concerned field offices by end-September, 2013. Contractual actions will be initiated based on the review findings. The Bank team may also cancel its parts of the funding if the situation is not improved substantially. DOR has identified 522 km of road requiring PM in FY 2012/13. RSDP started the procurement process for 23 contracts. By July 2013, 19 contracts (425 km) were awarded and remaining four contracts (97 km) went for re-tendering due to various reasons. 12. Total target for the project is to complete PM of 2,550 km road length (original financing: 450 km and AF: 2,100km). RSDP has already contracted roads that total 2,287km (roughly 89% of the target). Of them 1,323 km (approximately 52%) already completed. This means 964km of contracted length is yet to be completed. DOR has identified a length of roughly 500km for PM in FY 2013/14. The Team has noted with satisfaction that in FY 2013/14 GON has provided 100% PM budget to the Roads Board Nepal (RBN). The Team agreed to a DOR proposal that the periodic maintenance works from FY2013/14 would be fully funded from RBN resources (so far RSDP contributed 10% resources). This means that from FY2013/14 RSDP will no longer be responsible for the coordination of the periodic maintenance works. However, the project will continue to monitor PM activities and coordinate with the Maintenance Branch in order to ensure that the PM target (2,550km) is achieved within the project period. Annex 3 provides details of this sub-component. Field visits have identified the following issues, which require urgent attention: (i) an improvement of the road works’ quality control process (e.g. stripping, no traffic control); (ii) an improvement of contract management (e.g. time extension, application of milestone related measures); (iii) devising appropriate roles of the Central Road Laboratory (CRL) in supporting the field offices in quality assurance aspects of PM road works; and (iv) an improvement in the timely reporting. 13. Road Safety Works: RSDP has so far awarded nine road safety physical work contracts and they are now complete. An assessment of additional road safety works for Prithivi and Arniko Highways has started. For FY 2013/14 an investment of NPR 48 million has been planned. The Team suggested RSDP to finalize the study, identify activities and include them in the Procurement Plan.

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14. A consultant team (comprising an international and two national consultants) started the road safety audits of RSDP roads in June, 2013. The Team has submitted an inception report. There has been a lull in team’s activities due to the monsoon. It is expected that the road safety audit study report will be available by end-November 2013. 15. The UK Department for International Development (DFID) has shown interest to fund the road safety interventions in RSDP roads. DFID intends to make GBP 5m (approximately $8m) available for the procurement of crash barriers on these roads. Discussions are on-going with DFID on the scopes and modalities of such funding. The project will require restructuring in case an agreement is reached for the use of such funding as this will require changes in the results framework. Institutional Strengthening and Policy Reform Component 16. The rating of this component has been retained as “moderately satisfactory”. Although a number of actions linked to this component are initiated, the project could not complete the agreed actions within the agreed last review target dates. A delay in the approval of the annual work program due to the lack of adequate budget has been identified as one of the main causes for such delays. The Team noted with satisfaction the approval of the Road Safety Action Plan by the Cabinet. Now MoPIT plans to organize a high level consultation workshop (potentially in end-October, 2013) with stakeholders in order to devise a strategy to implement the plan. The Financial Management Information System (FMIS) and the Contract Management System (CMS) have been finalized and necessary training was conducted. However, the system needs to be populated with RSDP and Bridges Improvement and Maintenance Program (BIMP) data. RSDP agreed to make the CMS operational by November, 2013. Activities linked to the improvement of the existing e-bidding system have been delayed substantially. The project also agreed to finalize e-bidding services contracts by December, 2013. The short-listing of consultants for the mid-term review of the Priority Investment Plan (PIP) has been completed and the Request for Proposal (RFP) has been issued. RSDP plans to complete the consultant selection process by November, 2013. Also the bridge inspection vehicle contract is awarded and two supervision vehicles have been procured. 17. The Highway Management System report is awaiting endorsement from MoPIT. The report recommends the development of a comprehensive DOR data management policy. The Team agreed with the DOR proposal of engaging consultants to pilot road inventory approach on two road corridors (Birgunj- Hetauda- Narayanghat- Mugling- Kathmandu- Dhulikhel-Kodari) that represent all terrain types. The consultant will also develop a road data management system. Such an approach will help in the development of a comprehensive road inventory and data management system for SRN roads subsequently. The project will share TORs for these activities with the Bank and will update the procurement plan accordingly. 18. It was previously agreed that RSDP would support in the implementation of BIMP. The support will mainly be linked to the Bridge Project’s capacity development areas. This will necessitate a restructuring of RSDP. The Bank and DOR have been working on the potential expenditures under different components/sub-components and they are expected to be finalized soon. The projected expenditures will form the basis for the restructuring of RSDP. Annex 4 summarizes component assessment details. Actions agreed under this component have been presented in Annex 6. Safeguards Performance 19. Social Safeguards: The review has rated the social safeguard progress as “moderately satisfactory”. The Team is pleased to report that the project has made notable progress in the social safeguard measures’ implementation. RSDP has implemented most of the actions agreed during the last review (Annex 5 provides details). The verification of the loss of land and structures are now complete for all five roads (Table 7.1 of Annex 7). The verification and the valuation of loss of trees remain incomplete for KMJ road only. Good progress has been made in the disbursement of compensation for land and structures ( Table 7.2 of Annex 7). Nonetheless, affected families could not be traced in a few cases. Although RSDP has made progress in deed transfer, the progress is, indeed, slow in the case of GD road. Insufficient manpower and the lack of adequate co-operation

4 from local land issues related offices3 are the main causes. Project officials have now taken up local office issues with the Chief District Officer (CDO). The Team has noted that Resettlement & Rehabilitation (R&R) assistance was being paid only for permanent structures in SM and KC roads. RSDP has now agreed to pay R&R assistance to Project Affected Persons (PAPs whose temporary structures were affected. RSDP informed the Team that R&R assistance for 4 structure owners on CJ road had not been released as they refused to move out of the right-of-way (ROW) although they had been compensated. The project will now write to the CDO and R&R assistance will be released only after the resolution of the issue. RSDP has agreed to arrange meetings with roadside stakeholders before the handing over of roads. The meetings will inform the stakeholders about the completion of road development activities. The meeting will be attended by project officials and social mobilizers. The identified immediate actions for RSDP include: (i) the finalization and implementation of supplementary Resettlement Action Plans (RAPs); (ii) the disbursement of R&R assistance and support allowance for temporary structures in SM and KC roads; (iii) the speeding up of disbursements linked to land compensation, structure and trees; R&R assistances and Support allowances for remaining PAPs; (iv) the resolution of complaints in Rukum district; and (v) the finalization and implementation of Vulnerable Community Development Plans (VCDPs). 20. Environmental Safeguards: The progress linked to environmental safeguards has been assessed as “moderately satisfactory”. Significant improvements have been observed in the monitoring, preparation and implementation of site plans and bio-engineering works. All roads now have updated Site-specific Environmental Management Action Plans (SS-EMAPs). Geo-Environment and Social Unit (GESU) has finalized generic SS-EMAP format and a table of contents. This will be used in the mainstreaming of SS-EAMPs in DOR operations. Supervision Consultants now carry out regular site visits (approximately once in one and a half months in each road), GESU carried out second compliance checks on SM and CJ roads, and external monitoring reports are now available. RSDP prepared site plans for waste tipping, quarrying, crusher plants, as well as bioengineering work plans, for almost all contract packages. Coordination meetings at field during the site visit and at the center (following field visits) have been taking place. They are found to be useful in the implementation of mitigation measures. Nonetheless, cases of unprotected spoil disposal, delays in the implementation of bio-engineering works and quarry site or crusher plant restoration, and cases of inadequate health & safety measures at work and camp sites have been observed. The Team urged RSDP to take prompt actions in these areas (Annex 6 provides specific time-bound agreed actions). Annex 7 details environmental safeguard review findings. Governance, Accountability and Peace Filter 21. RSDP attention to GAAP actions is satisfactory. National Vigilance Centre (NVC) has selected a total of 11 sub-projects for Technical audit (2 upgrading and 9 periodic maintenance works) in FY 012/13, as per last review’s recommendation. NVC discussed technical audit report findings and Non Compliance Report (NCRs) with all stakeholders. Now NVC plans to monitor the NCRs. The improvement process of DOR-wise IT-based Grievance Redressal Mechanism (GRM) that will include complaints tracking and feedback provisions has now been initiated. A study on the impact of the introduction of e-bidding in DOR will be supported by the Bank, under a separate funding source. The impact study shall be carried out jointly with the DOR and expected to have full cooperation for the collection of procurement information since FY2007/08. Engagement of social mobilizers in each of the upgrading road sections has been found to be helpful with regard to information dissemination, especially at the community level. Annex 10 summarizes the findings. V. Procurement, Disbursement and Financial Management 22. Procurement: The overall procurement progress is judged as “moderately satisfactory”. There have been significant slippages in the procurement of third year periodic maintenance (PM) contracts. The procurement process only started in January, 2013. Two upgrading works contracts and 19 PM works contracts were awarded up to July, 2013. Four PM contracts now require re-tendering due to e- bidding portal problems in the earlier bid process. RSDP awarded bridge inspection vehicle and

3 Mainly District Land Revenue Office (DLRO) and District Land Survey Office (DLSO)

5 supervision vehicles contracts on time. In June, 2013 RSDP completed the process of updating of the Procurement Plan. The Procurement Plan again needs updating. RSDP agreed to send it to the Bank by September, 2013. While Annex 6 provides the agreed procurement related actions, Annex 8 summarizes the procurement status of RSDP components. 23. Disbursement and Financial Management: The ratings linked to financial management and counterpart funding are "moderately unsatisfactory" and "moderately satisfactory" respectively. The Team noted that all the agreed actions had been completed except the action linked to the capacity building training of cost centers. RSDP has agreed to conduct this training by October 31, 2013. An amount of USD15.20 million has been documented during FY2012/13. RSDP have not yet utilized funds from IDA Grant H629 and the IDA Credit 5002. The project is yet to submit the FY 2012/13 third trimester report. The main identified issues include: (i) non-appointment of a full time Accounts Officer. The post remains vacant since March 2013; (ii) the slow utilization of the available resources (low-disbursement); (iii) delays in transferring reimbursable expenditures to the Government treasury account; and (iv) non-performing contract monitoring system. While Annex 8 details disbursement and financial management linked review findings, Annex 6 presents agreed actions. VI. Key issues in implementation i. The overall implementation progress remains “moderately unsatisfactory”. Although progress has been made in social and environmental safeguard, and project management areas, progress in other areas remains unchanged; ii. There has not been any significant progress in the contractors’ performance. Nonetheless, RSDP has become more proactive recently in the monitoring of contractors’ performance. The review has identified a total of 28 contracts (14 upgrading and another 14 periodic maintenance contracts) as non-performing or severely slow performing. Actions are needed to expedite their performance or to terminate them; iii. There have been improving trends in the implementation of the Institutional Strengthening and Policy Reform Component. A number of actions linked to this component are initiated. However, the implementation of most of the last review agreed actions has experienced severe delays. The issues need urgent attention include the approval of the Highway Management System report, the development of the DOR data management policy, and the quick initiation of the procurement of road inventory consultant procurement process; iv. Social safeguard performance has been upgraded to “moderately satisfactory”. However, prompt actions in the following areas are needed: (a) the finalization and implementation of RAPs, (b) the speeding up of disbursements for remaining PAPs linked to land compensation, structure and trees, R&R assistances etc., (c) the finalization and implementation of VCDPs; v. Environmental safeguard performance has also been upgraded to “moderately satisfactory”. Nonetheless, issues that require attention include: (a) use of appropriate methods for spoil disposal, (b) faster implementation of bio-engineering works, (c) proper restoration of the quarry sites or crusher plants, (iv) due attention to issues linked to health & safety at work and camp sites; vi. The overall procurement performance remains “moderately satisfactory”. RSDP needs to conclude the procurement of four third-year periodic maintenance quickly; and vii. The performance of financial management remains “moderately unsatisfactory”. The position of the Accounts Officer remains vacant since March, 2013 and it needs to be filled immediately. Also urgent actions regarding the quick transfer of reimbursable expenditure to the Government treasury and the timely submission of financial reports are required. VII. Proposed timing and focus of the Next Review 24. It has been agreed that the next review will be held in end-November, 2013. The review will focus on: (i) the achievement of results by the project; (ii) the implementation status of the project; and (iii) the status of the implementation of actions agreed during this review. The review will focus on areas where performance issues have been highlighted in this review in order to assess their progress.

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ANNEXES

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Annex 1a Implementation Review Team

1. Annu Rajbhandari, Environmental Specialist 2. Bigyan Pradhan, Sr. Operations Officer 3. Deepak Shrestha, Sr. Transport Specialist & Co-Task Team Leader 4. Drona Raj Ghimire, Environmental Specialist 5. Durga Prasad KC, Consultant (Roads) 6. Farhad Ahmed, Sr. Transport Specialist & Task Team Leader 7. Hiramani Ghimire, Sr. Governance Specialist 8. Parthapriya Ghosh, Sr. Social Development Specialist 9. Pradeep Shrestha, Consultant (FM) 10. Radhika Singh, Team Assistant 11. Rekha Shreesh, Social Development Specialist 12. Shambhu Uprety, Procurement Specialist 13. Shubu Thapa, Team Assistant 14. Yogesh Malla, Financial Management Specialist

Annex P-1

Annex 1b

List of Persons Met (in Alphabetical Order)

1. Dr. B. R. Shahi, SDE, CRL, DOR 2. Mr. Ajay Kumar Mull, Project Coordinator, RSDP, DOR 3. Mr. Badri Karki, Social expert, MMM Group 4. Mr. Basanta Lal Shrestha, SME, MMM Group 5. Mr. Buddhi Neupane, SDE, CRL, DOR 6. Mr. C. K. Subedi, Unit Chief, Road Traffic Unit, DOR 7. Mr. Dipak KC, Project In-charge, Chinchu Jajarkot road, RSDP 8. Mr. Ghanshyam Gautam, Chief, RSSDU/ MIS-IT unit, DOR 9. Mr. Kesab Sharma, DDG, Foreign Aid Cooperation Branch, DOR 10. Mr. Lal B. Shah, DDG, Maintenance, DOR 11. Mr. Lalit K. Sharma, TL, MMM group 12. Mr. Lalit P. Joshi, Environmental Specialist, MMM Group 13. Mr. Prem Maharjan SDE, NVC 14. Mr. Purna Siddhi Lal Shrestha, Unit Chief, GESU 15. Mr. R. N. Bastola, Executive Director, Roads Board Nepal 16. Mr. Shiva P. Nepal, Project-in-Charge, PIU, SM Road 17. Mr. Shivahiari Sapkota, Joint Secretary, NVC 18. Mr. Sir Bahadur Ghimire, Project In-charge, Surkhet- Jumla road, RSDP 19. Mr. Tulsi Prasad Sitaula, Secretary, MOPIT 20. Mr. Umesh Bindu Shrestha, HMIS unit , DOR, 21. Mr. Yogananda Yadav, DTL, MMM Group 22. Ms. Meera Joshi, Environmental Safeguard Officer, GESU, DOR 23. Ms. Rama Kumari Shrestha, Social Safeguard Officer, GESU, DOR

Annex P-2

Annex 2 ROAD SECTOR DEVELOPMENT PROJECT Progress on the Achievement of Results Implementation Review August 26-September 04, 2013

PDO Project Outcome Progress To Date (August 31, 2013) Indicators (i) To provide residents of 6 percent increase in GIS analysis shows 4.05% increase beneficiary districts with population in project districts all season road access to have all season road access thereby reducing travel within 20 minutes walking time and improving access distance (in eight project to economic centers and districts) social services. 35 percent decrease in 45 percent decrease in journey times to key journey times to key economic centers (major market) in the economic centers in the project area. project area 44 percent decrease in journey times to key 25 percent decrease in social services in the project area journey times to key social According to Socio-Economic Impact services in the project area Study, October-2011. Reduce the percentage of 11.31 % and 11.27% of black-top road in black-top SRN in poor poor condition as per road condition survey condition to 15 percent results of December, 2011 and November, 2012, respectively Intermediate Outcomes Intermediate Outcome Indicators Road Development Component I (i) Targeted SRN is all 100 percent of 700km of 449 km upgraded So far upgraded (414km- weather sealed gravel road target roads receiving Otta-seal, 5km-DBST surface, 30km-gravel upgrading works surface; 299km-original project scopes plus 150km-under AF).. (ii) Sustainable periodic 100 percent of 2,550 km of 1,323 km have been completed to June, maintenance of targeted highways received periodic 2013. highways and feeder roads maintenance All 632 km of SRN for Periodic executed No backlog periodic Maintenance in FY 2011/12 works has been maintenance within the procured & under progress. project period. For total 522 km (total 22 contracts), 18 Third Year PM contracts for FY 2012/13 have been awarded; 4 contracts went for re- bid and are in procurement process. For FY 2013/14 about 550 km road length identified under PM (IRAMP). All identified length will be addressed using available budget. (iii) Road Safety Action Publication and Road Safety Action Plan has been approved Plan & physical works implementation of actions by GON. Launching of the plan is being planned by GON.

Annex P-3

PDO Project Outcome Progress To Date (August 31, 2013) Indicators Institutional Development Component II (i) Improved staff capacity HR policy updated and 3 year Training being undertaken as per the within DOR training plan finalized. business plan. Domestic and international training provided for DOR staff as per policy and plan (ii) Capacity building in a) Completion of geo- a) Assessments of on-going improvement Geo-technical, technical assessments, b) carried out as recommended; b) Site specific Environmental and Social EMAP and RAP compliance EMAP and RAP monitoring being done aspects and create monitoring and c) periodically from GESU and MoPIT. awareness on HIV/ AIDS performance in creating Independent external consultant used for awareness among project monitoring environmental and social aspect. construction workers and road Consultants were used to conduct HIV / users on HIV/AIDS AIDs awareness program. Independent compliance Monitoring reports shared with the Bank. (iii) DOR IT based MIS Completion of pilot WAN installed in 9 offices of DOR in the operational installation of wide area Kathmandu Valley and implemented for two network (WAN) in DOR years. FMIS upgraded into Web based and division offices in Kathmandu being used. CMS upgraded into Web-based and satisfactory operation and System and is being piloted. DOR has maintenance of IT based launched BMS. Performance-based high management system band width is procured. (iv) Road asset HDM4 used for bi annual Report on road data management is being management tools used for road condition assessment endorsed from the Ministry. TOR for the prioritization of road and preparation of annual development of a policy for data maintenance and maintenance plan management being finalized. TOR for upgrading works development of data management system and road inventory being finalized. (v) Improved quality Quality monitoring plan The Central Road Lab has been carrying out assurance prepared each year and internal quality audits and calibration of the quality audit carried out by lab equipment. Central Road Lab (vi) Improved RBN Act amended and more RBN act has been tabled in the Parliament effectiveness of Roads training and logistics and under discussion in the Parliamentary Board Nepal provided sub-committee Government decision to RBN has prepared five year business plan benchmark salaries to market (2012-2017), and submitted to the Board. rates Board has appointed a sub- committee to Human resource development review the business plan and yet to be (HRD) plan has been approved. incorporated in RBN business plan (vii) Third party technical Third party technical audit In FY 2012/13 Technical audit for 2 audit carried out for 20 percent of contracts under upgrading works and 9 the project works each year contracts under periodic maintenance were conducted by NVC. Discussions held with stakeholders.

Annex P-4

PDO Project Outcome Progress To Date (August 31, 2013) Indicators NVC is further monitoring issued raised in NCRs. 23 additional Technical auditors were trained (March 24 - April 12, 2013) In FY 2013/14. Also, two workshops were conducted by NVC, one at Biratanagar and one at Dang where about 115 technicians participated.

Annex P-5

Annex 3 Summary Progress of Road Development Component

Upgrading Sub-Component

Road Name Contract No. Length Original Contract Physical Financial Status (km) Estimated Cost Amount (NPR) Progress Progress (NPR) (%) (%) Original Satbanjh- RSDP/NCB/STJ/01 11.32 90,341,015 63,950,056 100 98 DLC issued Tripurasundari Road RSDP/NCB/STJ/02 11.15 92,473,660 76,996,094 100 98 DLC issued DLC issued. Financial RSDP/NCB/SG/07 19.00 166,184,140 173,312,973 100 103 progress > 100% due to price adjustments DLC issued. Financial RSDP/NCB/SG/8A 9.70 86,270,440 93,892,775 100 101 progress > 100% due to Satbanjh- price adjustments Gokuleswor Road DLC issued. Financial RSDP/NCB/SG/8B 9.58 81,021,374 70,606,751 100 102 progress > 100% due to price adjustments RSDP/NCB/SG/16A 8.72 149,873,405 107,323,879 100 99 DLC issued RSDP/NCB/SG/16B 5.97 61,166,637 45,248,327 100 98 DLC issued DLC issued. Financial RSDP/NCB/KJC/09 19.90 183,861,969 182,719,819 100 101 progress > 100% due to price adjustments RSDP/NCB/KJC/10A 10.20 10,795,083 83,211,467 100 100 DLC issued Khodpe-Bajhang DLC issued. Financial Road RSDP/NCB/KJC/10B 9.80 81,396,150 68,019,339 100 102 progress > 100% due to price adjustments RSDP/NCB/KJC/11A(Re) 10.00 108,062,284 89,625,994 100 99 DLC issued RSDP/NCB/KJC/11B(Re) 10.42 125,004,162 110,566,198 100 98 DLC issued Surkhet-Khidkijyula RSDP/NCB/SKM/3A(Re) 21.70 82,989,690 79,256,357 100 100 DLC issued

Annex P-6

Road Name Contract No. Length Original Contract Physical Financial Status (km) Estimated Cost Amount (NPR) Progress Progress (NPR) (%) (%) Road RSDP/NCB/SKM/3B(Re) 22.26 114,440,390 106,909,396 100 100 DLC issued RSDP/NCB/SKM/4 28.84 175,299,702 165,213,597 100 100 DLC issued RSDP/NCB/SKM/5A(Re) 13.40 83,897,217 90,345,941 100 100 DLC issued RSDP/NCB/SKM/5B(Re) 13.90 98,056,491 104,495,004 100 100 DLC issued DLC issued. Financial RSDP/NCB/SKM/6A(Re) 14.00 102,782,543 92,441,613 100 101 progress > 100% due to price adjustments

RSDP/NCB/SKM/6B(Re) 12.34 109,764,476 99,602,606 100 100 DLC issued.

RSDP/NCB/TSD/12 8.22 72,829,511 72,564,694 100 100 DLC issued

Tallodhungeswor- RSDP/NCB/TSD/13 11.86 84,075,182 87,707,608 100 98 DLC issued Dailekh Road RSDP/NCB/TSD/14 11.79 71,936,603 74,408,241 100 100 DLC issued RSDP/NCB/TSD/15(Re) 0.87 15,630,080 18,091,498 100 97 DLC issued

Additional Financing RSDPAF-W-UP-ICB-GD- 18.50 176,216,312 89.00 84.00 On-going 1A 149,503,916.63 RSDPAF-W-UP-ICB-GD- On-going 13.50 178,187,823 80.34 76.22 Gokuleshwor- 1B 154,735,803.64 Darchula Road RSDPAF-W-UP-ICB-GD- On-going 15.00 174,197,414 74.21 67.92 2A 170,330,855.95 RSDPAF-W-UP-ICB-GD- On-going 25.00 195,010,653 82.70 78.86 2B 187,408,993.37 RSDPAF-W-UP-ICB-KC- On-going 15.60 179,599,471 95.56 94.57 Khodpe- Chainpur 3A 174,533,489.29 Road RSDPAF-W-UP-ICB-KC- On-going 15.50 166,344,499 96.11 95.22 3B 138,838,139.15

Annex P-7

Road Name Contract No. Length Original Contract Physical Financial Status (km) Estimated Cost Amount (NPR) Progress Progress (NPR) (%) (%) RSDPAF-W-UP-ICB-KC- On-going 15.18 162,962,092 87.63 81.68 3C 146,965,998.78 On-going RSDPAF-W-UP-ICB-SM-4A 22.85 177,666,823 146,714,568.00 28.00 28.00 RSDPAF-W-UP-ICB-SM- On-going 22.5 184,782,778 46.22 46.22 Sitalpati-Musikot 4B 156,970,693.00 RSDPAF-W-UP-ICB-SM- On-going Road 19.5 188,416,632 29.50 29.50 4C 156,690,792.00 RSDPAF-W-UP-ICB-SM- On-going 20.62 194,709,531 43.33 43.33 4D 154,711,220.00 On-going RSDPAF-W-UP-ICB-CJ-5A 20.00 151,058,590 132,670,992.13 92.90 92.90 On-going Chhinchu-Jajarkot RSDPAF-W-UP-ICB-CJ-5B 24.60 171,945,318 153,085,863.56 86.49 86.49 Road On-going RSDPAF-W-UP-ICB-CJ-5C 16.00 194,166,098 171,097,855.44 55.61 36.71 On-going RSDPAF-W-UP-ICB-CJ-5D 20.01 196,620,004 180,603,675.67 54.02 53.70 RSDPAF-W-UP-ICB-KJ- On-going 14.56 193,595,644 24.12 18.23 6A 157,127,830.00 Khidkijyula-Jumla On-going Road RSDPAF-W-UP-ICB-KJ-6B 13.66 193,198,765 132,984,571.00 25.05 20.52 RSDPAF-W-UP-ICB-KJ-6C 14.00 194,380,592 36.19 29.67 On-going 142,992,861.00 RSDPAF-W-UP-ICB-KJ- On-going 12.00 198,232,868 24.55 20.38 6D 148,543,439.00 RSDPAF-W-UP-ICB-KJ- On-going 12.00 182,746,724 30.06 19.56 7A 152,167,275.00 On-going RSDPAF-W-UP-ICB-KJ-7B 14.00 201,686,219 167,133,778.00 37.43 23.92 Khidkijyula-Jumla On-going RSDPAF-W-UP-ICB-KJ-7C 14.00 194,613,809 151,312,631.00 24.93 12.67 Road RSDPAF-W-UP-ICB-KJ- On-going 15.98 193,611,531 27.25 16.45 7D 163,114,709.00 RSDPAF-W-UP-ICB-SKM- Agreement signed on 2 18.61 240,159,643.05 177,109,997.43 8A (Re) June, 2013

Annex P-8

Road Name Contract No. Length Original Contract Physical Financial Status (km) Estimated Cost Amount (NPR) Progress Progress (NPR) (%) (%) Monsoon-damaged RSDPAF-W-UP-ICB-TSD- Agreement signed on 2 13.21 144,915,923.91 101,891,581.33 Sections 8B (Re) June, 2013 Notes: DLC – Defect Liability Certificate

Emergency Maintenance (Monsoon damages)

Road Name Contract No. Length Estimated cost Contract Physical Financial Status (km) (NPR) Amount (NPR) Progress Progress (%) (%) RSDP-NCB-MD-SKM-01 28.84 50,384,491 33,796,011 100 98 DLC issued Surkhet- RSDP-NCB-MD-SKM-02 27.30 69,925,800 40,883,833 100 99 DLC issued Khidkijyula Road RSDP-NCB-MD-SKM-03 26.34 44,692,326 29,329,997 100 99 DLC issued Tallodhungeswor- RSDP-NCB-MD-TSD-04 27.51 67,505,773 49,184,230 100 98 DLC issued Dailekh Road Khodpe-Jhota- RSDP-NCB-MD-KJC-05 39.90 43,434,522 29,114,916 100 89 DLC issued Chainpur Road Satbanjh- Tripurasundari RSDP-NCB-MD-BD-06 60.78 31,406,234 21,698,798 100 98 DLC issued Road and Satbanjh- Gokuleswor Road

Annex P-9

Periodic Maintenance Sub-Component

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) RSDP Original (First Year) Nagarjun-Tandi RSDP-FYPM-NT-NCB-01 9.78 16,850,313 17,575,983 100 87 Completed Pipalbot-Naubise-Simle RSDP-FYPM-PNS-NCB-02 21.64 78,629,437 68,380,328 100 92 Completed Mugling Bridge- RSDP-FYPM-MAG-NCB- 31.91 45,320,309 36,403,630 100 93 Completed Anbukhaireni-Gorkha 03 Butwal-Kothi RSDP-FYPM-BK-NCB-04 22.54 31,001,373 23,958,949 100 90 Completed Hetauda-Pathlaiya-Birgunj- RSDP-FYPM-HPK-NCB- 25.51 111,444,228 90,991,011 100 97 Completed Kaliya 05 Biratnagar-Duhabi-Itahari RSDP-FYPM-BDI-NCB-06 23.46 48,311,435 41,141,451 100 94 Completed Kakarbhitta-Mawa RSDP-FYPM-KM-NCB-08 20.98 33,017,036 29,505,493 100 86 Completed RSDP Original(Second and

Third Year) Fikkal-Pashupatinagar, FikKal-Maikhola, Charali- RSDP-STYPM-NCB-01 36.86 50,888,482 50,389,193 100 90 DLP Jamunabari Itahari-Dharan, Duhabi-Itahari RSDP-STYPM-NCB-02 36.62 59,462,186 50,122,681 100 86 Completed Bhedatar-Mughat-Hile RSDP-STYPM-NCB-03 22.38 33,709,362 29,952,755 100 90 Completed Chalnedhunga-Khawa, Hanumante-Sangha,Chovar- RSDP-STYPM-NCB- 39.64 50,140,541 44,035,619 85 67 Completed Dashinkali, Mawa-Mugling- 04(Re) Mugling Bridge Tistung District Boarder, Gandak Canal-Junction Old RSDP-STYPM-NCB-05 41.10 52,192,564 44,575,667 100 95 Completed Alignment, Dhanushadham- Janakpur Aanbukhaireni-Dumre&Kotre- RSDP-STYPM-NCB-06 36.58 40,693,019 29,817,620 100 88 Completed Pokhara

Annex P-10

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) Tansen-Kaligandaki& MRM- Sakura, Bhairawa RSDP-STYPM-NCB-07 38.06 49,641,193 38,404,030 100 98 Completed Municipality of Siddartha Highway Nepalgunj- RSDP-STYPM-NCB- Kohalpur&NuwariKhola- 21.38 42,584,745 35,420,001 100 70 Completed 08(Re) Surkhet Budar-Gaira RSDP-STYPM-NCB-09 22.08 25,674,247 19,961,480 100 89 Completed RSDP Additional Financing (First-year Periodic Maintenance) Mechi Highway RSDPAF-W-FYPM-NCB- 23.56 34,146,861 25,382,209 20 23 On-going (Chihanedanda to Fikkal ) ER-Ilam-1A Mechi Highway (Chureghanti RSDPAF-W-FYPM-NCB- 32.14 46,599,131 34,172,940 10 9 On-going to Ranke ) ER-Ilam-1B Birtamod- Chandragadhi Road RSDPAF-W-FYPM-NCB- &Mechi Highway Charali – 26.31 39,464,911 29,741,355 100 99 Completed ER-Damak-2A Buddhabare RSDPAF-W-FYPM-NCB- East West Highway (MRM) 21.00 35,699,256 26,039,225 100 98 Completed ER-Damak-2B Inaruwa Kaptangunk RSDPAF-W-FYPM-NCB- 7.00 10,499,402 8,271,906 100 90 DLP Sahebgunj Road ER-Biratnagar-2C RSDPAF-W-FYPM-NCB- ARM (Lamidanda-Dolalghat) 13.75 32,920,149 23,518,992 100 90 DLP CR-Bhaktapur-1A Banepa –Punyamata- Panauti RSDPAF-W-FYPM-NCB- Road, Sallaghari – Duwakot 25.32 39,232,329 25,915,491 100 95 DLP CR-Bhaktapur-1B Road, &KhawaLamidanda, Galtchi Junction- Trishuli RSDPAF-W-FYPM-NCB- 44.55 87,686,296 73,125,044 100 96 DLP Bridge –MawaKhola, CR-Bharatpur-2A RSDPAF-W-FYPM-NCB- Mungling- Narayanghat Road, 15.10 108,970,825 84,742,663 100 100 Completed CR-Bharatpur-2B

Annex P-11

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) Lamidanda-Bhainse , Palung- RSDPAF-W-FYPM-NCB- Symbhanjyang , Tistung 26.22 50,552,339 37,407,202 100 93 Completed CR-Hetauda-3A (Kunchal)- Palung Bhaise-Bhimphedi and Bhaise- RSDPAF-W-FYPM-NCB- 20.00 27,542,885 19,707,512 90 92 Completed Samari CR-Hetauda-3B RSDPAF-W-FYPM-NCB- Bardibas-Jaleshwor Road 13.70 35,341,650 17,050,548 80 63 On-going CR-Janakpur-3C RSDPAF-W-FYPM-NCB- Kakani- Tandi, 23.53 36,709,621 27,475,739 100 96 DLP CR-Nuwakot-4A BanepaSindhuliBardibas RSDPAF-W-FYPM-NCB- 18.00 31,053,257 23,868,009 72 67 On-going Road, CR-Banepa-Sindhuli-4B BanepaSindhuliBardibas RSDPAF-W-FYPM-NCB- 21.60 35,997,626 20,691,423 100 88 DLP Road, CR-Banepa-Sindhuli-4C Prithvi Highway (Byas Municipality Border-Kotre) RSDPAF-W-FYPM-NCB- 17.83 24,851,240 19,318,413 77 75 On-going Dumre-BesisaharRoad WR-Damauli-1A (District Boundary -Besisahar) M.R.M Chandrauta- Dhankhola Road & M.R.M RSDPAF-W-FYPM-NCB- 30.05 45,132,865 33,027,889 100 100 Completed Chandrauta-Bahadurgunj- WR-Shivapur-1B Krishnanagar Road West Highway (i. Narayeni Bridge-Tiger mountain RSDPAF-W-FYPM-NCB- 30.91 39,879,559 27,775,422 100 100 Completed junction, ii. Tiger mountain WR-Butwal-2A junction-Arunkhola section East-West Highway (ArunKhola- Bardaghat&Sukaura-Butwal RSDPAF-W-FYPM-NCB- 24.93 47,622,063 34,474,680 100 100 Completed and Siddharth Highway And WR-Butwal-Palpa-2B BartungTansenRidiTamghas Road

Annex P-12

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) Pokhara- Baglung Road (Yamdi Bridge -Sandh Bridge RSDPAF-W-FYPM-NCB- 41.84 67,083,199 51,354,654 100 100 DLP Sector)and PokharaSarankot WR-Pokhara-3A Road Pokhara- Baglung Road RSDPAF-W-FYPM-NCB- (Sandh Bridge -Kaligandaki 24.11 34,932,624 26,905,162 100 100 DLP WR-Pokhara-3B Bridge Sector) Siddhartha Highway ( Walling -Syanja Sector)and Siddartha RSDPAF-W-FYPM-NCB- 39.71 66,623,745 48,688,645 100 99.4 DLP Highway ( Kuvinde - WR-Pokhara-3C Pokharamun_bdr Sector) East West Highway RSDPAF-W-FYPM-NCB- 38.90 58,103,246 37,658,017 100 100 DLP (DhanKhola to Lamahi ) MWR-Dang-1A Nepalgunj – Gulariya Feeder RSDPAF-W-FYPM-NCB- 35.22 75,855,534 44,665,271 95 95 DLP Road MWR-Nepalgunj-1B Mohan to RSDPAF-W-FYPM-NCB- Boradandi&Godawari to 61.10 51,159,692 36,334,579 94 94 Completed FWR-Mahendranagar-1A Faltude Mahakali Highway (Faltude to RSDPAF-W-FYPM-NCB- 42.20 49,815,624 36,570,913 26 26 On-going Budar&Gaira to Syaule) FWR-Doti-1B

RSDP Additional Financing (Second-year Periodic Maintenance) Birtamod (MRM)-Sanischare- RSDPAF-W-SYPM-NCB- On-going ( awarded 12.16 19,447,706.52 14,638,742.3 58.33 10 Budhbare ER-Damak-1A(Re) on Dec, 2012) Fikkal-Maikhola, Ranke- RSDPAF-W-SYPM-NCB- 26.03 42,947,715.90 29,633,333.57 0 10 On-going Phidim ER-Ilam-1B Base Camp-Bhedetar, Urlabari (MRM)-AambariChowk, RSDPAF-W-SYPM-NCB- 30.29 49,154,537.04 33,215,719.46 95 92 Completed AambariChowk-Bardanga, ER-Biratnagar-2A Dharan-Chatara-Barahachhetra

Annex P-13

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) RSDPAF-W-SYPM-NCB- Mulghat-PatleKhola 8.50 18,362,526.83 14,377,620.52 100 100 Completed ER-Dhankuta-2B Chauraharwa-Mirchaiya, RSDPAF-W-SYPM-NCB- Siswari Bridge-Cement 26.77 35,748,205.11 27,942,123.38 19.77 10 On-going ER-Lahan-3A Factory, Kanchanpur-Fattepur Army Camp-Nagarkot, Panchkhal(ARM)- PalanchowkBhagawati, RSDPAF-W-SYPM-NCB- 18.00 28,800,422.69 25,851,604.72 30 10 On-going LankuriBhanjhyang-Panauti- CR-Bhaktapur-1A Namobuddha-DSRM, Bakhandol (ARM)-Bogatigaon Sinamangal-Manahora-Thimi- Sallaghari, Kausaltar-Balkot- Sirutar-Biruwa, Thimi(ARM)- RSDPAF-W-SYPM-NCB- 9.59 40,858,635.95 38,062,878.42 60 10 On-going Bode-Karkigaun, CR-Bhaktapur-1B Chyamasingh-Amaldol, Amaldol_nala-Banepa Sopyang District Boarder- Naubise, Naubise-Galchi, RSDPAF-W-SYPM-NCB- Aanptari-Devghat, 41.99 57,665,618.83 40,764,270.65 35 25 On-going CR-Bharatpur-2A Malekhu_Dhadingbesi, Bharatpur bypass RSDPAF-W-SYPM-NCB- Thulokh- Kalanki 7.68 1,190,244.22 11,199,101.17 40 10 On-going CR-Nuwakot-2B Hetauda-Samari, lamidanda- Symbhanjhyang, RSDPAF-W-SYPM-NCB- 27.93 56,305,244.15 39,306,983.90 10 On-going Syambhangjhyang-Palung, CR-Hetauda-3A Palung-Tistung 10 Dharapani(MRM)- RSDPAF-W-SYPM-NCB- Dhanushadham-Janakpur, 27.00 56,685,051.42 35,066,278.54 60 54 On-going CR-Janakpur-3B Bardibas(MRM)-Jaleshwor Lamosangu-Ningaledanda, RSDPAF-W-SYPM-NCB- 52.00 62,399,391.61 43,473,065.07 30 13 On-going Ningaledanda-Charikot CR-Charikot-4A

Annex P-14

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) RSDPAF-W-SYPM-NCB- Sindhuli-Khurkot 12.50 22,277,737.42 21,267,886.51 30 10 On-going CR-Banepa-Sindhuli-4B Peeplamod-Naghdhunga, Kalanki-Tripureshwor, RSDPAF-W-SYPM-NCB- Tripureshwor-Balaju, Balaju- 7.85 51,102,059.88 48,627,170.13 30 10 On-going CR-Kathmandu-5A Balaju Bypass, Naghdhunga- Tankwshwor Baniyatar-Samakhushi- RSDPAF-W-SYPM-NCB- Lainchor, Chhuchepati- 8.70 50,187,336.92 48,074,474.56 30 10 On-going CR-Kathmandu-5B Mahankal-Kapan-Dandagaon Satdobato-Karmanas Bridge, Karmanas Bridge-Godavari, Godavari-Botanical Garden RSDPAF-W-SYPM-NCB- 35,410,691.72 13.78 37,236,000.00 40 24 On-going Junction, Thimi-Lokanthali- CR-Lalitpur-6A Tikathali-Manohara, Balkhu- Satdobato-Manohara Gwarko-Lubhu, Lubhu- RSDPAF-W-SYPM-NCB- 8.72 50,576,000.00 37,819,288.61 30 18 On-going Lamatar CR-Lalitpur-6B Narayani Bridge-Junction, RSDPAF-W-SYPM-NCB- Bardaghat-Pratappur, 33.38 31,998,356.81 34,575,403.83 15 10 On-going WR-Butwal-1A Bardaghat-Pratapur Gorusinghe-Chanauta, RSDPAF-W-SYPM-NCB- Patharkot-Kapilvastu district 32.81 49,214,144.77 38,042,922.96 0 10 On-going WR-Shivapur-1B border-ThadaJungen Bartung-Batasedanda-Harthok, RSDPAF-W-SYPM-NCB- 22.61 36,171,631.79 32,225,241 5 10 On-going Ghumti-Tamghas WR-Palpa-2A(Re) Kotre-BijayapurKhola, RSDPAF-W-SYPM-NCB- Kaligandaki-Waling, Pokhara- 39.09 62,125,818.08 46,668,467.77 100 100 On-going WR-Pokhara-2B PrithibiChowk Dumre-Muse Khola, Dumre- RSDPAF-W-SYPM-NCB- Bandipur, Khairenitar- 17.78 24,419,932.10 25,104,756.87 8 10 On-going WR-Damauli-2C Bhimad-Ghumarighat

Annex P-15

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) Lamahi-Ameliya. Lamahi- RSDPAF-W-SYPM-NCB- Tribhuvannagar Municipality 30.00 59,998,854.74 43,121,658.57 94 92 On-going MWR-Dang-1A boundry Shiva Khola-KhaireKhola, RSDPAF-W-SYPM-NCB- 45.62 82,097,222.18 54,925,635.41 55 52 On-going KhairiKhola-Kohalpur MWR-Nepalgunj-1B Borandandi-Attariya, Attariya- RSDPAF-W-SYPM-NCB- 14.33 21,472,426.82 15,525,786.50 100 100 On-going Godavari Bridge FWR-Mahendranagar-1A Syaule-Bhalumara, Syaule RSDPAF-W-SYPM-NCB- Bazar-Korayal, Silgadhi-Dist. 41.89 69,037,250.92 64,386,241.60 0 10 On-going FWR-Doti-1B Boarder Anarkholi-Khodpe, Khodpe- RSDPAF-W-SYPM-NCB- 30.41 39,509,426.14 35,072,341.99 0 10 On-going Patan FWR-Baitadi-1C RSDP Additional Financing (Third-year Periodic Maintenance) Mechi Highway (Ho7), Ranke- RSDPAF-W-TYPM-NCB- awarded on 18th June, Phidim Sector (Chainage 15.36 30,717,968.55 22,753,990.86 ER-Ilam-1A 2013 166+200 Km to 181+560 Km) Damak (MRM) – Beldangi RSDPAF-W-TYPM-NCB- awarded on 19th June, Fefugee Camp Road (Ch. 7.00 18,680,209.49 13,238,144.08 ER-Damak-1B 2013 0+000 Km to 7+000 Km) Mawa – Harichamode Road (Ch: 58+000 Km to 65+000 RSDPAF-W-TYPM-NCB- awarded on 30th June, Km) & Rani (IB) – 12.20 46,108,754.04 30,327,765.41 ER-Biratnagar-1C 2013 Kanchanbari Road (Ch. 0+000 Km to 5+200 Km) Mirchaiya – Kamala (H0119, Ch. 223+920 Km to 237+240 RSDPAF-W-TYPM-NCB- awarded on12th July, Km) and Chauharwa – Siraha 31.53 77,523,426.17 46,250,495.97 ER-Lahan-2A (Re) 2013 (F00501, Ch. 0+000 Km to 18+210 Km) Jyamire (District Border)- RSDPAF-W-TYPM-NCB- ( awarded on 18th Katari Road (F05202, Km 20.00 49,777,411.30 34,210,529.19 ER-Lahan-2B June, 2013) 7+000 to Km 27+000)

Annex P-16

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%)

Nagdhunga – Kalanki (Ring RSDPAF-W-TYPM-NCB- 4.50 31,679,337.97 31,679,337.97 Awarded Road) CR-Kathmandu-3A

Nagarjune - Thulo Khola, Halchow- Narayanthan Balaju Nepal Sangla Bazar RSDPAF-W-TYPM-NCB- 24.40 99,506,916.02 85,669,991.47 Awarded Jayanepal – Thapathali CR-Kathmandu-3B Kalimati – Sitapaila Jadibuti – Pepsikola – Manohara Thimi Bhaktapur –Army Camp Sinamangal – Manohara – Thimi – Sallaghari 45,248,212.03 RSDPAF-W-TYPM-NCB- Panchkhal –Palanchok 11.60 58,006,045.16 Awarded CR-Bhaktapur-5A Bhagawati Sallaghari – Hanumante Culvert Barabise – Kodari, Barabise – Kodary, RSDPAF-W-TYPM-NCB- 40.79 69,940,380.14 53,219,271.62 Awarded Dolalghat – Lamusangu - CR-Charikot-5B barasise Ramnagar – Mugling, RSDPAF-W-TYPM-NCB- Mawakhola – Mugling 35.16 81,778,094.86 Awarded CR-Bharatpur-6A Bharatpur – Meghauli Airport 63,760,520.91 Tadi – Gangate, Tadi – RSDPAF-W-TYPM-NCB- Labdhu – Samundratar - 11.00 17,591,605.26 16,739,006.75 Awarded CR-Nuwakot-6B Golphubhanjyang Jitpur- Pathlaiya, Bhimphedi – RSDPAF-W-TYPM-NCB- 21.80 40,415.198.10 Retendered Kulekhani CR-Hetauda-7A Bardibas – Jaleshwor, RSDPAF-W-TYPM-NCB- Dharapani – Dhanusadham – 9.00 19,476,143.60 Retendered CR-Janakpur-7B Janakpur

Annex P-17

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) Surajpura – Harpur Border, Butwal Municipality Boundary – Milanchok, Mahendra Park- RSDPAF-W-TYPM-NCB- Chidiya Khola, Bardaghat – 24.19 37,898,760.03 26,654,494.24 Awarded WR-Butwal-8A Sunwal Mahakhola – Sukoura, Sunwal - Mahakhola Gorusinghe – Patharkot, Angure Ghumti – Sandhakharkka RSDPAF-W-TYPM-NCB- 43.32 77,973,678.52 58,746,637.69 Retendered Thada Jukena- Angure WR-Shivapur-8B (Re) Ghumti, Thada Jukena- Angure Ghumti Damauli – Jyamiretar (Byass RSDPAF-W-TYPM-NCB- awarded on 14th July, Marg) (Ch. 0+000 Km to 8.73 17,400,000.00 12,029,306.56 WR-Damauli-9A 2013 8+730 Km) Syangja – Kuvinde Road (Ch. RSDPAF-W-TYPM-NCB- awarded on 14th July, 18.84 27,051,530.45 148+165 Km to 167+000 Km) WR-Pokhara-9B 41,195,951.76 2013 Harthok – Ridi Bridge (Ch. 15+480 Km to 35+660 Km) RSDPAF-W-TYPM-NCB- 102,499,356.7 52.98 74,816,593.19 awarded on 12th July , and Ridi Bridge – Ghumti (Ch. WR-Palpa-9C 0 2013 65+660 Km to 68+460 Km) RSDPAF-W-TYPM-NCB- Khairi Khola – Kohalpur 23.00 50,849,394.38 Retendered MWR-Nepalgunj-10A (Re) Mahakali Highway (H14) RSDPAF-W-TYPM-NCB- awarded on 12th July, Patan – Satbanjh (Ch. 16.59 28,850,426.09 FWR-Baitadi-11A 2013 184+170 Km to 200+760 Km) Mahakali Highway (Ch. 147+360 Km to 153+800 Km ); Seti Highway, Syaule – awarded on 16th July , RSDPAF-W-TYPM-NCB- Korayal (Ch. 12+000 Km to 45.93 95,459,387.71 2013 FWR-Doti-11B 25+000 Km) and Silgadhi – Sanfe Road, Silgadhi – Chaukhutte Bazar (Ch 14+510

Annex P-18

Road Name Contract No. Length Estimated Contract Physical Financial Status (km) cost (NPR) Amount Progress Progress (NPR) (%) (%) Km to 41+000Km ) & Chaukhutte Bazar – Sanfe (Ch. 41+000 Km to 51+000 Km) Mahendra Highway, Boradadi Sukhhad Choraha – Attariya (Ch. 957+400 Km to 967+500 RSDPAF-W-TYPM-NCB- awarded on 12th July, 44.18 57,294,499.16 Km) & Junga – Sukhad FWR-Mahendranagar-11C 2013 Choraha (Ch. 915+230 Km to 949+310 Km) Road Safety (Physical Works) Revised Contract Physical Financial Length Estimated cost Contract Road Name Contract No. amount after VO Progress Progress Comments (km) (m NPR) Amount (%) (%) Kath Valley (Pelican RS-NCB- - 8,787,346.94 8,781,550.92 9,734,869.15 100 100 Completed Signals) RTU-2 PRM/MN/KT ( Safety 3/RSDP/RTU 195 5,800,012.00 4,852,281.92 5,447,914.59 100 100 Completed Barrier) 10/11 PRM (Construction Of 4/RSDP/RTU 125 12,011,571.00 9,968,613.21 9,968,613.21 100 100 completed Bus Lay Bys) 10/11 Chabahil (Construction Of 5/RSDP/RTU - 3,108,590.00 1,798.136.57 1,798.136.57 100 100 Completed Bus Lay Bys) 10/11 ARM/KT/MN (Supply & 6/RSDP/RTU Installation of Traffic 196 1,051,435.00 739,409.85 739,409.85 100 100 Completed 10/11 Signs) Kathmandu Valley (Traffic 7/RSDP/RTU - 8,959,220.00 8,181,105.31 8,176,521.82 100 100 Completed Safety Works) 10/11 Kathmandu Valley(Traffic 8/RSDP/RTU _ 8,870,552.00 8,279,990.25 8,091,618.52 100 100 Completed Safety Works) 10/11 RS-NCB- Completed Road Safety Pilot Project 4 2,372,874,90.00 1,373,731.96 1,373,731.96 100 100 RTU-9 Footpath & Bus Lay Bys RS-NCB- Completed - 10,314,475.61 10,238,648.74 10,238,648.74 100 100 construction (PRM) at RTU-10

Annex P-19 dumre- Malekhu

Annex P-20

Annex 4 Summary Status of Institutional Strengthening and Policy Reform Component

There have been some improvements in the institutional strengthening activities. However, delays have been observed in the implementation of some many activities. The key activities and emerging issues for the units supported under the project are as follows: Mechanical Training Center (MTC): Hydraulic excavator has been delivered and the Letter of Credit has been closed. Two training courses on excavator operation has been already conducted to 11 nos. of trainees from DOR. The accessories for the Hydraulic Demo Bench are received. The bidding process for multi-meter has been cancelled as only one bid was received (also the bid price was substantially higher than the estimated price) and the bidder had not agreed to extend the bid validity period. After reviewing the requirements and market price MTC has prepared bid document for procurement of two Hydraulic Multi meters and associated training. Regarding the overdue business plan of MTC it is noted that there are several issues hindering the smooth running of the training courses such as; lack of trainers, space for field works, and limited training need of DOR personals. A question is also raised whether the MTC is needed for DOR or not. Considering the issue to be directly related with the overall DOR's policy on managing the heavy equipment and associated operators and mechanics it was agreed that the DOR especially, the Mechanical branch will come up with the holistic study requirements. Such holistic study can be lead either by the MB and or MTC which also to include business model for MTC, in future. Mechanical Branch (MB): MB has already procured five supervision and inspection vehicles (double-cabin Pick-ups) to be used by DOR project implementation units. Further, additional two supervision vehicles (one for GESU and one for PCU) have been procured recently. For supply of Bridge Inspection Vehicle procurement, contract agreement is signed on 3 July, 2013 with delivery period of 180 days after receipt of Letter of Credit. Letter of credit for the same is opened on 14 July, 2013. For the current year MB plans to make necessary budget provision for custom duties for Bridge inspection vehicle. Road and Traffic Unit (RTU): The Road Safety Action Plan has been approved by the Government. Until the Road Safety Council is formed, MOPIT will be acting as Road Safety Council and its Secretariat. In this financial year the Ministry has received a new budget line for road safety. The Team requested the Ministry to organize dissemination workshop to be attended by all stakeholders (including donors) to decide on the implementation strategy of the plan. Given that some accidents have occurred on project roads, DOR agreed to implement the road safety awareness training and to conduct road safety campaigns in the vicinity of the under construction roads. The targeted groups will include residents living along the road corridors, school children and vehicle drivers in all five road sections that are being upgraded. The Unit has prepared draft terms of reference and shared with the Bank. The unit has started assessment for need for road safety works in Prithiwi highway and Arniko highway. Further, in this financial year physical works on road safety is being planned (for about 48 million NPR) with 10% contribution from the Bank. Accordingly the annual program has been prepared and in process of approval from NPC.

Annex P-21

Central Road Laboratory (CRL): The CRL’s responsibilities include the preparation of quality monitoring plans, calibration of the lab equipment and to carry out quality audit for upgrading works. Division Road Offices and Regional Road Directorates are responsible for the quality assurance and control of periodic maintenance contracts. The CRL’s role is mainly to support the field Road Offices (Division and Regional Offices) in quality assurance and control activities. CRL is also carrying out quality monitoring and calibration of lab equipment from time to time, and training and on-the-job- training to DRO staff. CRL will continue to carry out specific tests which cannot be conducted in DRO laboratories. Considering the increased role of CRL in quality assurance and control CRL has prepared a Business Plan for period of 2012-2015. It is noted that DOR is in process of preparing overall policy on quality assurance and management in DOR. Considering increasing role in quality assurance, calibration, quality control tests and training but limited in-house manpower, CRL intends to hire consultants for implementing the quality audit of on-going road works. The proposed Universal Testing Machine (UTM) was not procured last year mainly due to the budget limitations. CRL is now preparing the bid documents for the UTL machine and thin film test machine which will facilitate to conduct the required tests for reinforcements used mainly in bridges and structures. Road Asset Management- Highway Management Information System (HMIS): The final report on defining a Highway Information Managements System, with final framework and action plan, is being endorsed from the Ministry. As per the report’s recommendation it has been agreed to develop a comprehensive policy for road data management in DOR. Estimate & TOR for engaging an individual consultant is in its final stage. Considering importance of basic road inventory data it was agreed to engage a consultant to do a sample road inventory (sample road from Birgunj- Hetauda- Narayanghat- Mugling- Kathmandu- Dhulikhel-Kodari includes Terai, rolling and mountainous sections) and also to develop a road data management system. Once the data management system is in place the unit will hire a separate consultant’s team to collect the overall road inventory. To assure the road inventory data quality it is agreed that the first consultant developing and managing the data system will also be supervising the data collection and data management process. The Unit is in process of preparing a draft TOR for sample inventory and developing data management system. Team requested to share the TOR and also keep these activities in the updated procurement plan. Necessary EOI notice is expected to be published in September, 2013. As the latest Priority Investment Plan (PIP 2007-16) was prepared in 2007 and there has been a substantial amount of investments during this 6 years period the DOR has initiated a mid-term review of PIP. It is to assess the effectiveness of the investments made in the said period and also provide necessary priority investment plan for the next remaining period. DOR has formed a working committee headed by the DDG, Planning and Design Branch, to steer the review process. Potential consultants are already shortlisted and RFP is issued. The deadline for the submission of proposals is 4th September, 2013. The contract is expected to be completed by November, 2013 Geo- Environmental and Social Development Unit (GESU): Consultants (social and environmental) have already been appointed. Social assistants have been helping the unit with the monitoring and evaluation activities. Considering the increasing workload and potential important roles the unit will play in the implementation of Bridges Improvement and Maintenance Program (BIMP) the unit has prepared a business plan with help of a consultant. The business plan takes into account all the activities that the unit will have to carry out in order to fulfill its obligations (for both government and donor funded projects) and

Annex P-22 the necessary resources (including resources for capacity and human resources development) that will be required to perform its roles and responsibility. Recently, the project has provided one supervision vehicle to carryout field monitoring, more effectively. GESU has continued to conduct regular compliance monitoring and preparedness check for the upgrading road contracts. Recently such compliance monitoring was conducted in SM & CJ road in June, 2013. Independent monitors have been hired and reports from them are disclosed at DOR websites as well as shared with the Bank. The NGO working on the HIV/AIDS awareness program has completed awareness program in three roads (G-T-D, K-C, and K-M-J) including one central and two regional level workshops. To accommodate the bridge works under the ESMF the revised version in English and Nepali including with the addendum has been printed and distributed in various offices and road projects in DOR. From the budget received from the project the unit plans to conduct monitoring activities and various training on land acquisition and slope management. The Team suggested to finalize such activities list and include in the procurement plan. Road Sector Skill Development Unit (RSSDU) - Human Resource Development: DOR has made the RSSDU as focal point for conducting all the trainings under DOR either funded by the Government or projects. Under various headings a number of local trainings have been organized by the RSSDU including :a) a comprehensive 30 day training program under Staff college b) Procurement of Consulting Services: c) Bid Evaluation Process in WB funded projects and d) Bridge design RSSDU has a business plan prepared for 2012 to 2015 period. As per the plan the unit propose to organize a number of training focusing on different areas including road safety and road safety audit, highway management/road asset management, procurement management, contract administration, quality control and testing procedure, performance-based maintenance, road maintenance management, Public-Private Partnership in the road sector, claim and disputes and arbitration, project management, bridge design and analysis. For the next financial year the unit plans to use the project budget of about 6 million NRS for various training activities. Considering need for developing some in house road safety auditors the RSSDU together with the help from RTU will explore available opportunities for such training. In case of trainings needed in outside of the country the Team emphasized that the proposal for foreign training will be considered on a case-by-case basis only. Staff to be sent for foreign training only if the following criteria are fulfilled: (i) no such training is available locally; (ii) such training is linked to DOR’s strategic objectives; (iii) the training is relevant to the staff’s current or potential responsibilities; (iv) staff at different levels gets appropriate opportunities; (v) funds are available for such training; (vi) the post-training outcomes could be specifically defined before the training and have been followed through. IT and MIS Development: A Management Consultant for MIS-IT and an IT Manager (consultant) have been continuing to support the unit. They are being supported by RSDP given important roles they play. The development of Financial Management Information System (FMIS) and the training on its application are now complete. The application is being used by the DOR Headquarters and other cost-centers to record all the financial transactions. Based on the experience gained during its implementation some additional improvements of the system also being worked out and system updating is being planned. Though Contract Monitoring System (CMS) development has been

Annex P-23 finalized, launched, and a total of forty-two engineers have been trained from RSDP and BIMP the required data still needs to be fed/updated in the system due to some features to be modified in the BOQ format. It was agreed to modify the BOQ format to be able to include additional new items, if any and complete the CMS data for RSDP and Bridges (BIMP) within end of November, 2013. It is noted that the improvement works contract linked to the e-bidding system and its security has yet to be finalized. The unit agreed to review the overall progress with the consultant's team, decide on the pending issues, and complete the improvement works by December, 2013. Roads Board Nepal (RBN): RBN has developed a five-year business plan (2012-2017) and presented to RBN board for approval. It is noted that the business plan is being still being reviewed by a committee formed by the Board and yet to be approved. Like previous years RBN is continuing to help the DOR in the preparation of ARMP and to develop a web based ARMP database with the integration to spatial data (GIS maps). This system has helped the DOR especially, the DROs having access to road data and achieving a consistency and reliability of the planning. For the same purpose the RBN plans to continue the support for the road condition survey. Road Users Satisfaction Survey II (RUSS II) has been completed and the report has been finalized. For dissemination of outcome of this study, mainly about the road user’s expectation and satisfaction, the RBN agreed to conduct an workshop inviting all the related stakeholders. Also, the report will be made available in the DOR/ RBN websites. For this FY 2013/14 the RBN has received total 4,000 million NRs from the government. Besides the amount required for administration (16.2 millions) the amount available is proposed to be allocated for Routine and Recurrent, periodic maintenance, rehabilitation , specific/ emergency maintenance , and road safety. On the basis of IRAMP of DOR the identified 550 km of roads will be considered for the periodic maintenance. Considering the increasing amount of periodic maintenance and rehabilitation budget and also no use of Bank fund (10% through RSDP) for works planned from FY 2013/14 onwards the RBN agreed to start regular monitoring. Despite of repeated follow-up by RBN on the final report on Chart of Accounts the consultants have failed to finalize some parts related to assessment of necessary hardware and draft TOR preparation for the software development. As per the consultant the delay was mainly due change of their IT personal working in the project. The consultant agreed to engage equally competent person and finalize the report within mid of November, 2013. Once the report is finalized the RBN, with approval from board, will look forward to implement the Charts of account system. National Vigilance Center (NVC): NVC has been carrying out technical audit of RSDP road works contracts. In the last financial year, NVC conducted technical audit for 11 sub-projects from the project consisting of 2 upgrading and 9 periodic maintenance works. Each technical audit report findings were presented and discussed with the responsible project team and related stakeholders. As in the past NVC has shared with the Bank the summary of technical audit findings including NCR and it's status. It is also noted that during the first trimester period the NVC is planning to follow-up the status of NCRs. Besides the technical audits of the sub projects, a training to develop new technical auditors were conducted during March/ April, 2013 where 23 participants took part and become technical auditors. As of now NVC has already trained 212 national professional persons to become Technical auditor. However, due to various reasons only 60 Technical auditors have been found

Annex P-24 active in the field. Two workshops were conducted on technical audit and its objectives one at Biratnagar and one at Dang. In total more than 115 participants participated and discussed in several aspects of technical audit including provided feedback from their perspectives. In the next financial year too, the NVC is planning to conduct one more training to develop additional Technical auditors For the current financial year, besides the regular budget of NVC, the project has allocated an amount of 2.1 million budget to NVC for necessary technical audits of project works. The annual work program including the list of sub projects shall be selected and finalized by NVC based on the total list of sub-projects to be provided by the project.

Annex P-25

Annex 5 Status of Actions Agreed During February, 2012 Implementation Review

Issues Responsibility Deadline Status A. Road Development Component i. Award the 2 contract for upgrading the remaining unsealed length DOR/IDA End-March, 2013 Awarded on 2nd June, (about 30 km) in Surkhet road 2013 ii. Review of delayed contracts in upgrading works and steps for DOR/ Supervision consultant Mid-March, 2013 Fortnightly Progress non performing contracts as per contract conditions review started from July, 2013 iii. Review of delayed periodic maintenance contracts and steps for DRO/RD/DOR Mid-March, 2013 To be started non performing contracts as per contract conditions. iv. Road safety awareness training and campaign in all five upgrading DOR End May, 2013 Re-scheduled for roads September, 2013, v. Award all periodic maintenance contracts for FY 2012/13 DOR End of April, 2013 18 contracts awarded till Mid July, 4 retendered vi. Report on the progress and quality assurance aspects of PM DOR End- March, 2013 and Received in May, 2013 contracts every two months after vii. Workshop on technical, quality, and contract management aspects DOR During regional Conducted in parts of periodic maintenance works among Regional and Divisional ARMP workshop offices

Annex P-26

B. Institutional Development and Capacity Building Component i. Complete the e-bidding improvement activities DOR Mid April, 2013 Not complied ii. Short list the consultants for review of PIP 2007 DOR Mid April,2013 Shortlisted and RFP issued in July, 2013 iii. Develop a policy on road data management DOR/HMIS End March, 2013 Not complied. OR preparation in process iv. Finalize the TOR and start the EOI for short listing DOR/HMIS End March, 2013 Not complied. TOR for consulting services for the road inventory works preparation in process. Awarded on 3 July, 2013 v. Award for Bridge inspection vehicle completed DOR/MB End May, 2013 Awarded on 3 July,2013 vi. Finalize the contract for Charts of Account study RBN/DOR Mid April, 2013 Not complied vii. Preparation bid documents for Procurement of two DOR Mid-March, Complied. Vehicles supervision vehicles for PCT and GESU 2013 procured C. Safeguards

a. Social Safeguard i. Revision of Nepali version of ESMF GESU/DOR End March, 2013 Complied. Revised and added in addendum. ii. Preparation of supplementary RAP for additional GESU/PIC/Consultant End of April, Complied. Draft report R&R assistances for those losing land 2013 for GD, SM and KMJ prepared iii. Verification of affected trees for rest of the three GESU/PIC/ Consultant Mid April, 2013 Complied road corridors iv. Share the report of independent monitor with the GESU/RSDP End of Feb, 2013 Complied. Published in Bank DOR website v. Compensation for land and structures to be GESU/PIC/Consultant/DOR End of April, Complied. Work in disbursed for GD and KC roads 2013 progress. Land: Over 90% both GD and KC. Structures: 100% GD, 11% for KC (paid for str. Within the formation width).

Annex P-27

vi. Disbursement of R&R assistance and support GESU/PIC/DOR End of May, Partially Complied. allowances to all remaining PAPs 2013 Progress in GD, KC, SM road. No progress in KMJ and CJ vii. Disbursement of revised Nepali translation of GESU/DOR/PIC Mid April, 2013 Complied. Printed ESMF in all the project roads copies of addendum/ESMF distributed in all project roads. viii. Disbursement of compensation and transfer of GESU/PIC/DOR End of April, Complied. land ownership of plots where civil works have 2013 started ix. Disbursement of compensation for affected trees GESU/DOR/PIC/consultant End of April, Partially Complied. of KC and GD roads 2013 100% in GD and 68% in KC x. Complete the verification of complaints in Rukum RSDP/Consultant/GESU Mid April, 2013 Partially Complied. district 80% of the cases resolved and paid compensation xi. Recruitment of Social Mobilizer for CJ road DOR/PIC/Consultant/GESU 5 March, 2013 Complied. xii. Preparation of VCDP for KMJ, SM and KC road PIC/Consultant/GESU Mid May, 2013 Delayed. Draft report ready. b. Environmental Safeguard i. Final SS-EMAPs of C-J (remaining part), K-M-J Supervision consultant (follow up by GESU and Feb., 2013 Complied (KM and MJ Sections), S-M Roads PIC) ii. Consultation on the draft format/table of content GESU/PCT May, 2013 Complied of SS-EMAP and its finalization iii. Next round of Compliance check in G-T-D and K- GESU/PCT G-T-D and K-C Partially complied. SM C, C-J Roads, and preparedness check in K-M-J, by April, 2013, and CJ completed. C-J and S-M Roads K-M-J,C-J and GTD and KC will be S-M by June, completed by mid- 2013 September. iv. Increased monitoring of periodic maintenance GESU/PCT Continuous Continued and road safety works as well as screening of road safety works

Annex P-28

v. Orient labor-gang leaders, machine operators Contractor with support from supervision Continuous Continued and site supervisors on environmental and consultants and GESU (Project to instruct the social practices contractor) vi. Meeting to discuss findings and GESU & PCT Immediately Complied recommendations of each field after each field visit/compliance or preparedness checks visit vii. Site Specific plan for each quarry and spoil Each Contractor( to be approved by the Mid March,2013 Complied disposal site, Supervision consultant) And crusher plant site in C-J, K-M-J,and S-M roads viii. Site Specific Plan for Bioengineering works in Supervision Consultant February. 2013 Partially complied, G- G-T-D, K-C, K-M-J, C-J, S-M Roads for G-T-D,K-C T-D, K-C and C-J and and C-J(5A,5B SM road is complete. contracts) K-M-J road will be completed by December, 2013 ix. Monitoring of workers health & safety use and Supervision consultant/ Team at site September, 2013 Continued provision of sanitation facilities at sites for S-M, K-M-J and C-J remaining. regular x. Site specific matrix for each contract for Supervision consultant End of June Partially complied monitoring environmental aspects ,2013 xi. Monitoring and follow up to ensure that site plans PCT in cooperation with GESU Continuous, Continued (bio-engineering, quarry, crusher, waste disposal, monthly review drain outlet) for each contract package are timely prepared and approved, and also occupation health & safety is enforced.

Annex P-29

D. Procurement i. Update/Revise the Procurement Plan for FY 2012/13 DOR/IDA End-February, Approved in July, and approval 2013 2013

E. Financial Management i. First Trimester report for FY 2012/2013 DOR asap Approved in May, 2013 ii. Second Trimester report for FY 2012/13 DOR End April,2013 Approved in June, 2013 iii. Un-audited account for FY 2011/12 DOR asap Submitted iv. Audited account for FY 2011/12 DOR asap submitted

F. GAAP & Peace Filter i. A separate Action Plan prepared and attached in DOR See Annex 10 Annex 10.

G. Others

Annex P-30

Annex 6

Actions Agreed During August-September, 2013 Implementation Review

Issues Responsibility Deadline Comments A. Road Development Component i. A general flood damage report for project roads DOR/Consultants End-September, 2013 ii. Finalize detail designs for the restoration of flood damages DOR/ Consultant End November , 2013 iii. Prepare and finalize the revised resource based work schedule DOR/ Consultant End of September, 2013 for all upgrading works contracts iv. Review of delayed contracts in upgrading works and actions for DOR/ Consultant Continuously non performing contracts as per contract conditions v. Review of delayed periodic maintenance contract and actions for DRO/RD/DOR End of September and the non performing contracts as per contract conditions continuously vi. Consultants procured for implementing Road safety awareness DOR End November , 2013 training and campaign in all five upgrading roads. vii. Assess and repair the ferry at Veri river (Jajarkot road) DOR/ Consultants End October, 2013 viii. Complete the road safety audit of project roads DOR/ consultants End December, 2013 ix. Conduct assessment of the road sections from Kathmandu to DOR End of November, 2013 Muglinin view of improving it to AH standard sections

Annex P-31

B. Institutional Development and Capacity Building Component i. Complete the e-bidding improvement activities DOR End December , 2013 Actions repeated ii. Consultants selected for review of PIP 2007 DOR End November,2013 iii. Develop a policy on road data management DOR/HMIS End November , 2013 iv. Finalization of TOR and EOI published for consulting services for DOR/HMIS End September , 2013 development of road data management system for road inventory works v. Finalize the contract for Charts of Account study RBN/DOR Mid November , 2013 vi. NVC to finalize the list of sub-projects for technical audit NVC Mid October, 2013 vii. Dissemination of Road User’s satisfaction survey report in DOR DOR/RBN End September, 2013 and RBN websites viii. Dissemination workshop on RUSS findings inviting all the related RBN End November 2013 stakeholders. C. Safeguards a. Social Safeguard i. Finalization and implementation of supplementary RAP for additional GESU/PIC/Consultant September, 30, 2013 R&R assistances for those losing land ii. Compensation for land and structures to be disbursed for GD and PIC /DOR September, 30, 2013 KC roads iii. Disbursement of R&R assistance and support allowances to all PIC /DOR November, 30, 2013 remaining PAPs iv. Disbursement of compensation and transfer of land ownership of PIC /DOR October, 31, 2013 plots where civil works have started v. Disbursement of compensation for affected trees of in all four roads PIC /DOR September, 30, 2013 vi. Complete the verification of complaints in Rukum district GESU/PIC/Consultant vii. Finalization and implementation of VCDP for KMJ, SM and KC GESU/PIC/Consultant September, 30, 2013 road

Annex P-32 viii Disbursement of R&R Assistances for temporary structures in KC PIC /DOR October, 31, 2013 and SM road b. Environmental Safeguard

i. Next round of Compliance check in G-T-D and K-C Roads GESU/PCT by mid-September , 2013 ii. Compliance Check for SM, CJ and KMJ road GESU/PCT by end November 2013 iii Increased monitoring of periodic maintenance and road safety works as GESU/PCT Continuous well as screening of road safety works iv Orient labor-gang leaders, machine operators and site supervisors on Contractor with support from Continuous environmental and social practices supervision consultants and GESU (Project to instruct the contractor) v Meeting to discuss findings and recommendations of each field GESU & PCT Immediately after each visit/compliance or preparedness checks field visit vi Site Specific Plan for Bioengineering works in K-M-J Road Supervision consultant End December, 2013 vii Monitoring of workers health & safety use and provision of sanitation Supervision consultant/ Regular facilities at sites Team at site viii Monitoring and follow up to ensure that site plans (bio-engineering, PCT in cooperation with Continuous, monthly quarry, crusher, waste disposal, drain outlet) for each contract package GESU review are timely prepared and approved, and also occupation health & safety is enforced. ix Action plan will be prepared from the recommendations of first Supervision consultant End October, 2013 external monitoring and the corrective actions that are within the current contract will be implemented x Next External Monitoring GESU/ Independent End April, 2014 consultant xi Site plan for emergency track (alternative routes) opened due to Supervision consultant Mid Jan, 2014 landslides

Annex P-33

D. Procurement

i. Update/Revise the Procurement Plan for FY 2013/14 and approval DOR/IDA end-September , 2013 E. Financial Management

i. Third Trimester report for FY 2012/2013 DOR End August, 2013 ii. Un-audited account for FY 2012/13 DOR Mid October, 2013 iii. Audited account for FY 2012/13 DOR Mid-January, 2014 F. GAAP & Peace Filter

i. A separate Action Plan prepared and attached in Annex 10. DOR See Annex 10 G. Others

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Annex7 Summary Findings on Safeguards

Impact and Progress Project activities will impact a total of 3333 households, 5517 land plots and 361 structures (see table 7.1). The number of impacted households, structures and plots has increased significantly. Though significant progress has been made in disbursement of compensation in GD and KC road, the process is extremely slow in KMJ and SM road. The Team was informed that there was no CDO in KMJ road for long and therefore the delay. New CDO has joined very recently and process will start in the first week of September, 2013 (see table 7.2 below) Table 7.1: Distribution of Impact across the project roads Name of the Losses as per RAP Losses post Verification Road Households Plots Structures Trees Households Plots Structures Trees Gokuleshwor- 244 372 12 2063 276 441 30 1,227 Darchula (GD) road Khodpe- 624 1,220 19 499 624 1,220 2 499 Chainpur (KC) road Khidkijula- 764 1,214 45 206 840 1,386 80 206 Manma-Jumla (KMJ) road Chinchu- 26 30 4 0 26 30 4 0 Jajarkot (CJ) road Sitalpati- 1412 2,088 152 435 1,567 2,440 228 200 Musikot (SM) road Total 3,070 4,924 232 3,203 3,333 5,517 361 2,132 Table 7.2: Progress made in disbursement of compensation

Progress in Compensation Payment ( as of 20th August, 2013)

Land Structure Tree/ Crops

Trees S Progres Struct Progress / Progre

N HHs Plots NRs s% ures NRs. % crops NRs. ss % Name of Road Name 1 GD 263 406 47816137 92 30 6012692 100 1227 521400 100 2 KC 613 1174 52393449 96 2 404480 11 337 190100 68 KM 3 J 711 1175 124076778 85 72 7351267 90 206 0 0 4 CJ 26 30 3729600 100 4 1652188 100 NA NA NA 5 SM 1172 1711 90168790 70 146 12514443 64 200 0 0 Total: 2785 4496 318184754 81 254 27935070 70 1564 711500 73 The review noted some progress in disbursement of Resettlement & Rehabilitation (R&R) and Support Allowance to vulnerable groups (see table 7.3). The Team, however, noted with concern that disbursement of resettlement and rehabilitation assistance and support allowance is yet to

Annex P-35 start in KMJ and CJ road. So far only 40% of the identified eligible households have received R&R assistance. Only 41% of the total eligible households have received Support Allowance. The review was informed that one of the main reasons for the slow rate of disbursement is the budget constraint and absence of Chief District Officer (CDO) /acting CDO in the district in KMJ road. In CJ road the Team was informed that although the PAFs have already been compensated for the structural loss, they have not fully shifted/dismantled the structures as the civil works have not started in those areas. Thus PIC intends to provide assistance to PAFs only after they shift their structures completely. Table 7.3: Status of distribution of Resettlement and Rehabilitation Assistance and Support Allowance R&R Assistance Support Allowance HHs Total HHs SN Sub-projects Total Amount Amount Paid % HHs Paid % HHs Paid (Rs) Paid (Rs) (No.) (No.) Gokuleshwor- 30 435,000 100 9 54 50,000 56 1 Darchula 30

Kalangagad- 5 1 20,000 5 58 58 580,000 100 2 Chainpur 19

Khidkijula- 6 0 0 0 94 0 0 0 3 Manma- Jumla 80 Chinchu-Jajarkot 0 0 0 9 0 0 0 4 47 Sitalpati-Musikot 93 635,000 53 219 98 490,000 45 5 1778 Total 310 124 1,090,000 40 389 161 1,120,000 41

Source: GESU, August, 2013 The progress of deed transfer is also slow in GD road and SM road. The Team was informed that slow progress is due to insufficient manpower and lack of co-operation from the District Land Revenue Office (DLRO) and District Land Survey Office (DLSO). The issue has been raised to the office of Chief District Officer (CDO) by Project In-Charge.

4 Out of total 9 families entitled for support allowance, 4families have moved out of the corridor and are untraceable. 5 During RAP preparation 19 structures were identified within the ROW. However, during implementation PCU dismantled only two structures that were within the corridor of impact. The rest 17 structures will not be impacted under the project. The R&R assistance has been paid to one structure owner, where as other structure owner is yet to be paid. 6 For the last several months, there is no CDO posted in Jumla and hence PCU could not disburse the R&R assistance and support allowance. A new CDO has been posted very recently and PCU has briefed the CDO about the R&R process. The disbursement will be initiated in the first week of September, 2013. 7 The four structure owners were compensated for their structure and they were supposed to move out of the ROW. These structure owners though demolished their structure from the current location but did not move out of ROW. PCU raised the issue with CDO and is holding back their R&R assistance. 8 The R&R assistance has been paid only to permanent structure owners. PCU has to disburse R&R assistances and support allowance to all relocated structure owners.

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Table 7.4: Progress made in deed transfers Deed Transfer (No of Deed Transfer Progress Name of Road Plot) % 1 Gokuleshwor-Darchula 219 50 2 Kalangagad- Chainpur 1174 96 3 Khidkijula- Manma- Jumla 1175 85 4 Chinchu-Jajarkot 30 100 5 Sitalpati-Musikot 661 27 Total: 3259 3259 It was reported that the Supplementary RAP (GD, SM and KMJ) for land losing PAPs as assistance and VCDP (For KMJ, SM and KC), as agreed during the last review, has been prepared. The reports will be shared with the Bank Team. GESU has assured that once the report is finalized and approved disbursement will be completed by end of September, 2013. Public Consultation and Disclosure: GESU has translated ESMF Brochure in Nepali and has been uploaded on DOR’s websites. A total of 100 hard copies of the translated ESMF summary have been distributed to the contractors and community in all the five roads. As agreed in the last review, the GESU has revised the translated version and photocopy of the revised entitlement matrix has been distributed to the project areas. The revised version has also been put in the addendum of the ESMF. 100 Printed copies of the addendum have been distributed to all project offices, division road offices and other DOR project offices. Local Consultative Forums and Grievance Redress: The project/ESMF has provisions for public participation and consultation through formation of Local Consultative Forums (LCFs). LCFs have been formed in all the roads. In all there are 29 LCFs in five project roads and so far there have been 52 meetings. Table 7.3: Status of LCF in RSDP/AF

Project Roads Number of LCFs Total meetings so far 1 Gokuleshwor-Darchula 3 9 2 Kalangagad- Chainpur 8 22 3 Khidkijula- Manma- Jumla 5 9 4 Chinchu-Jajarkot 2 2 5 Sitalpati-Musikot 10 10 Total 28 52 It was agreed that for the roads that will be taken over by the project, social mobilizer along with the project staff will conduct a stakeholder meeting with the LCF representative to inform them about the closure of project. The review noted a large number of grievances received by the projects in four project corridors namely GD, KC, SM and KMJ are mostly related to compensation rates and re- measurement/verification of affected assets. Project Roads Number of Grievances registered 1 Gokuleshwor-Darchula 314 2 Kalangagad- Chainpur 500

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3 Khidkijula- Manma- Jumla 700 4 Chinchu-Jajarkot 2 5 Sitalpati-Musikot 1600 Total 3116 Most of the grievances have been collected by LCFs and Social Mobilizers. So far, in CJ road only two grievances have been reported. The largest number of grievances was recorded in SM road. Out of 1600 complaints, 1100 were regarding missing land plots. All the complaints have been verified and 80% of the complaints were found to be repetition of same cases. 80% of the total complaints found to be true have been compensated for their loss. Remaining cases will be verified by mid-September, 2013. External Monitoring: An Independent Monitor was hired for external monitoring of the social safeguard implementation in RSDP/AF projects. The external monitor has already submitted the reports. The reports have been published in the DOR website. HIV/AIDs awareness program: The NGO hired for HIV/AIDS awareness program has carried out first round HIV/AIDs awareness program in all five roads under RSDP/AF. Second round of awareness program has been completed in three of the five roads (GD, KC and KMJ). They have also conducted one central level and two regional level workshops. Altogether 2654 person have participated in the awareness program organized by the NGO. The NGO has submitted 4th trimester report. 2.0 Environmental Safeguard Site-Specific Environmental Management Action Plan (SS-EMAP). Site-specific Environmental Management Action Plan (SS-EMAP) is a living document. As agreed during previous review, the Supervision Consultant has further improved the SS-EMAPs of Gokuleshwor-Thakthali- Darchula (G-T-D) and Kalangagad Bridge-Chainpur (K-C), and implementation of the same have been followed up with RE, ARE and Contractors at site.. SS-EMAPs of the Chinchu-Jajarkot (C- J: contract 5A, 5B), remaining contract packages of C-J, as well as SS-EMAPs of Khidkijyula- Manma-Jumla (K-M-J: K-M and M-J Sections), and S-M has been completed. According to GESU, these SS-EMAPs have been reviewed and approved by GESU. The SS-EMAPs have been given to the respective roads RA, ARE and contractor. Various sections of roads, including several stretches of GTD Road, package C of KC Road and C-J Road have been damaged by heavy rains during recent monsoon. Additional environmental mitigation measures may be necessary in the rain damaged sections of roads: this will be reviewed jointly by GESU and Supervision Consultant, and will be confirmed by next GESU monitoring (September 15, 2013). As agreed during previous review, GESU has finalized format/table of content of SS-EMAP, after discussion with various users and with stakeholders. GESU intends to mainstream this in all other projects within DOR: this will be discussed within DOR Management. Environmental Monitoring Supervision Consultant. Environmental Specialist of Supervision Consultant regularly makes site visit and discuss/ follow up implementation of environmental mitigations. In each road, such visit is carried out approximately once in 1.5 months and also when there is a need. During such visit implementation status of mitigation measures and/or any issue is discussed with contractor, RE and ARE. Current status of tipping, quarrying, crusher plant and camps are summarized below.

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Road Tipping site Quarrying site Crusher plant camp GTD Road 14 sites identified 11 sites identified for 3 sites identified First-aid and for restoration, restoration, work in for restoration, safety equipment bioengineering progress. work in progress, are not adequate works on going. and in 1 site in most camps. Crusher Plant in operation. KC Road 7 sites restored; 7 sites restoration to 2 sites restored, First-aid and restoration works be done (contractor and plant is in safety equipment ongoing in 6 sites has been instructed); 2 operation in 1 are inadequate in in package 3C, sites in package 3B site most camps. and 1 site has been restored. restored SM Road Restoration on 10 sites are in use at Plant in First-aid and going in 6 sites. present. Contractor operation in 4 safety equipment has been asked to sites. are in adequate restore the site in in most camps. package 4C. CJ Road 1 site (package Restoration in 5 sites 5A restored, 5B First-aid and 5A) has been in packages 5A, and and 5D safety equipment restored. 5B outstanding. restoration in in most camp Contractors have Quarrying activities at progress, and 5C inadequate. been instructed to chainage 28+900 was plant in restore 7 sites in observed. 2 sites in 5c operation. 5B, 5C, 5D and 5D are in use. packages. KMJ Road 5 sites in package 14 sites identified, but 8 plants (1 plant First-aid and 6C and 6D not in use yet. 1 site in each in 6A, 6B, safety equipment restored. 3 sites package 6C in 6C, 6D 7A, 7B, in most camp in 6B, 1 in 7A, 4 operation. 7C, 7D) are in inadequate. in 7B, 1 in 7C, operation. and 4 in 7D in operation. 1 site in package 6A not in use. Quarrying was still observed by the Bank Team at chainage 28+900 of CJ (package 5A) which was already restored. The landowner is using the quarry site for business purposes. The contractor informed the Bank Team that he has been making an effort to stop these activities. The Team recommended to close the quarry area as continuous and excessive quarrying would lead to landslides. This would hamper the road and the consequences need to be borne by the contractor and the landowner. Monitoring by GESU. Fourth compliance check by GESU in GTD and KC Roads are overdue now (although it was planned for April, 2013, this has not been done). GESU carried out second compliance check in SM and CJ Roads in June, 2013. No compliance check has been carried out in KMJ yet. GESU plans to carry out the compliance check in GTD and KC Roads by September 15, 2013, and compliance check in SM, CJ and KMJ Roads by November, 2013.

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Supervision Consultant’s site visit and GESU compliance check noted few concerns: such as quarry site in SM Road’s package 5C is at risky place and has not been approved. Contractor has been instructed to stop quarrying from this site, protect and restore the site. The houses around crusher plant of SM Road package 4B, in which concern was raised in the previous mission, have been rented by the contractor for storing materials. External Monitoring. External monitoring has been carried out for GTD, KC, SM, CJ and KMJ Roads. The external monitoring report identifies specific issues and recommends respective corrective actions. It was agreed that GESU with support from Supervision Consultant will prepare a plan for implementation of external monitoring recommendations: recommended corrective actions that are within current contract will be identified and implemented, and GESU will prepare, by October, 2013, an action plan with cost for corrective actions that are not-covered under current contract. Next external monitoring will be carried out by April, 2014. Site Plans. As agreed in the previous mission, site plans for waste disposal, quarry site, crusher plant, camp site etc are generally prepared in CJ, KMJ and SM Roads. This has been confirmed by GESU. However, there is no record of the site plans with GESU. It was agreed that GESU will maintain record of all site plans, and ensure that supervision consultant approves each site plan. It was also informed that about 40% of earthwork payment to contractors is kept on hold until satisfactory implementation of site plans and mitigation measures is confirmed by field verification. Bioengineering. DOR has hired Bio-engineering Specialists who have visited four roads (GTD, KC, CJ and SM, except KMJ) and prepared bio-engineering plans for the visited roads. Bio- engineering plans are being implemented in all contract packages of GTD Road, in package 3B of KC Road, and just initiated in package 3C of KC Road. Bioengineering work in package 3A is completed. Some bioengineering works in KC road have been damaged by the rain and landslides: contractor have been asked to fix this. Contractor has almost completed bioengineering works in package 5A of CJ Road, bioengineering works are likely start shortly in 5B, 5C and 5D packages of CJ Road. This year, bio-engineering works may also be implemented in SM Roads Contract Package 4B. Bio-engineering works in SM road’s contract package A, C and D; and KMJ roads will be implemented in next season only (2014). KMJ’s bio-engineering plan has not been prepared yet: this will be prepared by December, 2013. Compensatory Plantation. GESU and Supervision Consultant confirmed that there was no tree cutting from the community or state forest or religious or natural forest. Compensation is paid for any tree cut from private land. Hence, there was no need for compensatory plantation. Coordination Meeting. Coordination among GESU, DOR, RSDP team and site team including supervision consultant have improved and needs to be continued. During each site visit, GESU discusses the issues observed with contractor, supervision consultant and RE/ARE. After each site visit, GESU observation is also discussed with PIC and DDG at centre. Minutes of these meetings are kept. Supervision consultant also makes follow up site visit and discuss each issue with respective contractor and RE/ARE at site. This resulted more attention in environmental issues by contractor and project staff, and improved environmental management at site. This will continue. Field visit during the review and monitoring by GESU has indicated that there has been some progress in the field level environmental management from the last mission. As a good practice it was observed that spoil are being disposed at designated sites. The quarry site in KMJ close to the settlement has now been closed and new quarry site has been identified.

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Periodic Maintenance and Road Safety Works. There has been some improvement in the provision and use of occupational health & safety as well as sanitation facilities, and housekeeping at site. The Supervision Consultant, Environmental Specialist, ARE and GESU team informed that efforts are being made to enforce the contractors to provide health and safety gears to the labourers. It was observed during the field visit that some of the labourers were wearing hard hats. RSDP funds roads safety works – these are identified as environmentally less risky and are not subjected to formal environmental assessment except screening. However, it was noted in this review as well (as was in the previous reviews) that road safety works are not even being screened. The review agreed again that the GD and KC road will be screened for road safety when GESU team will be at the site for compliance monitoring in mid-September, 2013 while CJ, SM road will be screened in January, 2014. Training and Orientations. GESU, during the preparedness and compliance checks organized orientations to the stakeholders. The GESU and Environmental Specialist at the site informed that recently the contractors have initiated giving awareness programs on the use of safety gears and safety rules, and about health and sanitation to its staff, machine operators and labor group leaders.

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Annex 8 Status of Procurement and Financial Management

Procurement The following tables summarize the contracts procured within the review period.

Upgrading works contracts awarded under RSDP-AF

Contract ID/ all ICB Road Name Procurement status method Surkhet – KalikotManma Road RSDPAF-W-UP-ICB-SKM- 1 &Tallodungeshwor – Siyakot – Dailekh 8A (Re) Contract Awarded in June, Road RSDPAF-W-UP-ICB-TSD- 2013 8B (Re)

Contract No./ all NCB Road Name Procurement Status method

RSDP Additional Financing SYPM Mechi Highway (Ho7), Ranke-Phidim RSDPAF-W-TYPM-NCB- awarded on 18th June, 2013 Sector ER-Ilam-1A RSDPAF-W-TYPM-NCB- Damak (MRM) – Beldangi Fefugee Camp awarded on 19th June, 2013 ER-Damak-1B Mawa – Harichamode & Rani (IB) – RSDPAF-W-TYPM-NCB- awarded on 30th June, 2013 Kanchanbari Road ER-Biratnagar-1C Mirchaiya – Kamala and Chauharwa – RSDPAF-W-TYPM-NCB- awarded on12th July, 2013 Siraha ER-Lahan-2A (Re) RSDPAF-W-TYPM-NCB- Jyamire (District Border)- Katari Road awarded on 18th June, 2013 ER-Lahan-2B RSDPAF-W-TYPM-NCB- Nagdhunga – Kalanki (Ring Road) Awarded CR-Kathmandu-3A Nagarjune - Thulo Khola, Halchow- Narayanthan Balaju Nepal Sangla Bazar Jayanepal – RSDPAF-W-TYPM-NCB- Awarded Thapathali CR-Kathmandu-3B Kalimati – Sitapaila Jadibuti – Pepsikola – Manohara Thimi Bhaktapur –Army Camp Sinamangal – Manohara – Thimi – RSDPAF-W-TYPM-NCB- Sallaghari Awarded CR-Bhaktapur-5A Panchkhal –Palanchok Bhagawati Sallaghari – Hanumante Culvert Barabise – Kodari, Barabise – Kodary, RSDPAF-W-TYPM-NCB- Awarded Dolalghat – Lamusangu - barasise CR-Charikot-5B Ramnagar – Mugling, Mawakhola – RSDPAF-W-TYPM-NCB- Mugling Awarded CR-Bharatpur-6A Bharatpur – Meghauli Airport

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Tadi – Gangate, Tadi – Labdhu – RSDPAF-W-TYPM-NCB- Awarded Samundratar - Golphubhanjyang CR-Nuwakot-6B RSDPAF-W-TYPM-NCB- Jitpur- Pathlaiya, Bhimphedi – Kulekhani Retendered CR-Hetauda-7A Bardibas – Jaleshwor, Dharapani – RSDPAF-W-TYPM-NCB- Retendered Dhanusadham – Janakpur CR-Janakpur-7B Surajpura – Harpur Border, Butwal Municipality Boundary – Milanchok, RSDPAF-W-TYPM-NCB- Mahendra Park-Chidiya Khola, Bardaghat – Awarded WR-Butwal-8A Sunwal Mahakhola – Sukoura, Sunwal - Mahakhola Gorusinghe – Patharkot, Angure Ghumti – Sandhakharkka RSDPAF-W-TYPM-NCB- Retendered Thada Jukena- Angure Ghumti, Thada WR-Shivapur-8B (Re) Jukena- Angure Ghumti RSDPAF-W-TYPM-NCB- Damauli – Jyamiretar (Byass Marg awarded on 14th July, 2013 WR-Damauli-9A RSDPAF-W-TYPM-NCB- Syangja – Kuvinde awarded on 14th July, 2013 WR-Pokhara-9B Harthok – Ridi Bridge and Ridi Bridge – RSDPAF-W-TYPM-NCB- awarded on 12th July , 2013 Ghumti WR-Palpa-9C RSDPAF-W-TYPM-NCB- Khairi Khola – Kohalpur Retendered MWR-Nepalgunj-10A (Re) RSDPAF-W-TYPM-NCB- Mahakali Highway (H14) Patan – Satbanjh awarded on 12th July, 2013 FWR-Baitadi-11A Mahakali Highway Seti Highway, Syaule – Korayal and Silgadhi – Sanfe Road, RSDPAF-W-TYPM-NCB- awarded on 16th July , 2013 Silgadhi – Chaukhutte & Chaukhutte Bazar FWR-Doti-11B – Sanfe Mahendra Highway, Boradadi Sukhhad RSDPAF-W-TYPM-NCB- Choraha – Attariya & Junga – Sukhad awarded on 12th July, 2013 FWR-Mahendranagar-11C Choraha Consulting services

Activity name Contract No. Method Procurement Status

Consultant for mid-term review of RSDP-S-QCBS--101, QCBS Shortlisted and RFP issued Priority Investment Plan Goods contract

Activity name Contract No. Method Procurement Status

RD/RSDP/68- Hydraulic multimeter ICB Re-tendering process 69/MTC-1/ICB BIE ICB No. Bridge inspection vehicle RD/RSDPAF/69- ICB awarded on July, 2013 70/MB-1 Supervision Vehicles (2 RSDPAF-G- NCB awarded on July, 2013 numbers) NCB-2.

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Financial Management and Disbursement

Expenditures for FY2012/13 Expenditures of NPR 2,494.193 million has been incurred in the FY 2012/13 from the recurrent and the capital budget including expenditures of NPR 686.08 million incurred from the recurrent budget of the Roads Board. Following is the breakdown of expenditures:

Particulars Expenditures in NPR

Government IDA Grant IDA Credit Total Recurrent budget (3371423) - RSDP 14,586,317.22 0 0 14,586,317.22 Capital budget (3371424) - RSDP 83,047,972.04 359,404,745.49 1,351,073,779.40 1,793,526,496.93 Total of RSDP 97,634,289.26 359,404,745.49 1,351,073,779.4 1,808,112,814.15 Roads Board (3371653) 686,080,615.05 0 0 686,080,615.05 Grand Total 783,714,904.31 359,404,745.49 1,351,073,779.40 2,494,193,429.20 Expenditures incurred in FY 2012/13 are only 61.68% of the total approved budget of NPR 4,043.93 million which can be considered low in comparison with the approved budget. Budget for FY2013/14 The approved budget of the FY 2013/14 is NPR 2,808.87 million consisting the recurrent budget of NPR 20.87 million (code 3371423) and the capital budget of NPR 2,788.00 million (code 3371424). Out of the total amounts of approved budget, NPR 26.67 million is allocated under the Government source and NPR 2,542.20 million (Grant - NPR 50.22 million and Credit - NPR 2,040.00 million) from the IDA source. The Roads Board budget is not included in the above budget. The work program of the FY 2013/14 was submitted on August 7, 2013 to the Ministry of Physical Infrastructure and Transport. However, the approval of NPC is still pending. Reimbursable Expenditures Out of reimbursable expenditures of NPR 2,487.20 million (NPR 823,09 million - outstanding of the previous year and NPR 1,664.11 million of the FY 2012/13), NPR 1,444.27 million has been transferred to the GON treasury and NPR 1,042.93 million incurred in the third trimester of the FY 2012/13 is yet to be transferred to the GON treasury. RSDP is yet to request for documentation of NPR 1,697.04 million (equivalent to USD 19.66 million) already transferred to GON treasury and payments incurred up to FY2012/13. Disbursements Total disbursements as of August 31, 2013 is USD 40.82 million net of Designated Account (DA) balance drawn from the IDA Grant H339 which is 95.19% of the total allocated amount. However, 60% of overall funds (inclusive of additional financing) remain unutilized. An advance of USD 7.26 million has been paid during FY 2012/13 from IDA Credit 4832. An amount of USD 15.20 million (the IDA Grant H339 - USD 5.68 million and the IDA Credit 4832 - USD 9.51 million) has been documented during the FY 2012/13. No fund has been utilized from the IDA Grant H629 and the IDA Credit 5002. There is substantial unused balance of SDR 43.26 million excluding DA balance. There is outstanding DA balance of USD 1.97 million under the Grant H339 and USD 26.91 million under the Credit 4832. RSDP has already disbursed USD 7.39 million from DA but it is yet to be documented.

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Financial Management The Team noted that RSDP has maintained the required ledgers including the Designated Account Ledger, cash and bank book, budget sheet, program ledger, main and subsidiary grant and credit register in required format. Journal vouchers of DA transactions and amounts documented by the IDA have not been prepared. The Financial Management Information System developed to prepare Financial Monitoring Report and Project Account by entering the trimester expenditure amounts and transactions of Designated Account is not integrated with the accounting software developed by the DOR for accounting financial transactions. Both the software is operating as standalone but both are capable to fulfill requirement of the project. The project informed that contract monitoring system has been made operational. The account officer already transferred has been deputed temporarily on a part-time basis until further arrangement. The review team has strongly suggested to the project team to arrange a dedicated account officer deputed to the Project as early as possible. Without the Accounts Officer being posted, the Project is at high risk from the view point of timely reporting and timely submission of claims. The internal audit of the FY 2012/13 has been conducted but the report is not yet available. The team also reviewed the previous agreed action plan and noted that all the agreed actions have been completed except the training program to be organized at least once a year for capacity building of all cost centers has not been conducted in FY2012/13. The project team has agreed to conduct this training by October 31, 2013. Trimester Implementation Progress Report. The third trimester report of FY2012/13 is now overdue. The Project plans to submit this report by mid-September, 2013 Audit Report. There are no outstanding audit reports or audit issues. The review team reminded that the unaudited account is due on October 15, 2013 and the audited accounts on January 15, 2014.

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Annex 9 Governance, Accountability and Peace Filter

Governance and Accountability Plan Action (GAAP) An updated status GAAP matrix is presented in Annex 10. RSDP attention to GAAP actions is satisfactory. But this should not be limited to a mechanistic approach to handling governance issues in RSDP interventions. Effectiveness of these actions needs to improve in terms of their contribution to project objectives. An example is the grievance handling system under the Project. While the system will now be expected to be part of the comprehensive GRM in progress at DOR, its real value can only be assessed against (i) any improvements in management systems based on public inputs, and/or (ii) improved perception of DOR management among the public. In order for RSDP to demonstrate success in these indicators, baselines would have to be created now. The other option would be to agree on some key benchmarks. RSDP has pioneered the e-bidding process in Nepal, and its benefits are widely recognized. Efforts are underway to take stock of where e-bidding currently stands and what could be done to improve its effectiveness both in terms of technical innovation and management processes. This exercise would not only benefit RSDP but also other agencies that have adopted e-bidding as a procurement innovation. Another area that needs more management attention is M&E. First, capacity constraints at different levels have affected M&E performance. Whatever capacity is available with DOR needs to be fully used without distinguishing between sources of funds. This should happen within a consolidated framework for M&E procedures for all projects funded through GON sources or DP support. Second, and more important, the M&E framework should also capture project ‘outcomes’ going beyond the emphasis on inputs and outputs. Strengthening M&E efforts will require additional capacity which could be sourced through management innovation such as outsourcing. Peace Filter Policy dialogue: RSDP has opened up opportunities for policy dialogue on public investments in remote regions, which can be expected to contribute to inclusion and employment creation. Given that exclusion and poverty have been the major drivers of conflict in Nepal, RSDP interventions can be considered to be associated with peace. Implementation: RSDP undertakes pro-active communication through web-based, electronic, and print media. It has also carried out 'opinion surveys' which can be used as people's feedback on Project performance. The Project's social safeguard and grievance handling measures are other examples to promote peace and avoid conflict. E-bidding is another innovation, which has helped in preventing security threats during the award of contracts. Suggestions: RSDP should continue to respond to the needs of rural communities. Maintaining impartiality in the selection of projects is another important factor. Enhanced access to information based on information, education and communication (IEC) materials customized to community needs would also be of help. It is also suggested that the RSDP, with support from the Bank, organizes a workshop on Peace and Conflict issues to make aware all the actors who are involved in the preparation and implementation of the project works.

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Annex 10 Status of Governance and Accountability Action Plan (GAAP)

Agency Issues Actions responsible Timeline Status Organizational Arrangements and Procedures strengthening accountability - Designate staff within PCT and PMUs to DOR, PCT, By PCT: A K Mull within DOR and its field be responsible for implementation of Project’s field effectiveness PMU (SKM Road): PM S B offices GAAP at the respective central and field offices additional Ghimire levels financing PMU (K-C Road): PM R K Deo PMU (BD Road): AO M B Bhandhari PMU (S-M Road): PM S Nepal PMU (C-M-J Road): Assistant First, H B Basnet CRRD: Er. S R Shrestha ERRD: Ass First: K Adhikari WRRD: Ass First: L M Sigdel - Designate staff with PCT and PMUs to DOR, PCT, By PCT: A K Mull be responsible for handling complaints Project’s field effectiveness PMU (SKM Road): PM S B received from beneficiaries/road users and offices additional Ghimire contractors and reporting on the progress financing PMU (K-C Road): PM RK of handling complaints Deo PMU (BD Road): AO M B Bhandhari PMU (S-M Road): PM S Nepal PMU (C-M-J Road): Assistant First, H B Basnet

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Agency Issues Actions responsible Timeline Status CRRD: Er. S R Shrestha ERRD: Ass First: K Adhikari WRRD: Ass First: L M Sigdel - Submit trimester reports by PMUs to DOR, PCT, Trimester information in PMR PCT and trimester reports by PCT to DG Project’s field of DOR and WB project team on offices implementation of GAAP - Update and disseminate information DOR, PCT By appraisal published in DOR website disclosure policy for DOR-Bank projects in accordance with RTI 2007 (see Appendix 1) - Disclose annual progress report on DOR, PCT, Annually Published in DOR website GAAP implementation DOR website and Project’s field at its Project site offices offices

- Publicize the existence of the functioning DOR, PCT, By done complaint handling mechanism and venues Project’s field effectiveness of its access for general public and offices bidders/contractors (with a description of the process of handling complaints) on DOR website and concerned project site offices Technical improvement in design and - Regularly update material prices and use PCT/PMU Annually Estimation is done cost estimates the updated prices in cost estimates accordingly

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Agency Issues Actions responsible Timeline Status - Update GON old works norms and DOR Periodically GON old norms has been develop another set for equipment updated with equipment based method of construction based method

- Design reviews by Independent Technical Auditors (ITA) for conducting reviews of designs and cost estimates as required - Maintain database of unit rates for civil PCT/PMU Periodically done works major items - Compare estimated cost with market PCT/PMU Periodically done price established through competitive bidding Need for improvement in - Establish several channels (text done quality of construction works messages, hot line, on-line complaint box, in addition to written complaints) for beneficiaries/road users to communicate problems related to quality of contract works and condition of roads; advertise those channels on the information boards at the project sites, concerned project site By offices and DOR website DOR/PCT effectiveness QAP has been shared with - Strengthen internal quality controls: the Bank and improved format of QA plan to be cleared by WB, based on the and quality reports to be made available to suggestion/comment. Independent Technical Auditors for review - Enhance capacity building in QA for Training to DOR personnel DOR and field offices has been conducted and planned in future also

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Agency Issues Actions responsible Timeline Status - Engage ITAs to check for 20% of NVC is carrying out contracts in compliance with QA Plan technical audit of selected subprojects - Engage Ex-post ITAs for conducting NVC is carrying out audits on 20% sample of works including technical audit of selected the environmental and social safeguard subprojects aspects - Use ITAs to review sample work done by NVC is carrying out supervising consultants (e.g., variation technical audit of selected orders) during implementation subprojects Safeguards Possible adverse impacts on - Apply the Environmental and Social done the communities and Management Framework (ESMF) in environment project documents to determine and mitigate possible adverse impacts of the project on the social and environmental aspects - Conduct consultations with communities DOR/PCT/PMU By Appraisal in the process on possible adverse impacts and proposed mitigation measures - Define and agree on communities’ roles in the process in monitoring of project safeguard implementation and procedures of grievance redress mechanism Weak grievance redress - Set up (or improve where exist) a done mechanism/complaint functional complaint handling mechanism By handling mechanism as per ESMF DOR/PMU effectiveness - Inform communities of the functional role of this mechanism and its procedures Procurement

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Agency Issues Actions responsible Timeline Status Collusion among contractors, - WB to hold a training for contractors in Bank’s INT, Completed Completed submission of fraudulent WB requirements for contract SASDT SARPS information, any other corrupt management, role of WB’s INT during behavior preparation and implementation of WB- funded projects - During pre-bidding conference, carry out DOR/PCT Pre-bidding done/ process awareness campaign about sanctions to be stage of each undertaken against contractors who will be contract found and proved involved in corrupt practices (collusion, bribery, fraud, etc.) - Assess bidders’ capacity, maintain DOR/PCT As when done/ process regular updates of schedule of rates and required feedback from participating contractors, and encourage proper “slicing and packaging” to match the contractor capacity - Carry out an analysis of bids and DOR/PCT Bidding stage in the process verification in doubtful cases; PCT to seek of each WB’s advice for further actions if the contract cases are prevailing and take actions through PPMO. - If collusive, fraudulent or any other DOR/PCT Immediately in the process corrupt behavior is found and proved, when needed invoke relevant provision of the law (anti- corruption Act and Procurement Act) recommend the respective contractors to PPMO for blacklisting Intimidation (and/or - Continue using e-bidding for receiving DOR, Continued done extortion) of contractors bids from contractors

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Agency Issues Actions responsible Timeline Status during bidding and execution - Inform all contractors of existence of and DOR, Continued done of works encourage to use (domestic and international) complaint handling mechanisms in the Instruction To Bidders - In case of reports of intimidation (formal/ DOR/PCT/PMU Frequently in the process informal), conduct an awareness campaign among project stakeholders, including political parties present in respective districts, of potential threats and risks of possible intimidation to contractors during bidding and implementation periods to project implementation Cost variations and contract - Establish and regularly update a database As warranted in the process extensions of material prices - Encourage use of price adjustment With each done clauses in the contracts contract - In case of prior review, DOR to seek With each in the process concurrence for material extension of the contract DOR/PCT/PMU stipulated time for performance of the contract from the Bank. - Continue performance evaluation system With each in the process for design and supervision consultants contract - Disclose all variations to the awarded With each in the process contracts on the website contract Need in strengthening of - Enhance the e-bidding system to include DOR in the process transparency in procurement a tracking option to alert DOR about Continuous decision-making process delays of process from bid opening until award

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Agency Issues Actions responsible Timeline Status - Disclose bidding information, including DOR/PCT in the process summary of bid opening, name of the awarded contractor, engineer’s cost estimate and bid cost, etc., on the RSDP website and at respective project site offices within 15 working days of contract awards (see more details in Appendix 1)

Contract Management and Execution Improvement needed - Training on Project management and Continuous Done/process incapacity of Project Officials contract administration to be organized for in managing the contracts and DOR officials supervising the Consultants - Take departmental action against non- DOR/ MoPIT in the process and lack in accountability performer in accordance with the country’s legal framework applicable to government officials Timely Payment to ITAs to verify physical and financial DOR Continuous Technical Audit being contractors progress as well as verify contractual carried out by NVC payments (financial and procurement) in compliance with contractual requirements at the time of technical audit of 20% of the contracts. Poor performance by - Maintain a database of contractors’ DOR/PCT in the process contractors performance monitoring and analyze trends of contractors’ performance - Recommend to agencies in charge of MoPTM issuing licenses to take action against the Continued contractors as per the prevailing laws and regulations of Nepal based on the results of the database of contractors performance monitoring

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Agency Issues Actions responsible Timeline Status - Promptly invoke available contractual DOR/PCT/MoPIT remedial actions against non performing Contractors and Consultants Financial Management Operationalize Financial - Submit FMIS based trimester report on a DOR/PCT Start from Partially done. The FMIS Management Information timely basis. December 31, needs to be upgraded due to System (FMIS) in DOR 2010. change in the project funding source, and to make it fully functional. Dissemination of progress - Make publicly available reports on DOR/PCT Trimester Done reports physical and financial progress of all contracts on the DOR website, concerned project site offices s Capacity building on financial - Organize training program on financial DOR/PCT Semi-annual On the job training management management to all cost centers at least provided. once a year.

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Annex 11 Field Visit Report

Field visits to the Shitalpati Musikot road was conducted by Bank’s Consultant’s team mainly to identify the status of various agreed actions in terms of contract and quality management issues. A separate team including the safeguard team members also visited project sites mainly Chinchu Jajarkot road section to assess overall progress, quality, and status of compliance on the safeguard issues. Field visits have identified a number of issues and recommended as: (i) pro-active monitoring of contracts progress to expedite contract implementation; (ii) due diligence checks and controls applied in quarry operations and managing spoil disposal; (iii) ensuring all-time use of safety gears by workers and supervision staff at sites and ensure the safety of pedestrians and vehicles on under-construction roads; (iv) completion of bio-engineering works including small scale structures and slope drain works within the remaining wet period; (v) completion of the assessment of flood damages and finalization of contract variations; (vi) making the codes available to the field laboratories and ensuring appropriate setting up of mini laboratories; (vii) improvement of gabion works qualities (including the use of binding wire, production of sample gabion boxes and training of workers). All these issues were discussed with the related project team members, and further agreed with the project team of RSDP.

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