Heilongjiang Green Urban and Economic Revitalization Project

Project Administration Manual

Project Number: 49021-002 and 49021-004 Loan Number: L3613 and Lxxxx (Additional Financing) September 2019

People’s Republic of China: Heilongjiang Green Urban and Economic Revitalization Project

Investment Project Components (Section A)

ABBREVIATIONS ADB – Asian Development Bank BDS – business development services CDM – capacity development module DMF – design and monitoring framework EIA – environmental impact assessment EIB – European Investment Bank EMP – environmental management plan EPB – environment protection bureau ESMS – environmental and social management system FIC – financial intermediation component FMA – financial management assessment FSR – feasibility study report GAP – gender action plan GHG – greenhouse gas GRM – grievance redress mechanism HFD – Heilongjiang Finance Department HMG – Hegang Municipal Government HPG – Heilongjiang Provincial Government ICB – international competitive bidding ICS – individual consultants selection ITS – intelligent transport system JMG – Jixi Municipal Government LAR – land acquisition and resettlement MOF – Ministry of Finance MOFA – Ministry of Foreign Affairs NCB – national competitive bidding NDRC – National Development and Reform Commission NMT – nonmotorized transport O&M – operation and maintenance PAM – project administration manual PCA – procurement capacity assessment PCC – project completion certificate PMC – project management consultant PMO – project management office PPMS – project performance management system PRC – People’s Republic of China QCBS – quality- and cost-based selection QMG – Qitaihe Municipal Government RRP – report and recommendation of the President SCADA – supervisory control and data acquisition SCS – startup consulting service SGAP – Social and Gender Action Plan SMEs – small and medium-sized enterprises SMG – Shuangyashan Municipal Government SOE – statement of expenditure SPS – Safeguard Policy Statement TVET – technical and vocational education and training WTP – water treatment plant WWTP – wastewater treatment plant

WEIGHTS AND MEASURES ha – hectare km – kilometer m – meter m2 – square meter m3/d – cubic meter per day

CONTENTS I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 9 A. Project Readiness Activities 9 B. Overall Project Implementation Plan 10 III. PROJECT MANAGEMENT ARRANGEMENTS 14 A. Project Implementation Organizations: Roles and Responsibilities 14 B. Key Persons Involved in Implementation 18 C. Project Organization Structure 19 IV. COSTS AND FINANCING 20 A. Cost Estimates Preparation and Revisions 20 B. Key Assumptions 20 C. Detailed Cost Estimates by Expenditure Category 24 D. Allocation and Withdrawal of Loan Proceeds 25 E. Detailed Cost Estimates by Financier 27 F. Detailed Cost Estimates by Outputs 29 G. Detailed Cost Estimates by Year 30 H. Contract and Disbursement S-curve 31 I. Fund Flow Diagram 33 V. FINANCIAL MANAGEMENT 34 A. Financial Management Assessment 34 B. Disbursement 35 C. Accounting 37 D. Auditing and Public Disclosure 37 VI. PROCUREMENT AND CONSULTING SERVICES 38 A. Advance Contracting and Retroactive Financing 38 B. Procurement of Goods, Works, and Consulting Services 39 C. Procurement Plan 40 D. Consultant's Terms of Reference 49 VII. SAFEGUARDS 86 VIII. GENDER AND SOCIAL DIMENSIONS 92 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 98 A. Project Design and Monitoring Framework 98 B. Monitoring 103 C. Evaluation 105 D. Reporting 105 E. Stakeholder Communication Strategy 105 X. ANTICORRUPTION POLICY 106 XI. ACCOUNTABILITY MECHANISM 107 XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 107

ANNEX Environmental Management Plan

Project Administration Manual Purpose and Process

The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with the policies and procedures of the government and Asian Development Bank (ADB). The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. For this project two PAMs were developed to better serve the two distinct component types of the project and the respective parties involved: (i) Project Administration Manual: Investment Project Components (Section A) to be referred to as PAM (Section A), which is this PAM (Section A) and is now updated to include the additional financing loan (to cover the gap from originally planned cofinancing that did not materialize) which helps finance civil works and goods of outputs 3–5; and (ii) Project Administration Manual: Financial Intermediation Component and Business Development Services Subcomponent (Section B) to be referred to as PAM (Section B) for the original loan.

The Heilongjiang Provincial Government (HPG), the executing agency; and the four implementing agencies: the Hegang Municipal Government (HMG), Jixi Municipal Government (JMG), Qitaihe Municipal Government (QMG), and Shuangyashan Municipal Government (SMG); are wholly responsible for the implementation of ADB-financed projects, as agreed jointly between the borrower and ADB, and in accordance with the policies and procedures of the government and ADB. ADB staff is responsible for supporting implementation including compliance by HPG, HMG, JMG, QMG, and SMG, of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.

At loan negotiations, the borrower and ADB shall agree to the PAM and ensure consistency with the loan agreement. Such agreement shall be reflected in the minutes of the loan negotiations. In the event of any discrepancy or contradiction between the PAM and the loan agreement, the provisions of the loan agreement shall prevail.

After ADB Board approval of the project's report and recommendations of the President (RRP), changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval, they will be subsequently incorporated in the PAM.

I. PROJECT DESCRIPTION

A. Rationale

1. The project cities were important bases for coal mining and electricity production in the People's Republic of China (PRC), particularly between 1949 and 2013. 1 Their fundamental reliance on coal mining and related industries made their economies vulnerable, especially when coal prices dropped steeply in 2013. Changing global and domestic energy and climate change policies also contributed to rapid economic decline, wage reductions, unemployment, urban poverty, and population loss in the project cities.2 In 2014, the project cities had an average per capita gross domestic product of CNY26,600, 33% lower than the average rate in Heilongjiang Province, which in turn was about 16% below the national average.

2. The project cities suffer from environmental degradation (pollution of soil, water, and air) caused by more than 60 years of coal mining. This, along with inadequate urban infrastructure and services—e.g., water supply, wastewater management, drainage, and district heating systems—makes for poor livability. Project cities lack adequate road maintenance, public transport, bus lanes, bus stops, and sidewalks; and urgently need road rehabilitation. Some rivers, especially in Hegang and Jixi, flood during heavy storms, have narrow channels, and are polluted by sediments and untreated discharge of domestic and industrial wastewater.

3. Value added by the Asian Development Bank (ADB) assistance. ADB helped identify and comprehensively tackle key economic development challenges through non-coal diversification, sustainable and inclusive private sector development, and job creation. It enabled a holistic investment project that will generate cross-sector synergies. It prepared a diversification road map and small and medium-sized enterprise (SME) development and financing program to leverage ADB funds and strengthen the local finance sector. It contributes to regional public goods by preparing initial mining remediation strategies and identifying pilot projects that improve the environment and public health, and initiate a change of image from dirty coal cities to livable, clean, and green cities. ADB assessed the climate risk and proposed adaptation measures that are included in the overall project.

4. Strategic fit. The project builds on more than 20 years of partnership between ADB and Heilongjiang Province, including several strategic priority projects such as reducing pollution and flood risk in the Songhua River Basin with both public and private sector support.3 It supports government strategies to revitalize the PRC’s challenged northeastern region. Through its strategic and holistic approach, the project will support the (i) 13th five-year plans of the governments of the PRC, Heilongjiang Province, and project cities to transform the economy and improve financing of new industries and SMEs;4 (ii) Transformation Development Planning of Coal Cities in Heilongjiang Province, 2014–2020 by assisting SMEs in non-coal pillar industries such as green food processing, graphite high-tech materials and products, machinery, tourism,

1 Heilongjiang Provincial Government (HPG). 2016. Heilongjiang Statistical Yearbook, 2015. Harbin. 2 After 255,000 people out-migrated during 2010–2015, the population declined by 4.7%. 3 ADB. 2008. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People’s Republic of China for the Songhua River Basin Water Pollution Control and Management Project. Manila (Loan 2487- PRC, completed); and ADB. 2003. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People’s Republic of China for the Harbin Water Supply Project. Manila (Loan 1995-PRC, completed). 4 Government of the PRC, State Council. 2015. The Thirteenth Five-Year Plan for Economic and Social Development of the People's Republic of China, 2016–2020. Beijing; HPG. 2016. Thirteenth Five-Year Plan. Harbin; Municipal Government of Hegang. 2016. Thirteenth Five-Year Plan. Hegang; Municipal Government of Jixi. 2016. Thirteenth Five-Year Plan. Jixi; Municipal Government of Qitaihe. 2016. Thirteenth Five-Year Plan. Qitaihe; and Municipal Government of Shuangyashan. 2016. Thirteenth Five-Year Plan. Shuangyashan. 2

trade, and logistics; and (iii) the National New-Type Urbanization Plan, 2014–2020 by strengthening small and medium-sized cities.5 The project aligns with ADB policies, notably the (i) Strategy 2030 and its operational priority of livable cities by (a) providing integrated solutions to four cities to show their transformation from coal-based to diverse, green, and livable cities; (b) enhancing resilience to climate change shocks and stresses, e.g., reducing flood risk and increasing water safety; (c) strengthening institutions by building institutional knowledge and capacity; and (d) sharing best practices and innovation experiences both for replication in the PRC and for cooperation among developing member countries;6 (ii) country partnership strategy, 2016–2020 for the PRC by supporting socially inclusive, environmentally sustainable, and economically competitive urban development; 7 and (iii) various operational plans and environment operational directions.8

5. The current project was approved on 5 December 2017 and declared effective on 4 September 2018. It is performing well and meets all criteria to be eligible for additional financing because (i) it is rated on track under the project performance system; (ii) each safeguard covenant is being complied with; (iii) the delivery of expected outputs is rated successful given that the initial actions—such as advanced contracting and retroactive financing, 9 disbursement of an initial advance of $20 million to the advance account, subsequent liquidation and replenishment of $9.63 million, and the preparation of the detailed engineering design and bidding documents— are progressing as planned; and (iv) the management of risks is rated successful since all the risks in the Risk Assessment and Risk Management Plan were managed successfully. By June 2019, with 27.30% of the project time elapsed, physical progress stood at about 19.00%, and loan disbursement totaling $30.30 million was at 11.92% of the current ADB loan amount. Eight contracts totaling $22.88 million have been awarded.

6. The government requested ADB to provide additional financing to cover the financing gap that emerged when originally planned cofinancing by the European Investment Bank (EIB) did not materialize despite EIB’s earlier indication of interest. The proposed additional financing was included as a 2019 firm project for $150 million (€133.929 million equivalent) from ADB’s ordinary capital resources in the country operations business plan for the PRC, 2019–2021 to help finance outputs 3, 4, and 5. The project remains consistent with the country partnership strategy (footnote 7), and additional financing is essential to fully deliver the outputs and outcome.

B. Impact and Outcome

7. The project is aligned with the following impacts: (i) economy revitalized and diversified, and non-coal industries in the cities of Hegang, Jixi, Qitaihe, and Shuangyashan developed (footnote 4); and (ii) living environment, safety, and public health in the cities of Hegang, Jixi, Qitaihe, and Shuangyashan improved (footnote 5). The project will have the following outcome: non-coal economic activities and urban livability in project cities increased.10 The impact and outcome of the overall project will remain unchanged from the current project.

5 Government of the PRC, State Council. 2014. National New-Type Urbanization Plan, 2014–2020. Beijing. 6 ADB. 2018. Strategy 2030: Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the Pacific. Manila. 7 ADB. 2016. Country Partnership Strategy: Transforming Partnership: People’s Republic of China and Asian Development Bank, 2016–2020. Manila. 8 ADB. 2013. Urban Operational Plan, 2012–2020. Manila; ADB. 2011. Water Operational Plan, 2011–2020. Manila; ADB. 2013. Environment Operational Directions, 2013–2020: Promoting Transitions to Green Growth in Asia and the Pacific. Manila; ADB. 2010. Sustainable Transport Initiative Operational Plan. Manila; and ADB. 2011. Financial Sector Operational Plan, 2011–2020. Manila. 9 Includes a goods contract (HG-G2) and a civil works contract (SY-RC-W9) totaling $23.31 million. 10 The design and monitoring framework is in Section IX.

8. The comprehensive revitalization approach of the overall project is expected to help stop the out-migration of young and qualified workers, draw new individuals and companies to the newly attractive project cities, and retain existing residents. The project will directly benefit 2.73 million urban residents through (i) stronger SME competitiveness and job creation in improved non-coal industrial parks; (ii) a positive environment and public image through mining remediation; (iii) better water supply, sewers, district heating, flood protection, roads, road safety, and public transport; (iv) greater environmental and traffic safety awareness through public education programs; and (v) closer cooperation between project cities in tourism promotion, logistics and trade, supply chain integration, and SME support using smart city applications.

C. Outputs

9. The overall project outputs will remain unchanged from the current project. Details are in the design and monitoring framework (Section IX), in the project administration manuals (PAMs), and in the procurement plan.11

10. Output 1: Capacity for business development services and integrated project planning and management developed. The project will support project management and capacity development to ensure successful diversification and project sustainability in the areas of (i) project planning, procurement, and financial management; (ii) business development services (BDS) for SMEs and local SME bureaus; (iii) human resources and skills development; (iv) smart city cluster cooperation; (v) planning and implementation of mining remediation; (vi) flood risk management, climate resilience, and sponge city planning; (vii) design, construction, and operation of water, wastewater, and drainage systems; and (viii) sustainable urban public transport and road safety.

11. Output 2: Sustainable investment in small and medium-sized enterprises and access to finance in project cities improved. The project will establish an SME financing platform, using the financial intermediation component (FIC), to mobilize domestic financing. The platform will offer (i) cofinancing loans for SMEs by financial intermediaries in which the ADB loan component is subordinated, (ii) a first-loss cash collateral facility to mobilize commercial guarantees and ease access to commercial financing for investments and longer-term working capital, and (iii) entrusted loans for high-priority projects for local governments. The FIC will be linked to the BDS subcomponent (output 1).

12. Output 3: Key infrastructure and facilities for small and medium-sized enterprises in non-coal industrial parks in project cities constructed. The additional financing will augment the current loan to help build and make operational key infrastructure and facilities, including (i) roads with advanced safety features and associated utility pipes; (ii) industrial wastewater treatment plants (WWTPs); and (iii) facilities for SMEs, start-ups, and for training.

13. Output 4: Remediation and environmental cleanup from mining impacts in project cities improved. The additional financing will augment the current loan to help develop mining remediation strategies, prepare investment plans, and implement pilot projects as models for replication. In Hegang, remediation of an open-pit mine will involve grading, clay lining, topsoil cover, vegetation, environmental management, and monitoring. In Jixi, a former mining area and waste-rock dumpsite, and initiate construction and operation of a subsidence-monitoring

11 Project Administration Manual: Investment Project Components (Section A) [PAM (Section A)], and Project Administration Manual: Financial Intermediation Component and Business Development Services Subcomponent (Section B) [PAM (Section B)] (accessible from the list of linked documents in Appendix 2 of the report and recommendation of the President).

center. In Qitaihe and Shuangyashan, waste-rock dumpsites and subsidence areas will be remediated and reused as open spaces.

14. Output 5: Integrated urban infrastructure and services in project cities improved. The additional financing will augment the current loan to help enhance urban livability and attractiveness through improved, spatially integrated infrastructure and services: (i) Hegang— river rehabilitation, drainage system, sustainable urban and public transport, urban greening, and district heating; (ii) Jixi—integrated improvements to the core area of Hengshan District and West Jixi, including river rehabilitation, urban roads, water supply, wastewater management, and drainage system; (iii) Qitaihe—water supply, wastewater, and public transport systems improvements; and (iv) Shuangyashan—sustainable urban transport through key road links, water supply, sewer, and drainage systems. More specifically:

(i) Hegang. Integrated infrastructure focuses on river rehabilitation, drainage, sustainable transport, urban greening, and district heating. Four rivers will be rehabilitated and flood protection standard will be increased to 1 in 50-year flood events for Shitou River, Heli River, and Xiaoheli River (total 16.6 kilometers [km]), and to 1 in 20-year flood events for Qianjin Creek (3.3 km). District heating systems energy efficiency will be improved through retrofitting 7.2 km of primary and 65.2 km of secondary aging and leaking pipes. Sustainable transport improvements include road rehabilitation with introduction of bus lanes, improved bus stops, pedestrian sidewalks, intersections, street greening, and associated drainage pipes with a total of 34.3 km of existing inner city roads, and intelligent transport system equipment at 50 bus stops and signal control, traffic safety improvements, and road maintenance equipment.

(ii) Jixi. Improvements to urban livability, integrated infrastructure, urban environment, and public facilities will focus on the core area of Hengshan District and West Jixi. Two rivers, Huangni River and Anle Creek; with a total length of 8.7 km will be rehabilitated and flood standard improved to a 1 in 20-year flood events for Huangni River and 1 in 30-year flood events for Anle Creek, and Hongqi Lake (23.5 hectares [ha]) will be rehabilitated. The water supply system will be rehabilitated, including upgraded water intake (84,000 cubic meters per day [m3/d]), upgraded water treatment plant (WTP) (50,000 m3/d), new advanced treatment units (80,000 m3/d), and sludge treatment facility. Water supply pipes will be retrofitted to reduce leakage (total length 72.5 km). Sanitary sewer pipes with a total length of 23.3 km, and one pump station will be built. New drainage pipes of 12.5 km; drainage trench of 20.0 km, 3 pump stations, and 5 sedimentation tanks to collect, treat, and discharge rain water will be built. In Hengshan District, roads with a total length of 2.2 km will be constructed, along with pedestrian and vehicular safety improvements. A public park and plaza with 3.2 ha will be created with a public training center for technical education and training, mining remediation monitoring and training, public technical library, and associated amenities with 18,000 square meters (m2) area.

(iii) Qitaihe. Urban public service improvements will focus on water supply system and public transport. The water supply system will be improved including rehabilitation and upgrading of two WTPs with design capacities of 100,000 m3/d and 50,000 m3/d, and upgrade of water intake at Taoshan reservoir. The distribution system will be improved replacing 17.8 km old main pipes, installing 73.2 km of new main pipes, and building booster pump stations. The project will also support

nonrevenue water reduction with two pilots in the early implementation stage. Later it is planned to upscale nonrevenue water reduction using lessons from pilots involving about 100 communities complementing a government-financed program. Public transport improvements will include acquisition of 209 electric buses, construction of three bus terminals with charging stations, complementing city programs implementing bus priority lanes and bus stop upgrades on key routes, and smart city public transport applications.

(iv) Shuangyashan. Urban livability and integrated urban infrastructure improvements include supporting utility system upgrading and expansion, and improving sustainable urban transport. Water supply main pipes (24.7 km), 2 new pump stations, and 3 water tanks will be built, improvements at the WTP, new laboratory, flow meters at key intersections, and a supervisory control and data acquisition (SCADA) system will be installed, complementing a city program to reduce nonrevenue water. Sewer and drainage networks will be improved with the construction of 85.1 km sewers and installation of 69.6 km of drainage pipes. Sustainable urban transport system improvement includes construction of key missing road links from the urban core area to the ring road and a missing section of the ring road with a total length of 6.7 km improving public transport routing, nonmotorized and vehicular circulation, and traffic safety.

15. Detailed information on outputs is in the following tables.

Table 1: Output 3: Key Infrastructure and Small and Medium-Sized Enterprises Facilities in Non-Coal Industrial Parks in Project Cities Constructed Item Subcomponent Brief Description Hegang HG 3.1 Hegang industrial park (green Three roads in the park will be built (about 6.3 km), and associated food, green energy, and high- utility pipes and cables will be installed, including 6.3 km each of tech)—infrastructure and water supply pipes; drainage pipes; sewer pipes; and heating multifunctional SME support pipes. An SME service and training center and park management facilities building (8,000 m2) will be constructed. HG 3.2 Hegang Luobei County industrial A WWTP with 6,000 m3/d capacity to treat wastewater from park (high-tech graphite-based graphite materials processing and production process will be materials and e-mobility)— constructed. After treatment, the wastewater will be reused for the WWTP and treated wastewater park. reuse pipe Jixi JX 3.1 Hengshan District industrial park The old phase I ring road (about 3.0 km) will be rehabilitated and (high-tech graphite-based upgraded, and a new road, the middle ring road (1.3 km), will be materials and e-mobility)—road constructed, including utility pipes. infrastructure and SME support facilities JX 3.2 Jiguan District industrial park A new WWTP (20,000 m3/d) and associated wastewater collection (non-coal SMEs)—WWTP and pipes (8.84 km, DN300-800) will be constructed and sewer pipes commissioned. Qitaihe QH 3.1 Qitaihe industrial park (green Two roads with total length of 2.1 km, and associated utility pipes food and pharmaceutical bio- and cables will be constructed. An SME training and service center fermentation)—road and an SME business center with a total area of 12,000 m2 will be infrastructure and SME support built. facilities Shuangyashan SY 3.1 Shuangyashan business park Four roads with a total length of around 5.7 km inclusive of (non-coal SME and PRC-Russia associated utility pipes and cables will be constructed, and business and trading park)—road

Item Subcomponent Brief Description and utility infrastructure and SME additional 4.4 km water supply pipes and 7.0 km sewer pipes will support facilities be installed to connect to the existing systems.

SME facilities with total floor area of 40,000 m2 will be constructed and commissioned ha = hectare, km = kilometer, m2 = square meter, m3/d = cubic meter per day, PRC = People’s Republic of China, SMEs = small and medium-sized enterprises, WWTP = wastewater treatment plant.

Table 2: Output 4: Remediation and Environmental Cleanup from Mining Impacts in Project Cities Improved Item Subcomponent Brief Description Hegang HG 4.1 Remediation of open pit mine The subcomponent has a total area of 52.6 ha, an area of 23.6 ha and wasterock dumpsite will be filled in a controlled way considering geotechnical stability with waste rock together with clay layer by layer, and site will be graded. New roads of 3.9 km with sidewalks on both sides and landscaping will be built on the surface. Pedestrian paths of 2.6 km and green land with a total area of 13.7 ha will be built. Jixi JX 4.1 Hengshan District waste rock Work has two phases: dumpsite remediation (i) Phase I includes geological survey of project area of 89.7 ha; and (ii) Phase II includes site remediation approaches based on survey results, site grading of 20.5 ha, reforestation of 69.2 ha, drainage interceptor ditch of 2.0 km, drainage ditch of 1.0 km, retaining wall of 0.3 km, fence of 0.6 km, and landscaping works. (A mining impact monitoring station will be built as part of output 5) Qitaihe QH 4.1 Mining remediation and A waste rock dumpsite (10.4 ha) and a mining subsidence area environmental rehabilitation (11.3 ha) will be remediated. A total of 187,313 m3 of waste rock from 10.4 ha will be removed and the waste rock will be used to fill the subsidence area and planting of trees in both sites. Shuangyashan SY 4.1 Wasterock dumpsite The wasterock dumpsite in Xiaoxishan is a depleted coal mine, with remediation: Xiaoxishan mine an area of 24.7 ha. It comprises forest land of 6.1 ha and construction land of 18.6 ha. The project will increase afforestation and remediate the construction land, then the remediated land is planned for future use as farmland. Works include 206,788 m3 of wasterock removal, 192,314 m3 of filling and grading of area affected by subsidence, reforestation, and construction of a drainage ditch. ha = hectare, km = kilometer, m = meter, m3 = cubic meter.

Table 3: Output 5: Integrated Urban Infrastructure and Services in Project Cities Improved Item Subcomponent Brief Description Hegang HG 5.1 Integrated river rehabilitation and Flood protection of four rivers, three of which (16.6 km) according cleanup from mining and to 1 in 50-year flood standard and Qianjin Creek according to 1 in ecosystems-based adaption 20-year flood standard (3.3 km), will include dredging, and (Shitou River, Qianjin Creek, Heli embankment construction implementing green infrastructure River, and Xiaoheli River) approach with landscaping as a river greenway to increase flow capacity.

Green-belt up to 30 m wide on each side or one side of the rivers will be built. The total greening area is about 75.0 ha, mainly planted with local tree species.

Item Subcomponent Brief Description HG 5.2 District heating system energy 7.2 km primary pipe network and 65.2 km secondary pipe network efficiency improvements will be retrofitted. HG 5.3 Road rehabilitation, public Curb side bus priority lanes of 29.1 km on urban roads will be transport, and NMT provided. Service of public transport and NMT will include: improvements (i) 34.3 km roads rehabilitated, including roads resurfacing, over 50 pairs of bus bays, sidewalk improvements, and some intersections’ safety improvements; (ii) ITS with intelligent signal control system, passenger information system, and surveillance system; (iii) special vehicles and/or equipment for road maintenance will be purchased; and (iv) 14.3 km drainage pipes associated with the rehabilitation of 29 roads will be installed. Jixi JX 5.1 Hengshan District integrated Flood risk protection of two rivers: Anle Creek (0.8 km) (1 in 30- rivers and lake rehabilitation and year flood protection standard), and Huangni River (7.9 km) (1 in ecosystems-based adaptation 20-year flood protection standard). Hongqi Lake (23.5 ha) will be (Hongqi Lake, Anle Creek, and rehabilitated. Huangni River) JX 5.2 Hengshan District urban 3.2 ha of land including green park, multiuse public training and regeneration, community education facility with a mining remediation monitoring and training facilities, and public space center (gross floor area: 8,000 m2), technical library (5,000 m2), and improvement gym (5,000 m2) will be rehabilitated and opened for public use. JX 5.3 Hengshan District roads Jiaotong Street will be rebuilt (0.4 km) and a road on the riverbank improvement will be built (1.5 km). Gongqu road and flyover will be constructed (around 0.3 km). JX 5.4 Jixi urban infrastructure—water Water supply pipes of 72.5 km to reduce leakage will be supply pipes, wastewater refurbished; 23.3 km sewer pipes to separate sewage and rain collection, and drainage water will be installed; new drainage pipes of 12.5 km and drainage trench of 20.0 km; 5 sedimentation tanks will be built to collect, treat, and discharge rainwater; and associated 1 sewer pumping station and 3 drainage pumping stations will be constructed and equipped. JX 5.5 Jixi City No. 3 water treatment Existing water intake (84,000 m3/d) and water treatment plant plant upgrading and expansion (50,000 m3/d) will be upgraded, and new advanced treatment units (80,000 m3/d) and sludge treatment facilities will be constructed and installed.

Qitaihe City QH 5.1 Qitaihe WTPs upgrading and Two WTPs will be upgraded: Shengke WTP (Plant I) with design water supply distribution system capacity of 100,000 m3/d, and water and sewerage company's replacement and expansion WTP (Plant II) with design capacity of 50,000 m3/d.

Taoshan reservoir in Qitaihe City will remain the water source for the two plants. The project will help to develop a river basin pollution comprehensive control master plan under output 1. The water intake will also be upgraded by replacing equipment.

Water supply and distribution system will be replaced and expanded in this component, including replacing 17.8 km old main pipes and installing 73.2 km new main pipes, and 15 booster pump stations will also be built.

The project will pilot test an NRW reduction program in two pilot communities in the city under output 1. The experience gained in the pilot tests will then be used to scale up to approximately 100 communities for NRW reduction expected after midterm review mission. QH 5.2 Sustainable and clean fuel public Under this subcomponent transport improvements (i) 209 electric buses will be procured to replace the old diesel buses;

Item Subcomponent Brief Description (ii) three bus terminals with charging stations will be built; (iii) current bus operation and control system will be upgraded using cell phone applications for passenger information system, and fare collection system; and (iv) peak hour bus lanes will be implemented on key routes, and bus stops will be improved as part of counterpart activities. Shuangyashan City SY 5.1 Urban infrastructure—water Water supply: 24.7 km of water main; 2 new pumping stations supply, wastewater collection, (35,000 m3/d, and 15,000 m3/d); 3 clean water tanks (3,600 m3, and drainage 3,000 m3 and 4,000 m3), 1 reservoir (3,000 m3) and other associated facilities, which include drainage pipe in the WTP, new laboratory, flow meters at key intersections, and the SCADA system. Drainage pipe installation with total length of 52.3 km in Jianshan District. Sewer pipe installation with total length of 25.5 km sewer pipe in Lingdong District and 59.6 km sewer pipe in Jianshan District will be installed. SY 5.2 Key road connections Subcomponents include: constructed (i) South Ring Road on an existing narrower road with a length of about 3.8 km will be built; (ii) Yunfeng link including a tunnel and approach roads with a total length of about 1.4 km will be constructed; and (iii) Xinxing Avenue link with one ramp and related approach roads will be built, and bus lanes will be placed in the bridge section of six lanes with a length of about 1.5 km. ha = hectare, ITS = intelligent transport system, km = kilometer, m = meter, m3 = cubic meter, m3/d = cubic meter per day, NMT = nonmotorized transport, NRW = nonrevenue water, SCADA = supervisory control and data acquisition, SMEs = small and medium-sized enterprises, WTP = water treatment plant. Source: Asian Development Bank estimates.

D. Beneficiaries

16. With its comprehensive urban and economic revitalization approach, the project is expected to help stop and reverse the out-migration of the younger qualified workforce and attract and retain residents, companies, and jobs to more attractive project cities. The project will directly benefit 2.73 million urban residents through (i) stronger SME competitiveness and jobs creation in improved non-coal industrial parks; (ii) better public image through mining remediation; (iii) improved water supply, sewerage, district heating, flood protection, roads, road safety, and public transport; (iv) greater environmental and traffic safety awareness through public education programs; and (v) increased cooperation between the project cities in tourism promotion, logistics and trade, supply chain integration, and SME support through smart city applications. By component, the project will benefit 2.18 million people (mining rehabilitation); 50,000 people in Hegang (district heating); 848,600 people excluding Hegang (water supply); 1.48 million people in Hegang and Jixi (river rehabilitation); 2.73 million people (road and traffic services); and 16,480 employees (industrial parks). The indirect beneficiaries are the entire populations of the project cities.

II. IMPLEMENTATION PLANS

A. Overall Project Readiness Activities

Table 4a: Overall Project Readiness Activities 2017 2018 Responsible Individual/ (Months) (Months) Unit/Agency/ Indicative Activities 4 5 6 7 8 9 10 11 12 1 2 3 Government Establish project HPG, HDRC, implementation implementing agencies, arrangements PMOs, PIUs Feasibility study HPG, HDRC, reports, EIA, implementing agencies, resettlement plans, PMOs and FCUP approved by HDRC FCUP approved by HPG, HDRC, NDRC implementing agencies, PMOs Loan negotiations ADB, MOF, HPG, current loan implementing agencies ADB Board approval ADB current loan Loan signing current ADB, MOF loan Loan effectiveness ADB, MOF current loan Declared effective on 4 September 2018 ADB = Asian Development Bank, EIA = environmental impact assessment, FCUP = Foreign Capital Utilization Plan, HDRC = Heilongjiang Development and Reform Commission, HPG = Heilongjiang Provincial Government, MOF = Ministry of Finance, NDRC = National Development and Reform Commission, PIU = project implementation unit, PMO = project management office. Source: Asian Development Bank estimates.

Table 4b: Additional Financing Project Readiness Activities 2019 2020 Responsible Individual/ (Months) (Months) Unit/Agency/ Indicative Activities 4 5 6 7 8 9 10 11 12 1 2 3 Government Advance contracting HPG, HDRC, i.e., bid document implementing agencies, preparation and PMOs, PIUs review Retroactive financing HPG, HDRC, actions implementing agencies, PMOs, PIUs Loan negotiations ADB, MOF, HPG, implementing agencies ADB Board approval ADB Loan signing ADB, MOF Government legal MOF, MOFA opinion provided Loan effectiveness ADB, MOF ADB = Asian Development Bank, HDRC = Heilongjiang Development and Reform Commission, HPG = Heilongjiang Provincial Government, MOF = Ministry of Finance, MOFA = Ministry of Foreign Affairs, PIU = project implementation unit, PMO = project management office. Source: Asian Development Bank estimates.

B. Overall Project Implementation Plan

Table 5: Overall Project Implementation Plan 2017 2018 2019 2020 2021 2022 2023 (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) Indicative Activities 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Output 1: Capacity for business development services and integrated project planning and management developed (i) Recruit and mobilize implementation support consultants (ii) Implement BDS support to SMEs (iii) Implement capacity development training (iv) Implement and monitor EMP, resettlement plan, and SGAP Output 2: See PAM (Section B) Output 3: Key infrastructure and facilities for SMEs in non-coal industrial parks in project cities constructed Hegang HG 3.1. Hegang industrial park—infrastructure and multifunctional SME support facilities (i) Engineering design (ii) Implement resettlement plan (iii) Procure civil works (iv) Construction (v) Inspect and deliver HG 3.2. Hegang Luobei County industrial park—WWTP and treated wastewater reuse pipe (i) Engineering design (ii) Implement resettlement plan (iii) Procure civil works (iv) Procure goods (v) Construction (vi) Inspect and deliver Jixi JX 3.1. Hengshan District industrial park—road infrastructure and SME support facilities (i) Engineering design (ii) Implement resettlement plan (iii) Procure civil works (iv) Construction (v) Inspect and deliver JX 3.2. Jiguan District industrial park—WWTP and sewer pipes (i) Engineering design (ii) Implement resettlement plan (iii) Procure civil works (iv) Procure goods (v) Construction (vi) Inspect and deliver Qitaihe QH 3.1. Qitaihe industrial park—road infrastructure and SME facilities (i) Engineering design

2017 2018 2019 2020 2021 2022 2023 (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) Indicative Activities 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 (ii) Implement resettlement plan (iii) Procure civil works (iv) Construction (v) Inspect and deliver Shuangyashan SY 3.1. Shuangyashan business park—road and utility infrastructure and SME facilities (i) Engineering design (ii) Implement resettlement plan (iii) Procure civil works (iv) Construction (v) Inspect and deliver Output 4. Remediation and environmental cleanup from mining impacts in project cities improved Hegang HG 4.1. Remediation of open pit mine and wasterock dumpsite (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver Jixi JX 4.1. Hengshan District wasterock dumpsite remediation (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver Qitaihe QH 4.1. Mining remediation and environmental rehabilitation (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver Shuangyashan SY 4.1. Wasterock dumpsite remediation: Xiaoxishan mine (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver Output 5. Integrated urban infrastructure and services in project cities improved Hegang HG 5.1. Integrated river rehabilitation and cleanup from mining and ecosystems-based adaptation (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver HG 5.2. District heating system energy efficiency improvements (i) Engineering design

2017 2018 2019 2020 2021 2022 2023 (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) Indicative Activities 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver HG 5.3. Road rehabilitation, public transport, and non-motorized transport improvements (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver Jixi JX 5.1. Hengshan District integrated rivers and lake rehabilitation and ecosystems-based adaptation (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver JX 5.2. Hengshan District urban regeneration, community facilities, and public space improvement (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver JX 5.3. Hengshan District roads improvement (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver JX 5.4. Jixi urban infrastructure—water supply pipes, wastewater collection, and drainage (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver JX 5.5. Jixi City no.3 water treatment plant upgrading and expansion (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver Qitaihe QH 5.1. Water treatment plants upgrading, water supply distribution system replacement and expansion (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver

2017 2018 2019 2020 2021 2022 2023 (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) (Qtr) Indicative Activities 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 QH 5.2. Sustainable and clean fuel public transport improvements (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver Shuangyashan SY 5.1. Urban infrastructure—water supply, wastewater collection, and drainage (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver SY 5.2. Key road connections (i) Engineering design (ii) Implement resettlement plan (iii) Procurement (iv) Construction (v) Inspect and deliver B. Management activities Procurement plan key activities to procure contract packages Environment management plan key activities Social and Gender action plan key activities Communication strategy key activities Annual and/or midterm review Project completion report BDS = business development services, CDM = capacity development module, SMEs = small and medium-sized enterprises. Source: Asian Development Bank estimates.

III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Implementation Organizations: Roles and Responsibilities

Table 6: Key Parties Involved in Project Implementation and Roles and Responsibilitiesa Project Implementation Organizations Management Roles and Responsibilities Executing agency: (i) Responsible for overall project implementation Heilongjiang Provincial (ii) Supervise and coordinate overall project planning, management, and Government implementation (iii) Facilitate disbursement through HFD (iv) Facilitate project auditing (v) Supervise the implementing agencies (vi) Facilitate disbursements and timely annual project account audits Heilongjiang (i) Provide overall project guidance and coordination Development and (ii) Oversee and coordinate project preparation and implementation Reform Commission in (iii) Provide overall policy guidance and overall coordination and project management cooperation with (iv) Coordinate project implementation activities among government agencies Heilongjiang Finance (v) Meet regularly, discuss, and take actions to ensure smooth project implementation Department Heilongjiang Finance (i) Establish and manage project advance account for ongoing loan, and establish Department and manage a separate account (i.e., as subledger) for the additional financing (ii) Submit withdrawal applications to ADB (iii) Manage and supervise loan repayment (iv) Oversee and facilitate provision of counterpart funds (v) Provide financial management support to PMOs Implementing agencies: (i) Provide counterpart funds and for loan repayment Hegang Municipal (ii) Design and procure works and goods under all infrastructure components, and Government administer and monitor the contractors and suppliers, with the support of design institutes, tendering agent and supervision companies Jixi Municipal (iii) Undertake contract management, construction supervision and quality control, Government with the support of supervision companies (iv) Develop project management procedures, implementation plan, and financial Qitaihe Municipal management Government (v) Review and submit withdrawal applications to HFD (vi) Maintain separate project accounts for the project Shuangyashan Municipal (vii) Prepare and update EMP and other project documents Government (viii) Participate in training (ix) Organize project acceptance verification Project management (i) Responsible for day-to-day project implementation activities for all infrastructure office in each project city subcomponents in the respective city (ii) Manage project preparation and implementation on behalf of the respective implementing agency (iii) Coordinate participating local government agencies, institutes, and consultants (iv) Coordinate land acquisition and resettlement activities (v) Implement non-structural and capacity development components (vi) Procure consulting services contract packages and facilitate bid evaluation (vii) Prepare and update procurement plan and other project documents (viii) Provide ADB with (a) quarterly project progress reports, (b) semiannual environmental, resettlement, social and gender monitoring reports, (c) annual audit reports, and (d) project completion report (ix) Forward semiannual external and internal environment monitoring and evaluation reports to ADB (x) Prepare withdrawal applications and submit through municipal finance bureaus to the HFD (xi) Carry-out project performance and compliance monitoring (xii) Disclose project-related information and documents in accordance with ADB guidelines

Project Implementation Organizations Management Roles and Responsibilities ADB (i) Support project administration including executing agency and implementing agencies’ compliance of obligations and responsibilities in accordance with ADB policies and procedures (ii) Monitor and review the project progress and impact (iii) Review and approve procurement, contract awards, and other reports (iv) Approve withdrawal applications and disburse loan proceeds ADB = Asian Development Bank, EMP = environmental management plan, HFD = Heilongjiang Finance Department, PMO = project management office. a A separate list of management arrangements is provided for the financial intermediation component in the Project Administration Manual Section B: Financial Intermediation Component and Business Development Services Subcomponent. Source: Asian Development Bank.

Table 7: Project Management Arrangements for Hegang Project Implementation Subcomponent Units Operation and Maintenance Units Hegang industrial park (green food, Hegang Economic Hegang Industrial Park Management green energy, and high-tech)— Development Area Committee infrastructure and multifunctional Construction Company SME support facilities Hegang Luobei County industrial Liyun Investment and To be decided by the PIU park (high-tech graphite-based Development Company materials and e-mobility)—WWTP and/or Luobei County PMO treated wastewater reuse pipe Remediation of open pit mine and Hegang Natural Resources To be decided by the PIU waste rock dumpsite Bureau Integrated river rehabilitation and Hegang Water Affairs Hegang River Course and Small Reservoir cleanup from mining and Bureau Management Department ecosystems-based adaption (Shitou River, Qianjin Creek, Heli River, and Xiaoheli River) District heating system energy Hegang City Management Hegang City Management and efficiency improvements and Administrative Administrative Enforcement Bureau Enforcement Bureau

Road rehabilitation, public transport, Hegang City Management (i) Road: Hegang Public Transport Bureau and NMT improvements and Administrative (ii) Heating: Huisheng Water Supply and Enforcement Bureau Heat Supply Company (iii) Drainage: Hegang Water Supply and Wastewater Management Department PIU = project implementation unit, PMO = project management office, SMEs = small and medium-sized enterprises, WWTP = wastewater treatment plant. Source: Asian Development Bank.

Table 8: Project Management Arrangements for Jixi Project Implementation Subcomponent Units Operation and Maintenance Units Hengshan District industrial park Hengshan District Graphite Hengshan District Graphite Industrial Park (high-tech graphite-based materials Industrial Park Management Office and e-mobility)—road infrastructure Management Office and SME support facilities Jixi Jiguan District industrial park Administrative Committee To be determined WWTP and sewer pipes of Jiguan Private Enterprise Scientific and Technological Enterprises Demonstration Park Hengshan District wasterock Jixi City Hengshan District Jixi City Hengshan District Construction dumpsite remediation Construction Bureau Bureau

Project Implementation Subcomponent Units Operation and Maintenance Units Hengshan District integrated rivers Jixi City Hengshan District Jixi City Hengshan District Construction and lake rehabilitation and Construction Bureau Bureau ecosystems-based adaptation (Hongqi Lake, Anle Creek, and Huangni River) Hengshan District urban Jixi City Hengshan District Jixi City Hengshan District Culture, regeneration, community facilities, Culture, Broadcasting and Broadcasting and Tourist Bureau and public space improvement Tourist Bureau Hengshan District roads Jixi City Hengshan District Jixi City Hengshan District Construction improvement Construction Bureau Bureau Jixi urban infrastructure—water Jixi Lutong Municipal Jixi Municipal Infrastructure Management supply pipes, wastewater collection, Engineering Company Division and drainage Jixi City No. 3 water treatment plant Jixi City Water Supply Jixi City Water Supply Company upgrading and expansion Company PMO = project management office, SMEs = small- and medium-sized enterprises, WWTP = wastewater treatment plant. Source: Asian Development Bank.

Table 9: Project Management Arrangements for Qitaihe Project Implementation Subcomponent Units Operation and Maintenance Units Qitaihe industrial park (green food Qitaihe Economic Qitaihe Economic Development Area and pharmaceutical Development Area Administrative Committee biofermentation)—road Administrative Committee infrastructure and SME support facilities Mining remediation and Qitaihe Natural Resources Qitaihe Natural Resources Bureau environmental rehabilitation Bureau Qitaihe water treatment plants Qitaihe Water Affairs and Qitaihe Water Affairs and Water Supply upgrading and water supply Water Supply Company Company (four departments) distribution system replacement and expansion Sustainable and clean fuel public Qitaihe Public Qitaihe Public Transportation Company transport improvements Transportation Company PIU = project implementing unit, SMEs = small- and medium-sized enterprises. Source: Asian development Bank.

Table 10: Project Management Arrangements for Shuangyashan Project Implementation Subcomponent Units Operation and Maintenance Units Shuangyashan business park (non- Shuangyashan Economic Shuangyashan Economic Development coal SME and PRC-Russia Development District District Administrative Committee business and trading park)—road Administrative Committee and utility infrastructure and SME support facilities Wasterock dumpsite remediation: Shuangyashan Lingdong Shuangyashan Lingdong District Xiaoxishan Mine District Government Government Urban infrastructure—water supply, Water supply: Water supply: Shuangyashan City Water wastewater collection, and drainage Shuangyashan City Water Supply Company Supply Company Wastewater and Drainage: Wastewater and drainage: Shuangyashan Shuangyashan City Facility City Facility Maintenance Center Maintenance Center Key road connections South Ring Road: South Ring Road: Shuangyashan City Shuangyashan City Transport Bureau Transport Bureau.

Project Implementation Subcomponent Units Operation and Maintenance Units Yunfeng and Xinxing Yunfeng and Xinxing Avenue links: Avenue links: Shuangyashan City Urban Construction Shuangyashan City Urban Project Management Office Construction Project Management Office SMEs = small- and medium-sized enterprises. Source: Asian Development Bank.

B. Key Persons Involved in Implementation

Executing Agency Officer's Name: Li Chenglin Heilongjiang Provincial Position: Deputy Director of Foreign Capital Utilization and Government Overseas Investment Division of Hegang Provincial Development Reform Commission (DRC) Telephone No.: +86 451 8260 3161 Email Address: [email protected] Office Address: Heilongjiang Provincial DRC, Zhongshan St. 202, Nangang District, Harbin, Heilongjiang Implementing Agencies Officer's Name: Chen Lixin Hegang Municipal Position: Deputy Director of Hegang DRC Government Telephone No.: +86 187 1463 5666 Email Address: [email protected] Office Address: Hegang DRC, Beijing Rd. No.1, Xiangyang District, Hegang, Heilongjiang Jixi Municipal Government Officer's Name: Song Lijie Position: Deputy Director of Jixi City Government DRC Telephone No.: +86 139 4583 4789 Email Address: [email protected] Office Address: Jixi DRC, Hongqi Rd. 18, Jixi, Heilongjiang Qitaihe Municipal Government Officer's Name: Feng Liang Position: Deputy Director of Qitaihe DRC Telephone No.: +86 186 4641 9002 Email Address: [email protected] Office Address: Qitaihe DRC, Qitaihe, Heilongjiang Shuangyashan Municipal Officer's Name: Liu Ping Government Position: Deputy Director of Shuangyashan DRC Telephone No.: +86 136 0458 8508 Email Address: [email protected] Office Address: Shuangyashan DRC, Jianshan District, Shuangyashan, Heilongjiang Asian Development Bank Staff Name: Sangay Penjor East Asia Department Position: Director Urban and Social Sectors Telephone No.: +63 2 632 6148 Division Fax No.: +63 2 636 2407 Email Address: [email protected] Mission Leader Staff Name: Stefan Rau Position: Senior Urban Development Specialist Telephone No.: +63 2 632 5812 Email Address: [email protected]

C. Project Organization Structure

Asian Development Bank PRC National Government

Heilongjiang Provincial Government (Executing Agency) Project Lead, Supervision, Coordination, and Management

Hegang Jixi Qitaihe Shuangyashan Municipal Government Municipal Government Municipal Government Municipal Government (Implementing Agency) (Implementing Agency) (Implementing Agency) (Implementing Agency)

Project Leading Group Project Leading Group Project Leading Group Project Leading Group

Project Management Project Management Project Management Project Management Office Office Office Office

Project Implementation Project Implementation Project Implementation Project Implementation

Units Units Units Units (i) Hegang Economic (i) Hengshan District (i) Qitaihe Economic (i) Shuangyashan Development Area PMO Development Area Economic Construction (ii) Administrative Administrative Development Company Committee of Committee District (ii) Luobei County Jiguan Non-Public (ii) Qitaihe Natural Administrative Liyun Investment Scientific and Resources Bureau Committee and Development Technological (iii) Qitaihe Water (ii) Lingdong District Company (Luobei Enterprises Affairs and Water PMO PMO) Demonstration Park Supply Company (iii) Shuangyashan (iii) Hegang Natural (iii) Jixi Lutong (iv) Qitaihe Public Water Supply Resources Bureau Municipal Transportation Company (iv) Hegang Water Engineering Company (iv) Shuangyashan Affairs Bureau Company Municipal Facility (v) Hegang City (iv) Jixi Water Supply Maintenance Center Management and Company (v) Shuangyashan City Administrative Construction PMO Enforcement Bureau

O&M Units O&M Units O&M Units O&M Units

O&M = operation and maintenance, PMO = project management office, PRC = People’s Republic of China. Source: Asian Development Bank.

IV. COSTS AND FINANCING

17. This section describes the project costs, categories, and components to be financed by ADB and the HPG. Loan proceeds will be disbursed per the Loan Disbursement Handbook (2017, as amended from time to time), and subject to the provisions of the loan and project agreements.

18. Costs are itemized below using the following categories: (i) Civil works include contracts for construction and installation of project works and may include provision of related equipment, materials, and supplies. Financed by the ADB loan and with counterpart funds from project cities. (ii) Equipment and goods include procurement contracts for equipment, materials, and supplies. Financed by the ADB loan and with counterpart funds from project cities. (iii) Design, monitoring, evaluation, and supervision include expenditures for engineering and related services to design, implement, and monitor project components. Financed by counterpart funds from project cities. (iv) Land acquisition and resettlement include expenditures for temporary or permanent occupancy of land and associated resettlement activities. Financed by counterpart funds from project cities. (v) Capacity development and project management includes consulting service contracts to provide training and related services required to assure effective implementation of the loan project, increase the professional capacity of staff involved in implementation and subsequent operation of project components, and monitor the implementation and effectiveness of impact mitigation measures for resettlement and environmental impacts. Financed by the ADB loan. (vi) Contingencies (physical) include budgetary provision to cover unexpected costs and cost overruns. Financed by counterpart funds from project cities. (vii) Contingencies (price) includes budgetary provision to cover inflationary increases in costs. Financed by counterpart funds from project cities. (viii) Financial charges during implementation include commitment charges and interest during the implementation period. Financed by the ADB loan for the current project and by the government for the additional financing.

19. The above cost categories include taxes, duties, transport, and insurance costs.

A. Cost Estimates Preparation and Revisions

20. Capital costs and project operation and maintenance (O&M) costs were provided in the feasibility study report (FSR) prepared on behalf of the PMOs by project design institutes, in consultation with the implementing agencies and project preparatory technical assistance consultants. Costing was completed using government costing standards, and information from site investigations, design institute project files, and queries with suppliers.

21. Cost revisions during implementation will be prepared by the implementing agencies and their contractors.

B. Key Assumptions

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

(i) Exchange rate: CNY6.910 = $1.00 (as of 7 June 2019). $1.00 = €0.8929 (as of 9 August 2019)

(ii) Price contingencies based on expected cumulative inflation over the implementation period as follows:

Table 11: Escalation Rates for Price Contingency Calculation (%) Item 2017 2018 2019 2020 2021 2022 Average Foreign rate of price inflation 1.40 1.50 1.50 1.50 1.60 1.60 1.52 Domestic rate of price inflation 2.00 1.90 1.90 1.80 2.00 2.00 1.93 a World Bank Manufacturer’s Unit Value (MUV) Index, July 2014. b ADB. 2016. Asian Development Outlook 2016 Update: Meeting the Low-Carbon Growth Challenge. Highlights. Manila. Source: Asian Development Bank estimates.

(iii) There are no in-kind contributions.

1. Investment and Financing Plans

23. The overall project is estimated to cost $1,011.0 million equivalent (Table 12). The amount was reduced from $1,021.0 million after an update of foreign exchange rates and because the interest cost will be lower if the total loan amount is lower. Detailed cost estimates by expenditure category and by financier are in tables 14 and 16. The major expenditure items for the overall project are civil works, procurement and installation of equipment, FIC costs, and consulting services. Additional financing will help finance outputs 3, 4, and 5.

Table 12: Project Investment Plan Additional Overall Current Additional Financing Projectb Amounta Financing ($ million ($ million Item ($ million) (€ million) equivalent) equivalent) A. Investment Project Components—Base Costc 1. Output 1: Capacity for BDS and integrated 14.3 0.0 0.0 14.3 project planning and management developed 2. Output 3: Key infrastructure and facilities for 144.0 54.0 60.5 143.8 SMEs in non-coal industrial parks constructed 3. Output 4: Remediation and environmental 23.9 5.9 6.6 23.8 cleanup from mining impacts improved 4. Output 5: Integrated urban infrastructure and 504.8 103.0 115.3 504.0 services improved Subtotal (A) 687.0 162.9 182.4 685.9 B. Financial Intermediation Component 1. Output 2: Sustainable investment in SMEs and access to finance in project cities improved (i) Subprojects through cofinancing loans 48.0 0.0 0.0 48.0 (ii) Subprojects through cash collateral facility 160.0 0.0 0.0 160.0 (iii) Subprojects through entrusted loans 24.0 0.0 0.0 24.0 Subtotal (B) 232.0 0.0 0.0 232.0 C. Contingenciesd 71.6 15.2 17.0 66.3 D. Financing Charges During Implementatione 30.4 9.4 10.6 26.8 Total (A+B+C+D) 1,021.0 187.5 210.0 1,011.0f BDS = business development services, SMEs = small and medium-sized enterprises. a Refers to the original amount. b Includes taxes and duties of $28.92 million financed from ADB loan resources. Such amount does not represent an excessive share of the project cost. The government will finance taxes and duties of $11.17 million through cash contribution. c In mid-2016 prices as of 23 April 2017.

d Physical contingencies computed at 4.00% for civil works; and for field research and development, training, surveys, and studies. Price contingencies computed at 1.52% on foreign exchange costs and 1.93% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. No contingencies are included for the financial intermediation component. e Includes interest and commitment charges that are calculated conservatively. Interest during construction for a regular OCR loan has been computed at the 5-year United States dollar fixed swap rate plus an effective contractual spread of 0.50% and maturity premium of 0.10%. Commitment charges for a regular OCR loan are 0.15% per year charged on the undisbursed loan amount. f The amount was reduced from $1,021.0 million after an update of foreign exchange rates and because the interest cost will be lower if the total loan amount is lower. Source: Asian Development Bank estimates.

24. The government has requested a regular loan of €133.929 million ($150 million equivalent) from ADB’s ordinary capital resources to help finance the project. The additional financing will fund part of the gap of $220 million programmed as cofinancing by EIB for the current project. Given the lower total cost, the balance will be €53.6 million ($60 million equivalent), to be financed by the government. The additional financing will be fully synchronized with the current loan, with the same loan closing and debt service dates, and will have a 23.5-year term, including a grace period of 3.5 years; an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility; a commitment charge of 0.15% per year; and such other terms and conditions set forth in the draft loan and project agreements. Based on the straight-line method, the average maturity is 13.75 years, and the maturity premium payable to ADB is 0.10% per year. The financing plan is in Table 13.

Table 13: Financing Plan Currenta Additional Financing Overall Project Share of Amount Share Amountb Share Amount Total Amount ($ million of Total ($ million of Total Source ($ million) (%) (€ million) equivalent) (%) equivalent) (%) A. Investment Project Components 1. ADB OCR 254.0 24.9 133.9 150.0 71.4 404.0 40.0 (regular loan)c 2. EIB loand 220.0 21.5 0.0 0.0 0.0 0.0 0.0 3. Governmente 315.0 30.9 53.6 60.0 28.6 375.0 37.1 Subtotal (A) 789.0 77.3 187.5 210.0 100.0 779.0 77.1 B. Financial Intermediation Componentf 1. ADB OCR 56.0 5.5 0.0 0.0 0.0 56.0 5.5 (regular loan) 2. Domestic 106.4 10.4 0.0 0.0 0.0 106.4 10.5 commercial banks 3. Subborrowers 69.6 6.8 0.0 0.0 0.0 69.6 6.9 Subtotal (B) 232.0 22.7 0.0 0.0 0.0 232.0 22.9 Total (A+B) 1,021.0 100.0 187.5 210.0 100.0 1,011.0 100.0 ADB = Asian Development Bank, EIB = European Investment Bank, OCR = ordinary capital resources. a Refers to the original amount. b The amount was reduced from $1,021.0 million after an update of foreign exchange rates and because the interest cost will be lower if the total loan amount is lower. c With the additional financing, new total loan amounts were calculated, and the shares of the final total loan amount by city are: (ia) Hegang—$149.05 million equivalent ($93.91 million from current loan plus €49.23 million from additional financing), (iia) Jixi—$87.44 million equivalent ($71.80 million from current loan plus €13.96 million from additional financing), (iiia) Qitaihe—$98.40 million equivalent ($39.54 million from current loan plus €52.55 million from additional financing), and (iva) Shuangyashan—$125.11 million equivalent ($104.75 million from current loan plus €18.18 million from additional financing). d The originally planned EIB cofinancing of the project did not materialize. Table 2, footnote b of the approved report and recommendation of the President indicates that cofinancing is subject to EIB approval. The allocation and withdrawal of loan proceeds items of the current project in the project administration manual (Tables 15a and 15b) were revised to reflect reallocation between cost categories, removing amounts from the ADB–EIB joint cost category.

e The government counterpart amount for each city was recalculated, and increased in accordance with the shares in the reduced total loan amount: (ia) Hegang—$96.04 million equivalent; (iia) Jixi—$71.69 million equivalent; (iiia) Qitaihe—$118.00 million equivalent; and (iva) Shuangyashan—$89.29 million equivalent. f Cofinancing and subborrower counterpart contributions are estimated based on a 70:30 debt–equity structure and agreed cofinancing ratios with the financial intermediaries for the three financial products. Source: Asian Development Bank estimates.

25. The SME financing platform, through the $56.0 million FIC of the current loan, is estimated to leverage $162.4 million in cofinancing and counterpart funding from financial intermediaries and other commercial banks for the first batch of subprojects. Subloan terms are expected to be 3–5 years. After the first batch is repaid, the loan proceeds will be relent to another batch and revolved, with a total estimated leverage investment of $744.8 million over the 15-year FIC repayment period.

26. The government has provided ADB with (i) the reasons for its decision to borrow under ADB’s LIBOR-based lending facility on the basis of these terms and conditions, and (ii) an undertaking that these choices were its own independent decision and not made in reliance on any communication or advice from ADB.

C. Detailed Cost Estimates by Expenditure Category

Table 14: Detailed Cost Estimates by Expenditure Category (CNY million) ($ million equivalent)a Foreign Local Foreign Local % of Total % of Total Item Exchange Currency Total Cost Exchange Currency Total Cost Base Cost Cost A. Investment Costsb 1. Civil works 775.1 2,325.2 3,100.2 112.2 336.5 448.7 65.4 57.6 2. Equipment 242.9 566.8 809.7 35.2 82.0 117.2 17.1 15.0 3. Design, monitoring, and evaluation 0.0 463.0 463.0 0.0 67.0 67.0 9.8 8.6 4. Land acquisition and resettlement 0.0 267.6 267.6 0.0 38.7 38.7 5.6 5.0 5. Capacity development 29.7 69.3 99.0 4.3 10.0 14.3 2.1 1.8 Subtotal(A) 1,047.7 3,691.8 4,739.5 151.6 534.3 685.9 100.0 88.0 B. Contingenciesc 1. Physical 41.9 147.7 189.6 6.1 21.4 27.4 4.0 3.5 2. Price 59.4 209.4 268.8 8.6 30.3 38.9 5.7 5.0 Subtotal(B) 101.3 357.1 458.4 14.7 51.7 66.3 9.7 8.5 C. Financial Charges During Implementationd 0.0 185.2 185.2 0.0 26.8 26.8 3.9 3.4 Total Investment Project Cost (A+B+C)e 1,149.0 4,234.0 5,383.1 166.3 612.7 779.0 113.6 100.0 Note: Numbers may not sum precisely because of rounding. a Based on domestic feasibility study reports. In mid-2016 prices as of 23 April 2017, and at an exchange rate of CNY6.910 to $1, not including the financial intermediation component. b Includes taxes and duties of $28.92 million financed from ADB loan resources. Such amount does not represent an excessive share of project cost. The government will finance taxes and duties of $11.17 million through cash contribution. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and studies. Price contingencies computed at an average of 1.52% on foreign exchange costs and 1.93% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. No contingencies are included for the financial intermediary component. d Includes interest and commitment charges capitalized under the ADB loan. Interest during construction for the OCR loan has been computed at the 5-year United States dollar fixed swap rate plus an effective contractual spread of 0.50% and maturity premium of 0.10%. Commitment charges for the OCR loan are 0.15% per year to be charged on the undisbursed loan amount. e Not including the financial intermediation component. Source: Asian Development Bank estimates.

D. Allocation and Withdrawal of Loan Proceeds

Table 15a: Loan 3613: Allocation and Withdrawal of Loan Proceeds (Summary) Amount Allocated for Percentage and Basis for ADB Financing ($) Withdrawal from the ADB Loan No. Item Category Subcategory Account 1 Works 195,724,294 1A Works (ADB only) 195,724,294 Up to 100.00% of total expenditure claimeda 1B Works (ADB-EIB joint)b 0.00

2 Goods 27,717,766 Up to 100.00% of total expenditure claimeda 3 Project management support 14,339,767 100.00% of total expenditure and capacity development claimed 4 Financial intermediation 56,000,000 100.00% of total expenditure component: Provision of claimed entrusted loan and cash collateralc 5 Interest and commitment charges 16,218,173 100.00% of total amount due Total (ADB) 310,000,000 ADB = Asian Development Bank, EIB = European Investment Bank. a Detailed categories and financing percentages are in Table 15b. b Subject to the condition for withdrawal described in the loan agreement, paragraph 8(a) of Schedule 3 (upon execution of EIB loan agreement). EIB cofinancing of the project did not materialize,and reallocation is requested. c Subject to the condition for withdrawal described in the loan agreement, paragraph 8(b) of Schedule 3 (upon execution of framework cooperation agreements with concerned financial intermediaries and other such terms and conditions as set forth in Schedule 3 of the loan agreement. A letter confirming signing of the framework agreements satisfactory to ADB has been submitted and ADB provided no-objection. The disbursement condition has been met. Source: Asian Development Bank estimates.

Table 15b: Loan 3613: Detailed Allocation and Withdrawal of Loan Proceeds Amount Allocated for Percentage and Basis for ADB Financing ($) Withdrawal from the ADB Loan No. Item Category Subcategory Account 1 Works 195,724,294 1A1 Works Hegang 50,018,591 96.3% of total expenditure claimed

1B1 Works Hegang (ADB-EIB joint)a 0.00

1A2 Works Jixi 44,538,084 69.2% of total expenditure claimed

1B2 Works Jixi (ADB-EIB joint)a 0.00

1A3 Works Qitaihe 21,090,970 90.0% of total expenditure claimed

1B3 Works Qitaihe (ADB-EIB joint)a 0.00

1A4 Works Shuangyashan 80,076,649 80.1% of total expenditure claimed

1B4 Works Shuangyashan (ADB-EIB 0.00 joint)a 2 Goods 27,717,766 2A Goods Hegang 15,689,856 100.00% of total expenditure claimed 100.00% of total expenditure 2B Goods Jixi 11,817,358 claimed

Amount Allocated for Percentage and Basis for ADB Financing ($) Withdrawal from the ADB Loan No. Item Category Subcategory Account 2C Goods Qitaihe 210,552 2.0% of total expenditure claimed Project management support 100.00% of total expenditure 3 14,339,767 and capacity development claimed Financial intermediation component: Provision of 100.00% of total expenditure 4 56,000,000 entrusted loans and cash claimed collateralb 5 Interest and commitment charges 16,218,173 100.00% of total amount due Total (ADB) 310,000,000 ADB = Asian Development Bank, EIB = European Investment Bank. a Subject to the condition for withdrawal described in the loan agreement, paragraph 8(a) of Schedule 3 (upon execution of EIB loan agreement). EIB cofinancing of the project did not materialize and reallocation is requested. b Subject to the condition for withdrawal described in the loan agreement, paragraph 8(b) of Schedule 3 (upon execution of framework cooperation agreements with concerned financial intermediaries and other such terms and conditions as set forth in Schedule 3 of the loan agreement. A letter confirming signing of the framework agreements satisfactory to ADB has been submitted and ADB provided no-objection. The disbursement condition has been met. Source: ADB estimates.

Table 15c: Additional Financing: Allocation and Withdrawal of Loan Proceeds (Summary) Amount Allocated for Percentage and Basis for ADB Financing (€) Withdrawal from the ADB Loan No. Item Category Subcategory Account 1 Works and Goods 133,929,000 Up to 100.00% of total expenditure claimeda Total (ADB) 133,929,000 ADB = Asian Development Bank. a Detailed categories and financing percentages are in Table 15d. Source: Asian Development Bank estimates.

Table 15d: Additional Financing: Detailed Allocation and Withdrawal of Loan Proceeds Amount Allocated for Percentage and Basis for ADB Financing (€) Withdrawal from the ADB Loan No. Item Category Subcategory Account 1 Works and Goods 133,929,000 1A Works Hegang 45,855,000 82.50% of total expenditure claimed 1B Works Jixi 13,965,000 61.40% of total expenditure claimed 1C Works Qitaihe 34,744,000 93.70% of total expenditure claimed 1D Works Shuangyashan 11,792,000 59.20% of total expenditure claimed 1E Goods Hegang 3,379,000 100.00% of total expenditure claimed 1F Goods Qitaihe 17,812,000 100.00% of total expenditure claimed 1G Goods Shuangyashan 6,382,000 100.00% of total expenditure claimed Total (ADB) 133,929,000 133,929,000 ADB = Asian Development Bank. Source: ADB estimates.

E. Detailed Cost Estimates by Financier

Table 16: Detailed Cost Estimates by Financier ADB Loan Additional Financing Counterpart Total Cost Amount Taxes and Amount Amount % of Cost Amount ($ million % of Cost Amount Duties Total % of Cost ($ million Item ($ million) Category (€ million) equivalent) Category ($ million) ($ million) ($ million) Category equivalent) I. Investment Project Componentsa A. Base Costb

1. Civil works: Total 195.7 43.6 106.3 119.1 26.5 129.5 4.4 133.9 29.9 448.7

1A1. Works: Hegang (ADB L3613) 50.0 96.3 0.0 0.0 0.0 1.8 0.1 1.9 3.7 51.9 1A. Works: Hegang (ADB AF) 0.0 0.0 45.8 51.3 82.5 10.5 0.4 10.9 17.5 62.2 1H. Works: Hegang (NBF) 0.0 0.0 0.0 0.0 0.0 33.3 1.0 34.3 100.0 34.3 1A2. Works: Jixi (ADB L3613) 44.5 69.2 0.0 0.0 0.0 19.1 0.7 19.8 30.8 64.3 1B. Works: Jixi (ADB AF) 0.0 0.0 13.9 15.6 61.4 9.5 0.3 9.8 38.6 25.4 1J. Works: Jixi (NBF) 0.0 0.0 0.0 0.0 0.0 10.9 0.4 11.3 100.0 11.3 1A3. Works: Qitaihe (ADB L3613) 21.1 90.0 0.0 0.0 0.0 2.2 0.1 2.3 9.8 23.4 1C. Works: Qitaihe (ADB AF) 0.0 0.0 34.8 38.9 93.7 2.5 0.1 2.6 6.3 41.5 1A4. Works: Shuangyashan (ADB L3613) 80.1 80.1 0.0 0.0 0.0 19.2 0.7 19.9 19.9 100.0 1D. Works: Shuangyashan (ADB AF) 0.0 0.0 11.8 13.2 59.2 8.8 0.3 9.1 40.8 22.3 1K. Works: Shuangyashan (NBF) 0.0 0.0 0.0 0.0 0.0 11.7 0.4 12.1 100.0 12.1

2. Goods: Total 27.7 23.6 27.6 30.9 26.4 51.9 6.7 58.6 50.0 117.2 2A. Goods: Hegang (ADB L3613) 15.7 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.7 1E. Goods: Hegang (ADB AF) 0.0 0.0 3.4 3.8 100.0 0.0 0.0 0.0 0.0 3.8 2B. Goods: Jixi (ADB L3613) 11.8 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 11.8 2C. Goods: Qitaihe (ADB L3613) 0.2 2.0 0.0 0.0 0.0 8.9 1.2 10.1 98.0 10.3 1F. Goods: Qitaihe (ADB AF) 0.0 0.0 17.8 19.9 100.0 0.0 0.0 0.0 0.0 19.9 1L. Goods: Qitaihe (NBF) 0.0 0.0 0.0 0.0 0.0 42.9 5.6 48.5 100.0 48.5 1G. Goods: Shuangyashan (ADB AF) 0.0 0.0 6.4 7.1 100.0 0.0 0.0 0.0 0.0 7.1

Gov-1: Design, monitoring, and evaluation 0.0 0.0 0.0 0.0 0.0 67.0 0.0 67.0 100.0 67.0

Gov-2: Land acquisition and resettlement 0.0 0.0 0.0 0.0 0.0 38.7 0.0 38.7 100.0 38.7 3. Project management support and capacity

development (ADB L3613) 14.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 14.3

Subtotal (A) 237.8 34.6 133.9 150.0 21.9 287.1 11.2 299.1 43.5 685.9 B. Contingenciesc 0.0 0.0 0.0 0.0 0.0 66.3 0.0 66.3 100.0 66.3 C. Financial Charges during Implementationd 16.2 60.5 0.0 0.0 0.0 10.6 0.0 10.6 39.5 26.8 Total Investment Project Cost (I=A+B+C)e 254.0 32.6 133.9 150.0 19.2 364.0 11.2 375.0 48.2 779.0 II. Financial Intermediation Component Provision of entrusted loans and cash collateral 56.0 24.1 0.0 0.0 0.0 176.0 0.0 176.0 75.9 232.0 Grand Total (I+II) 310.0 30.7 133.9 150.0 14.8 540.0 11.2 551.0 54.5 1,011.0 Note: Numbers may not sum precisely because of rounding. ADB = Asian Development Bank, ADB L3613 = ADB Loan 3613 (ongoing loan), ADB AF = ADB additional financing, NBF = nonbank financing.

a Based on domestic feasibility study reports. In mid-2016 prices as of 23 April 2017, and at an exchange rate of CNY6.910 to $1, not including the financial intermediation component. Counterpart is the government. b Includes taxes and duties of $28.92 million. Such amount does not represent an excessive share of project cost. The government will finance taxes and duties of $11.17 million through cash contribution. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and studies. Price contingencies computed at an average of 1.52% on foreign exchange costs and 1.93% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. No contingencies are included for the financial intermediary component. d Includes interest and commitment charges capitalized under the ADB loan. Interest during construction for the OCR loan has been computed at the 5-year United States dollar fixed swap rate plus an effective contractual spread of 0.50% and maturity premium of 0.10%. Commitment charges for the OCR loan are 0.15% per year to be charged on the undisbursed loan amount. e Not including the financial intermediation component. Source: ADB estimates.

F. Detailed Cost Estimates by Outputs

Table 17: Detailed Cost Estimates by Outputsa ($ million equivalent) Output 1: Output 3: Output 4: Output 5: Capacity in business Key infrastructure and Remediation and Integrated urban development services SME facilities in non- environmental infrastructure and and integrated project coal industrial parks cleanup from mining services improved planning and constructed impacts improved management developed Total % of Cost % of Cost % of Cost % of Cost Item Cost Amount Category Amount Category Amount Category Amount Category A. Investment Costsb 1. Civil works 448.7 0.0 0.0 90.2 20.1 20.9 4.7 337.5 75.2 2. Equipment 117.2 0.0 0.0 18.9 16.2 0.0 0.0 98.2 83.8 3. Design, monitoring, and evaluation 67.0 0.0 0.0 13.5 20.2 2.9 4.3 50.6 75.6 4. Land acquisition and resettlement 38.7 0.0 0.0 21.2 54.6 0.0 0.0 17.6 45.4 5. Capacity development 14.3 14.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Subtotal (A) 685.9 14.3 2.1 143.8 21.0 23.8 3.5 504.0 73.5 B. Contingenciesc 66.3 1.4 2.2 13.1 19.7 2.2 3.3 49.6 74.8 C. Financial Charges During 26.8 0.9 3.5 7.2 26.7 1.3 5.0 17.4 64.8 Implementationd Total Investment Project Cost (A+B+C)e 779.0 16.7 2.1 164.0 21.1 27.3 3.5 571.0 73.3 SMEs = small and medium-sized enterprises. Note: Numbers may not sum precisely because of rounding. a Based on domestic feasibility study reports. In mid-2016 prices as of 23 April 2017, and at an exchange rate of CNY6.910 to $1, not including the financial intermediation component. b Includes taxes and duties of $28.92 million. Such amount does not represent an excessive share of project cost. The government will finance taxes and duties of $11.17 million through cash contribution. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and studies. Price contingencies computed at an average of 1.52% on foreign exchange costs and 1.93% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. No contingencies are included for the financial intermediary component. d Includes interest and commitment charges capitalized under the ADB loan. Interest during construction for the OCR loan has been computed at the 5-year United States dollar fixed swap rate plus an effective contractual spread of 0.50% and maturity premium of 0.10%. Commitment charges for the OCR loan are 0.15% per year to be charged on the undisbursed loan amount. e Not including the financial intermediation component. Source: ADB estimates.

G. Detailed Cost Estimates by Year

Table 18: Detailed Cost Estimates by Yeara ($ million equivalent) Total Cost 2022 2018 2019 2020 2021 Item A. Investment Costsb 1. Civil works 448.7 7.7 123.1 186.5 109.1 22.1 2. Equipment 117.2 0.3 27.2 75.2 14.5 0.0 3. Design, monitoring, and evaluation 67.0 13.4 13.4 13.4 13.4 13.4 4. Land acquisition and resettlement 38.7 13.6 13.6 11.6 0.0 0.0 5. Capacity development 14.3 0.4 3.8 5.6 2.3 2.3 Subtotal (A) 685.9 35.3 181.1 292.3 139.3 37.8 B. Contingenciesc 66.3 2.1 14.2 28.4 16.3 5.3 C. Financial Charges During Implementationd 26.8 0.0 2.0 5.6 9.0 10.3 Total Project Cost (A+B+C)e 779.0 37.5 197.3 326.3 164.6 53.4 % Total Project Cost 100.0 4.8 25.3 41.9 21.1 6.9 Note: Numbers may not sum precisely because of rounding. a Based on domestic feasibility study reports. In mid-2016 prices as of 23 April 2017, and at an exchange rate of CNY6.910 to $1, not including the financial intermediation component. b Includes taxes and duties of $28.92 million. Such amount does not represent an excessive share of project cost. The government will finance taxes and duties of $11.7 million through cash contribution. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and studies. Price contingencies computed at an average of 1.52% on foreign exchange costs and 1.93% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. No contingencies are included for the financial intermediary component. d Includes interest and commitment charges capitalized under the ADB loan. Interest during construction for the OCR loan has been computed at the 5-year United States dollar fixed swap rate plus an effective contractual spread of 0.50% and maturity premium of 0.10%. Commitment charges for the OCR loan are 0.15% per year to be charged on the undisbursed loan amount. Source: ADB estimates.

H. Contract and Disbursement S-curve

Loan 3613: ($ million)

Contract Awards Disbursement Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total 2018 0.0 0.0 0.0 22.9 22.9 0.0 0.0 0.0 20.1 20.1 2019 0.0 0.0 0.0 58.9 58.9 0.0 9.7 0.0 10.3 20.0 2020 0.0 0.0 0.0 52.3 52.3 0.0 0.0 10.0 35.0 45.0 2021 20.2 20.3 0.0 45.0 85.5 0.0 0.0 20.0 50.0 70.0 2022 22.0 0.0 18.9 0.0 40.9 0.0 0.0 20.0 50.0 70.0 2023 0.0 0.0 16.2 0.0 16.2 0.0 28.9 0.0 0.0 28.9 Total 237.8 254.0 Note: Disbursements include capitalized amounts of interest for Asian Development Bank during construction and commitment fees. Original contract awards and disbursement targets (baseline projections) starting at effectiveness can only be revised during midterm review, after approval of major change, or approval of an extension of project duration of at least 12 months. Not including the financial intermediation component, see Project Administration Manual (Section B). Source: Asian Development Bank estimates.

300.00

250.00

200.00

150.00 Contract Awards

Disbursement

100.00

50.00

- Q1/2018 Q2/2018 Q3/2018 Q4/2018 Q1/2019 Q2/2019 Q3/2019 Q4/2019 Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 Q3/2021 Q4/2021 Q1/2022 Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023 Q3/2023 Q4/2023

Additional Financing: ($ million equivalent)

Contract Awards Disbursement Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total 2019 0.0 0 .0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2020 0.0 28.1 5.8 52.6 86.5 0.0 0.0 0.0 13.7 13.7 2021 21.3 0.0 0.0 19.5 40.8 0.0 0.0 16.3 21.5 37.8 2022 16.5 6.2 0.0 0.0 22.7 0.0 0.0 21.1 31.8 52.9 2023 0.0 0.0 0.0 0.0 0.0 16.7 28.9 0.0 0.0 45.6 Total 150.00 150.00 Note: Original contract awards and disbursement targets (baseline projections) starting at effectiveness can only be revised during midterm review, after approval of major change, or approval of an extension of project duration of at least 12 months. Not including the financial intermediation component, see Project Administration Manual (Section B). Source: Asian Development Bank estimates.

160.00

140.00

120.00

100.00 Contract Awards

80.00 Disbursement

60.00

40.00

20.00

0.00 Q4/2019 Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 Q3/2021 Q4/2021 Q1/2022 Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023 Q3/2023 Q4/2023 Q1/2024 Q2/2024 Q3/2024 Q4/2024

I. Fund Flow Diagram

（Direct Payment) ADB

Loan Reimbursement Ministry of Finance, PRC / Advance Account Relending Procedure

Heilongjiang Provincial Government (Provincial Bureau of Finance) a ADB Loan Advance Accounts

Repayment Onlending

Four Project Cities Municipal Governments (Municipal Bureaus of Finance) (Hegang, Jixi, Qitaihe, Shuangyashan) and their PMOs

PIUs,

Industrial Park Management Offices, Water Affairs Bureaus, Housing Bureaus, Transportation Bureaus

Contractors, Suppliers, and Consultants

Loan, Relending, Claim for Payment/

Onlending Withdrawal Application

Repayment Payment

a In addition to the advance account for the current project, a separate account (i.e., in the form of a subledger) will be established and managed for the additional financing. A separate subledger for the current project is for the FIC. ADB = Asian Development Bank, FIC = financial intermediation component, PIU = project implementation unit, PMO = project management office, PRC = People’s Republic of China. Source: Asian Development Bank.

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

27. The financial management assessment (FMA) was conducted in September 2016 in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects and the Financial Due Diligence: A Methodology Note. 12 The FMA considered the financial management capacity of HPG—the project executing agency—and the four implementing agencies: (i) HMG, (ii) JMG, (iii) QMG, and (iv) SMG. The assessment covered funds-flow arrangements, staffing, accounting and financial reporting systems, financial information systems, and internal and external auditing arrangements. 13 A separate FMA was carried out for the financial intermediation component and is provided in PAM Section B: Financial Intermediation Component and Business Development Services Component.

28. Based on the assessment, the key financial management risks identified are (i) implementation risk: lack of familiarity with ADB disbursement procedures and requirements, which could delay project implementation; (ii) compliance risk: lack of familiarity with ADB financial management requirements, particularly on accounting, reporting, and auditing, which may delay project reporting and detailed identification of issues on the use of loan proceeds; (iii) financing risk: delays in provision of or inadequate counterpart funding which could delay project implementation. It is concluded that the overall premitigation financial management risk of the project executing agency and implementing agencies is moderate. The executing agency and implementing agencies have agreed to implement an action plan as key measures to address deficiencies.

29. The identified financial management risks and the implementation of agreed mitigation measures will need to be closely monitored during project implementation. The financial management action plan is provided in Table 19.

Table 19: Proposed Action Plan for Financial Management Action Responsibility Timing 1. Training on ADB disbursement Executing agency/HDRC/HFD/ Completed during ADB inception procedures and requirements implementing agencies/ADB mission in November 2018 2. Training on ADB financial Executing agency/HDRC/HFD/ Completed during ADB inception management requirements, Heilongjiang Provincial Audit Office/ mission and further trainings will be including accounting and auditing, implementing agencies/ADB carried out by the project foreign exchange and interest rate implementation consultant risk management 3. Recruitment of experienced Executing agency/HDRC/ Consultant recruitment is being consultants and skilled implementing agencies completed accountants to enhance operational capacities 4. Development of financial Executing agency/HFD/ Will be carried out with the help of the management manuals implementing agencies/municipal consultant in 2019 finance bureaus

12 ADB. 2005. Financial Management and Analysis of Projects. Manila; ADB. 2009. Financial Due Diligence: A Methodology Note. Manila; ADB. 2015. Financial Management Technical Guidance Note: Financial Management Assessment. Manila. 13 The instrument used for the assessment is the financial management assessment questionnaire found in the ADB. 2015. Financial Management Technical Guidance Note: Financial Management Assessment. Manila; with consideration of the ADB. 2016. Country Partnership Strategy: People's Republic of China, 2016–2020. Manila; and the PRC’s Country Governance Risk Assessment (October 2015).

Action Responsibility Timing 5. Close monitoring to timely identify Executing agency/HFD/ Carried out during ADB inception potential issues in counterpart implementing agencies/municipal mission and planned for all future funding finance bureaus/ADB ADB review missions 6. Discussion on possible Executing agency/HDRC/HFD/ Tariff review is planned in 2019 ADB interventions to review tariff implementing agencies/ review mission and in following years structure and identify strategy for municipal finance bureaus/ tariff reforms PIUs/ADB 7. Reinforce ongoing support in Executing agency/HFD/ Carried out during project inception assessing and strengthening implementing agencies/municipal mission in November 2018, and project financial management finance bureaus/ADB planned for all future ADB review capacity at subprovincial levels mission through skills training (accounting and reporting), knowledge sharing (accrual accounting and risk- based internal control), and organizational reviews (internal audit) ADB = Asian Development Bank, HDRC = Heilongjiang Development and Reform Commission, HFD = Heilongjiang Finance Department, PIU = project implementation unit. Source: Asian Development Bank.

30. The project’s financial management arrangements with appropriate mitigation measures are considered satisfactory.

B. Disbursement

Summary (i) Direct payment procedures for large contracts. (ii) Reimbursement procedures for eligible expenditures incurred and paid for by the government out of its budget allocation or its own resources. (iii) Advance accounts (a) The advance accounts will be established and maintained by Heilongjiang Finance Department (HFD), on behalf of Heilongjiang Provincial Government (HPG), after the loan becomes effective; (b) HPG will be responsible for the proper use, management, replenishment, and liquidation of the advance accounts; (c) The advance accounts will be exclusively used to finance ADB’s share of eligible expenditures; and (d) The outstanding advance (initial and additional advances) to the advance accounts should not exceed the executing agency’s estimate of ADB’s share of eligible expenditures for the next 6 months, which are to be paid through the advance accounts.

1. Disbursement Arrangements for Asian Development Bank Funds

31. The loan proceeds of the current and proposed additional financing will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time),14 and detailed arrangements agreed upon between the government and ADB. Online training for project staff on disbursement policies and procedures is available.15 Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control.

14 ADB. 2017. Loan Disbursement Handbook. Manila. Available electronically from the ADB website (http://www.adb.org/documents/ loan-disbursement-handbook). 15 Disbursement eLearning: http://wpqr4.adb.org/disbursement_elearning

32. The implementing agencies will be responsible for all disbursement arrangements for expenditures related to the implementation of subcomponents, including (i) preparing disbursement projections, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) preparing withdrawal applications that will be submitted to ADB by HFD.

33. Each year, the required amount of counterpart funding is allocated by HFD and disbursed upon request from the implementing agencies. For ADB’s loan proceeds, withdrawal applications to ADB will be prepared by the PMO of each city on behalf of HFD. At the end of each year, realistic projections of contract awards and/or commitments and disbursement for the following calendar year will be made for an assessment and projection of ADB funds required to cover contract awards and/or commitments and disbursements for the ongoing loan. The PMOs will be responsible for preparing contract award/commitment and disbursement projections each year.

34. Direct payment procedure will generally be used for large civil works, equipment contracts, and consulting service contracts. The reimbursement procedure will be used as appropriate when the government initially funds ADB eligible expenditures from its own resources.

35. Advance fund procedure. HFD will establish a Euro-denominated advance account for the additional financing loan promptly after loan effectiveness of such loan at a commercial bank. The currency of such advance account is the Euro. The Euro-denominated advance account and the advance account for the current loan are to be used exclusively for ADB’s share of eligible expenditures. The HFD who administers the advance accounts is accountable and responsible for proper use of advances to the advance accounts. If at any time the current loan and the additional financing are in the same currency, the advance account for that currency may be used as the joint advance account for the two Project loans, provided that ledger subaccounts are maintained for each loan.

36. The total outstanding advances to the advance accounts should not exceed the estimate of ADB’s share of expenditures to be paid through the advance accounts for the forthcoming 6 months. The HFD may request for initial and additional advances to the advance accounts based on an Estimate of Expenditure Sheet 16 setting out the estimated expenditures to be financed through the accounts for the forthcoming 6 months. Supporting documents should be submitted to ADB or retained by the borrower (HFD) in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time) when liquidating or replenishing the advance accounts.

37. Statement of expenditure procedure. The SOE procedure may be used for reimbursement of eligible expenditures or liquidation of advances to the advance accounts. Supporting documents and records for the expenditures claimed under the SOE should be maintained and made readily available for review by ADB's disbursement and review missions, upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit.

38. Before the submission of the first withdrawal application (WA), the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the government, together with the authenticated specimen signatures of each authorized person. The minimum value per WA is stipulated in the Loan Disbursement

16 Estimate of Expenditure sheet is available in Appendix 8A of ADB’s Loan Disbursement Handbook (2017, as amended from time to time).

Handbook (2017, as amended from time to time). Individual payments below such amount should be paid (i) by the implementing agencies and subsequently claimed to ADB through reimbursement, or (ii) through the advance fund procedure, unless otherwise accepted by ADB. The borrower should ensure sufficient category and contract balances before requesting disbursements. Use of ADB’s Client Portal for Disbursements (CPD)17 system is encouraged for submission of withdrawal applications to ADB.

39. Cost categories "ADB–EIB joint" for current loan, i.e., 1B, 1D, 1F, and 1H as described in Tables 15a and 15b and in the attachment to schedule 3 of the loan agreement have been set to zero and amounts have been reallocated to the corresponding categories and subcatergories following EIB's cofinancing of the project did not materialize.

2. Disbursement Arrangements for Counterpart Fund

40. For the counterpart funds, the implementing agencies will allocate the designated funding for the project as specified in the loan and project agreements. Counterpart funds from the government will be disbursed and liquidated by the implementing agencies to contractors and service providers. Disbursement will follow this process: (i) according to the progress of the contract, the project implementing units will submit disbursement requests to the respective project management office; and (ii) once approved, counterpart funds will be disbursed from the respective municipal finance bureau.

C. Accounting

41. The HFD and each implementing agency will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the project. The HFD and each implementing agency will prepare consolidated project financial statements in accordance with the government's accounting laws and regulations which are consistent with international accounting principles and practices.18

D. Auditing and Public Disclosure

42. The HFD will cause the detailed consolidated project financial statements for the overall project and indicating separate accounts, that may be in the form of subledgers for the current loan and the additional financing (the two accounts/subledgers principle applies to both the executing agency and also to the implementing agencies, the four municipal governments), to be audited in accordance with International Standards on Auditing and/or equivalent national standards adopted by the PRC, by an independent auditor acceptable to ADB. The audited project financial statements together with the auditor’s opinion will be presented in the English language to ADB within 6 months from the end of the fiscal year by the HFD.

43. The audited entity financial statements, together with the auditor’s report and management letter, will be submitted in the English language to ADB within 1 month after their approval by the relevant authority.

17 The CPD facilitates online submission of WA to ADB, resulting in faster disbursement. The forms to be completed by the Borrower are available online at https://www.adb.org/documents/client-portal-disbursements-guide. 18 Applicable laws, regulations, and guidelines include the (i) Accounting Law of the PRC (2000); (ii) State-Owned Construction Enterprise Accounting Control Regulations; (iii) Capital Construction Financial Control Regulations; and (iv) Accounting Methods of Projects Financed by the World Bank (reference No. 2000 [13]), an accounting regulation issued by the Ministry of Finance for all foreign aid-funded projects.

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

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

46. The government, HFD and implementing agencies have been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements.19 ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the borrower), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures.

47. Public disclosure of the audited project financial statements, including the auditor’s opinion on the project financial statements, will be guided by ADB’s Access to Information Policy.20 After the review, ADB will disclose the audited project financial statements and the opinion of the auditors on the project financial statements no later than 14 days of ADB’s confirmation of their acceptability by posting them on ADB’s website. The management letter, additional auditor’s opinions, and audited entity financial statements will not be disclosed.21

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

48. All advance contracting and retroactive financing should be undertaken in conformity with ADB’s Procurement Guidelines (2015, as amended from time to time)22 and ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).23 The issuance of invitations for bids under advance contracting and retroactive financing will be subject to ADB approval. The

19 ADB’s approach and procedures regarding delayed submission of audited project financial statements: (i) When audited project financial statements are not received by the due date, ADB will write to the executing agency advising that (a) the audit documents are overdue; and (b) if they are not received within the next 6 months, requests for new contract awards and disbursement such as new replenishment of advance accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed. (ii) When audited project financial statements are not received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement such as new replenishment of advance accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (a) inform the executing agency of ADB’s actions; and (b) advise that the loan may be suspended if the audit documents are not received within the next 6 months. (iii) When audited project financial statements are not received within 12 months after the due date, ADB may suspend the loan. 20 Access to Information Policy: https://www.adb.org/documents/access-information-policy 21 This type of information would generally fall under public communications policy exceptions to disclosure. ADB. 2018. Access to Information Policy. Paragraph 17(iv–vi). 22 ADB. 2015. Procurement Guidelines. https://www.adb.org/documents/procurement-guidelines 23 ADB. 2013. Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers. Manila. https://www.adb.org/documents/guidelines-use-consultants-asian-development-bank-and-its-borrowers

borrower, HPG and implementing agencies have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the project.

49. Advance contracting. Advance contracts to be entered into may include goods, works, and consulting services contract packages. The steps to be concluded in advance may include (i) tendering, and bid evaluation for civil works packages; (ii) preparation of tender documents to procure materials and equipment; (iii) evaluation of bids; and (iv) recruitment of consultants. All other ADB policy requirements apply, i.e., safeguards compliance and others that are included in the loan agreement and/or project agreement.

50. Retroactive financing. The HPG and the four implementing agencies were advised that retroactive financing may only apply up to the maximum amount of the equivalent of 20% of the total ADB loan, to cover eligible expenditures incurred (works, goods, and consulting services) procured through advance contracting before loan effectiveness, but not more than 12 months before the signing of the loan agreement.

B. Procurement of Goods, Works, and Consulting Services

51. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines (2015, as amended from time to time).

52. Before the start of any procurement, ADB and the government will review the public procurement laws of the PRC Government and HPG to ensure consistency with ADB’s Procurement Guidelines.

53. An 18-month procurement plan indicating goods, works, and consulting service contract packages and expected contract preparation and implementation timeline is in section C below.

54. International competitive bidding (ICB) will be used for civil works contracts estimated to cost over $40 million. National competitive bidding (NCB) will be used for civil works contracts estimated to cost over $100,000 up to $40 million. For goods and equipment, ICB will be used for contracts valued at above $5 million, while NCB will be used for goods and equipment from over $100,000 up to $5 million. For the first civil works and goods contracts to be procured through NCB, and for contracts estimated to be equal or above $10 million, the draft procurement documents in English (prequalification, invitations for bids, bidding documents, bid evaluation reports, draft negotiated contracts, and signed contracts) should be submitted for ADB prior review and approval regardless of the estimated contract amount. Subsequent procurement through NCB are subject to post review.

55. All consultants financed by ADB will be recruited according to ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).24 An estimated total of 1,004 person- months (107 international, 897 national) of consulting services are required to (i) support project management, monitoring, progress reporting, institutional strengthening, and capacity development for green city and integrated infrastructure planning, implementation, and operation; (ii) provide business development services capacity development for SMEs; (iii) conduct external resettlement and social, and environment safeguards monitoring and reporting; (iv) advise on initial project implementation start-up support including project management and procurement; and (v) conduct nonrevenue water reduction pilot capacity building to complement the water

24 Checklists for actions required to engage consultants by method available in e-Handbook on Project Implementation at http://www.adb.org/documents/handbooks/project-implementation

supply component in Qitaihe. The consultants’ terms of reference for consulting services are in section D.

56. Implementing agencies will engage qualified national consultants and design institutes by self-funding for preliminary and detailed design, construction supervision, and quality inspection. The HPG on behalf of the implementing agencies will engage a tendering agency, with previous experience from ADB and/or World Bank project procurement to support all project-related procurement activities.

57. For all civil works contracts and goods/installation contracts, separate service contracts for quality control and site supervision will be procured by the local governments independent of the civil works or goods/installation contracts using country procurement system requirements.

C. Procurement Plan

Project Name: Heilongjiang Green Urban and Economic Revitalization Project Country: People’s Republic of China Executing Agency: Heilongjiang Provincial Government Project Procurement Classification: B Implementing Agencies: Hegang Municipal Government, Jixi Municipal Government, Qitaihe Municipal Government, and Shuangyashan Municipal Government Procurement Risk: Moderate Project Financing Amount: US$1,011,000,000 Project Closing Date: 31 August 2023 ADB Financing: US$460,000,000 Non-ADB Financing: US$551,000,000 Date of First Procurement Plan: 28 April 2017 Date of this Procurement Plan: 3 July 2019

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

a. Procurement and Consulting Methods, and Thresholds

58. Except as ADB may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Method Threshold Comments International competitive > $40,000,000 Invitation for bids, bidding documents, and bid evaluation bidding for civil works and recommendation for contract awards will be subject to ADB’s prior review. International competitive > $5,000,000 Invitation for bids, bidding documents, and bid evaluation bidding for goods and recommendation for contract awards will be subject to ADB’s prior review. National competitive > $100,000 and =< The first NCB procurement documents for works, and all bidding for civil works $40,000,000 subsequent ones with an estimated contract value equal or above $10,000,000, should be submitted for prior ADB review and approval. Subsequent NCB procurement documents that are estimated below $10,000,000 will be subject to post review. National competitive > $100,000 and =< The first NCB procurement documents for goods should be bidding for goods $5,000,000 submitted for prior ADB review and approval. Subsequent NCB procurement documents will be subject to post review. Shopping for civil works =< $100,000 Post review Shopping for goods =< $100,000 Post review ADB = Asian Development Bank, NCB = national competitive bidding.

Method Comments Quality- and cost-based Five submissions: (i) shortlist, (ii) technical evaluation, (iii) financial evaluation and selection overall ranking of proposals, (iv) draft negotiated contract, and (v) signed contract. Use of this method is subject to ADB Guidelines on the Use of Consultants (2013, as amended from time to time), and paragraph 47 of ADB’s Project Administration Instructions 2.03. Consultants’ Four submissions: (i) evaluation of expressions of interest and request for proposals, qualifications selection (ii) technical and financial evaluation, (iii) draft negotiated contract, and (iv) signed contract. Use of this method is subject to ADB Guidelines on the Use of Consultants (2013, as amended from time to time), and paragraph 52 of ADB’s Project Administration Instructions 2.03. Individual consultant Two submissions: (i) proposal for engagement of consultant, including shortlist; and selection (ii) signed contract. Use of this method is subject to ADB Guidelines on the Use of Consultants (2013, as amended from time to time), and paragraph 10 of ADB’s Project Administration Instructions 2.03. ADB = Asian Development Bank.

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

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

Review Estimated [Prior / Package Value Procurement Post/Post Bidding Advertisement Number General Description ($ million) Method (Sampling)] Procedure Date (quarter/year) Comments Hegang Goods HG-G3 Civil works and equipment 14.24 ICB Prior 1S1E Q1/2020 Loan 3613 installation for Hegang Luobei County high-tech graphite- based materials and e-mobility industrial park WWTP HG-G1 ITS intelligent signal control 3.79 NCB Prior 1S1E Q2/2019 Loan 3613 system and other facilities, maintenance vehicles and equipment for bus operation (Package 2) Works HG-MR-W4 Lingbei Kuangnan open pit 6.46 NCB Post 1S1E Q3/2019 Package with mine geological 3 lots Loan environmental remediation 3613

HG-RR- Civil works for Hegang river 38.57 NCB Prior 1S1E Q3/2019 Package with W5A rehabilitation and cleanup for 2 lots Loan Shitou River 2.1 km; Xiaoheli 3613 River 6.75 km increasing flood protection to 1 in 50 years for climate proofing to 1 in 50 years HG-RR- Civil works for Hegang river 21.00 NCB Prior 1S1E Q4/2020 Package with W5B rehabilitation and cleanup for 2 lots Qianjin Creek 3.3 km; and Additional Heli River (start point of Heli Financing River to Junde Bridge to Gas Station 7.85 km increasing flood protection to 1 in 50 years

Review Estimated [Prior / Package Value Procurement Post/Post Bidding Advertisement Number General Description ($ million) Method (Sampling)] Procedure Date (quarter/year) Comments HG-DH-W8 Civil works for district heating 7.12 NCB Post 1S1E Q4/2019 Additional system pipe retrofit (primary Financing and secondary pipes replacement in 2019) HG-IT-W10 Road rehabilitation, public, 14.85 NCB Post 1S1E Q2/2019 Package with and non-motorized transport 3 lots Loan improvements: bus lanes 3613 works, roads resurfacing, bus bays, new drain pipes and intersections; and ITS works (Qizhong Road, Caifu Road, Donggang Road, Nanyi Road, Tiexi Road, Xinhe Road, Yucai Road, Hongjun Road, North Hongqi Road, South Hongqi Road and Gongnong Road) HG-IT-W11 Road rehabilitation, public, 10.12 NCB Post 1S1E Q4/2019 Loan 3613 and non-motorized transport improvements: bus lanes works, roads resurfacing, bus bays, new drain pipes and intersections; and ITS works (Old Jieji area upgrade, Meicheng Road, East Inner Ring Road, West Inner Ring Road, and Xuefu Road) HG-IT-W12 Road rehabilitation, public, 5.89 NCB Post 1S1E Q3/2020 Loan 3613 and non-motorized transport improvements: bus lanes works, resurfacing, bus bays, new drain pipes and intersections; and ITS works (East Jiefang Road Erdaojie Extension, New Jieji Area upgrade, Xiangyang Road, Old Jieji Road, and East Jiefang Road Sidaojie)

Review Estimated [Prior / Package Value Procurement Post/Post Bidding Advertisement Number General Description ($ million) Method (Sampling)] Procedure Date (quarter/year) Comments Jixi Goods JX-G1 Jiguan District industrial park 4.73 NCB Post 1S1E Q3/2019 Loan 3613 WWTP equipment and installation JX-G2 Jixi No. 3 WTP upgrading and 6.57 NCB Post 1S1E Q3/2019 Equipment in expansion equipment and this package is installation similar to JX-G1 package and locally available, Loan 3613 Works JX-JG-W2 Civil works for Jiguan District 9.16 NCB Post 1S1E Q3/2019 Loan 3613 industrial park WWTP and sewer pipe network JXHS-MR- Civil works for Hengshan 9.11 NCB Post 1S1E Q3/2019 Loan 3613 W3 District Hongqi Lake north side mining wasterock dumpsite ecological environmental remediation JXHS-RR- Civil works for Hengshan 7.96 NCB Post 1S1E Q3/2019 Additional W4 District integrated river Financing rehabilitation for Anle Creek 750 m and Huangni River 7.7 km JXHS-RR- Civil works for Hengshan 9.20 NCB Post 1S1E Q3/2019 Additional W5 District integrated lake Financing rehabilitation of Hongqi Lake 23.51 ha JXHS-UR- Civil works for Training 9.88 NCB Post 1S1E Q3/2019 Loan 3613 W6 Facility and community center (technical training, mining impact monitoring center, gym, and library) JXHS-RC- Hengshan District roads 8.55 NCB Post 1S1E Q3/2019 Loan 3613 W7 improvement—Jiaotong Road civil works for bypass bridge

Review Estimated [Prior / Package Value Procurement Post/Post Bidding Advertisement Number General Description ($ million) Method (Sampling)] Procedure Date (quarter/year) Comments JX-WT-W8 Civil works for Jixi No. 3 4.36 NCB Post 1S1E Q3/2019 Loan 3613 WTP upgrading and expansion JX-WW-W9 Civil works and equipment 1.47 NCB Post 1S1E Q3/2019 Additional supply and installation for Financing Xingfa drainage pump station, Shuianjie pump station, Zhongxing pump station and metallurgical company pump station in Jixi JX-WW- Lot A: Civil works for drainage 10.31 NCB Prior 1S1E Q3/2020 Additional W11 and sewer pipes in Northwest Financing Main City area Lot B: Civil works for drainage and sewer pipes in southeast area JX-WS- Civil works for water supply 7.51 NCB Post 1S1E Q4/2019 Additional W12 pipe refurbishment in Jixi Financing (Dongshan Area) Civil works for water supply pipe refurbishment in Jixi (other areas) JX-WS- Civil works for water supply 4.93 NCB Post 1S1E Q3/2020 Additional W13 pipe refurbishment in Jixi Financing (Liangxi Area) Qitaihe Goods QH-G1 Water Treatment Plant 10.33 ICB Prior 1S1E Q3/2019 Loan 3613 equipment and installation QH-G3 Water transmission and 7.31 ICB Prior 1S1E Q4/2019 Loan 3613 distribution replacement and expansion: equipment and installation for Xibu Mine Area and Longhu Mine Area lift stations, water meters, and flow meters. QH-G4 Water transmission and 12.86 ICB Prior 1S1E Q4/2019 Loan 3613 distribution replacement and expansion: equipment and installation for pipe materials

Review Estimated [Prior / Package Value Procurement Post/Post Bidding Advertisement Number General Description ($ million) Method (Sampling)] Procedure Date (quarter/year) Comments QH-G5 Equipment procurement and 1.15 NCB Post 1S1E Q4/2019 Loan 3613 installation for NRW pilot (leakage detection equipment, SCADA system, flow meters, and software) QH-G6 (B) Electric public bus purchase 7.20 ICB Prior 1S1E Q4/2019 Additional (63 units) Financing Request of removal of any domestic subsidies that may exist in the country of the bidder QH-G7 System upgrading for control 1.16 NCB Post 1S1E Q4/2019 Additional center Financing Works QH-GF-W1 Qitaihe Industrial Park (green 9.79 NCB Post 1S1E Q4/2019 Loan 3613 food and pharmaceutical biofermentation)—civil works for SME support facilities QH-W2 Qitaihe Industrial Park (green 7.01 NCB Post 1S1E Q4/2019 Loan 3613 food and pharmaceutical biofermentation)—civil works for roads and associated facilities QH-MR-W3 Civil works for Taoshan Mine 3.02 NCB Post 1S1E Q3/2020 Loan 3613 Remediation and environmental rehabilitation QH-WS-W6 Civil Works for water 17.96 NCB Prior 1S1E Q4/2019 Additional transmission and distribution Financing system replacement and expansion QH-WT-W4 Civil works for Water and 12.66 NCB Prior 1S1E Q4/2019 Additional Wastewater Company WTP Financing QH-IT-W7 Civil works for three bus 12.04 NCB Prior 1S1E Q4/2019 Additional terminals (Taoshan District, Financing Qiezihe District, and Xinxing District

Review Estimated [Prior / Package Value Procurement Post/Post Bidding Advertisement Number General Description ($ million) Method (Sampling)] Procedure Date (quarter/year) Comments Shuangyashan Goods SY-G1 Water Supply: equipment and 2.76 NCB Post 1S1E Q3/2019 Additional installation of two new lift Financing stations (East Ring Road 23,000 m3/d and West Ring Road 20,000 m3/d) SY-G2 Water Supply: equipment and 1.29 NCB Post 1S1E Q3/2019 Additional installation for 143 water flow Financing meters, dispatching system, and SCADA system. SY-G3 Water transmission pipes for 2.66 NCB Post 1S1E Q3/2019 Additional East Ring Road, and West Financing Ring Road, and connection pipes for East Ring Road to Yishoushan Works SY-SM-W1 Civil works for Shuangyashan 8.87 NCB Post 1S1E Q4/2019 Loan 3613 business park—SME support facilities (15 buildings, roads and road hardening, water heating center, electrical, and fire protection facilities) SY-CR-W2 Civil works for Shuangyashan 21.44 NCB Prior 1S1E Q4/2019 Loan 3613 business park—roads and water and wastewater pipes (Jingmao Road, Maoyi South Road, Wusi Road, and Zhong'e North Road) SY-MR-W3 Civil works for Lingdong 2.73 NCB Post 1S1E Q3/2019 Loan 3613 District Xiaoxishan mine wasterock dumpsite remediation SY-UR- Water transmission pipes for 5.99 NCB Post 1S1E Q3/2019 Additional WS4 East Ring Road, West Ring Financing Road, and the connection pipes for East Ring Road to Yishoushan, Yishoushan water storage tank, Hancong WTP water storage tank,

Review Estimated [Prior / Package Value Procurement Post/Post Bidding Advertisement Number General Description ($ million) Method (Sampling)] Procedure Date (quarter/year) Comments Dongshan water storage tank, Nanshan water storage tank and operation room Water Supply: Donghuan Road and Xihuan Road water transmission pipes, Donghuan Road to Yishoushan water connection pipes and two pump stations, drainage pipes for Hancong Creek WTP, and water supply pipes (Tongda Bridge to No. 1 Road) SY-RC-W8 Civil works for Yunfengshan 22.52 NCB Prior 1S1E Q3/2020 Loan 3613 Road Connection SY-UR- Civil works for drainage and 11.46 NCB Prior 1S1E Q4/2019 Additional WW5 sewer in Jianshan District: Financing No. 1 Road to No. 5, and South City Area: Civil works for drainage and sewer in Jianshan District: No. 5 Road to Jiuyang Road Civil works for sewer pipes in Lingdong District SY-UR- Civil Works for drainage and 14.12 NCB Prior 1S1E Q4/2019 Loan 3613 WW6 sewer in Jianshan District: Jiuyang Road North 1S1E = single-stage: one envelope, ADB = Asian Development Bank, ha = hectare, ICB = international competitive bidding, km = kilometer, m = meter, m2 = square meter, NCB = national competitive bidding, WTP = water treatment plant, WWTP = wastewater treatment plant.

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

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

Estimated Advertisement Package Value Recruitment Review Date Type of Number General Description ($ million) Method (Prior / Post) (quarter/year) Proposal Comments CS2 Business development 5.972 QCBS Prior Q1/2019 FTP Loan 3613 services for SMEs quality: cost ratio of 90:10 CS3 External resettlement 1.0 CQS Prior Q3/2019 BTP Loan 3613 and social monitoring (total for four 4 packages Amplified EOI to and external packages) include full CVs environment monitoring for all proposed services packages specialists CS3A External Monitor for 0.26 CQS Prior Q3/2019 BTP include full CVs Hegang for all proposed specialists CS3B External Monitor for Jixi 0.24 CQS Prior Q3/2019 BTP include full CVs for all proposed specialists CS3C External Monitor for 0.24 CQS Prior Q3/2019 BTP include full CVs Qitaihe for all proposed specialists CS3D External Monitor for 0.26 CQS Prior Q3/2019 BTP include full CVs Shuangyashan for all proposed specialists CS4 Consulting services for 0.18 CQS Prior Q4/2019 BTP Loan 3613 NRW pilot in Qitaihe BTP = biodata technical proposal, CQS = consultants’ qualifications selection, CV = curriculum vitae, FTP = full technical proposal, NRW = nonrevenue water, SMEs = small and medium-sized enterprises.

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

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

Goods and Works Contracts Estimated Procurement / Review Advertisement Package General Value Number of Recruitment (Prior / Date (quarter/ Type of Number Description ($ million) Contracts Method Post) year) Proposal Comments JX-G3 Jixi No. 3 WTP 0.52 1 NCB Post Q4/2018 1S1E Loan 3613 upgrading and expansion lab equipment SY-G4 Laboratory 0.45 1 NCB Post Q4/2020 1S1E Additional testing Financing equipment and Installation

2. Indicative List of Packages Required under the Project

62. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project, other than those mentioned in previous sections (i.e., those expected beyond the 18-month period).

Goods and Works Estimated Review Estimated Package Number Procurement [Prior / Bidding General Description Value Comments Number6 of Method Post/Post Procedure (cumulative) Contracts (Sampling)] HG-GX-W1 Civil works for Hegang 1.64 1 NCB Post 1S1E Loan 3613 industrial park (green food, green energy, and high- tech)—civil works for service center (3,200 m2) HG-GX-W2 Civil works for Hegang 13.67 1 NCB Prior 1S1E Loan 3613 industrial park (green food, green energy, and high- tech)—road and associated piping works (Xiyi Road and Liyuan Road)

Goods and Works Estimated Review Estimated Package Number Procurement [Prior / Bidding General Description Value Comments Number6 of Method Post/Post Procedure (cumulative) Contracts (Sampling)] HG-GX-W3 Civil works for Hegang 3.27 1 NCB Post 1S1E Loan 3613 industrial park (green food, green energy, and high- tech)—road and associated piping works (Xisan Road) JXHS-HT- Civil works for Hengshan 15.49 1 NCB Prior 1S1E Loan 3613 W1 District industrial park (high-tech graphite based materials and e-mobility)— road infrastructure and SME support facilities m2 = square meter, NCB = national competitive bidding.

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

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

Package General Estimated Procurement / Review Type of Advertisement Comments Number Description Value Recruitment (Prior / Post) Proposal Date (quarter/ ($ million) Method year) Hegang Goods HG-G2 ITS intelligent signal control 1.45 NCB Prior 1S1E Q1/2018 Advanced system and other facilities, contracting, maintenance vehicles, and first NCB, and equipment for bus goods, Loan operation (Package 1) 3613, awarded Shuangyashan Works SY-RC-W9 Civil works for Xinxing 22.55 NCB Prior 1S1E Q1/2018 Advanced Avenue connection Contracting, including associated First NCB drainage and sewer works, Loan 3613, awarded

Package General Estimated Procurement / Review Type of Advertisement Comments Number Description Value Recruitment (Prior / Post) Proposal Date (quarter/ ($ million) Method year) Consulting Services Contracts - Firms CS1a Project implementation 6.943 QCBS Prior Q3/2018 FTP Loan 3613 consulting services for quality: cost project management ratio of 90:10 support and capacity development

Consulting Services Contracts - Individuals CS5 (various Project implementation 0.170 ICS Prior Q3/2017 National assignment Loan 3613 individual start-up support consulting (total) Advance consultants) services contracting, each contract is below $100,000 CS 5.1 Project Procurement and 0.031 ICS Prior Q3/2017 EOI 3 person- Management Specialist months CS 5.2 Resettlement Specialist 0.031 ICS Prior Q3/2017 EOI 3 person- months CS 5.3 Environment Specialist 0.031 ICS Prior Q3/2017 EOI 3 person- months CS 5.4 Project and SME Financial 0.031 ICS Prior Q3/2017 EOI 3 person- Management Specialist months CS 5.5 SME Business Strategy 0.023 ICS Prior Q3/2017 EOI 2 person- Specialist months CS 5.6 SME Sector Specialist 0.023 ICS Prior Q3/2017 EOI 2 person- months EOI = expression of interest, ICS = individual consultant selection. a A budget of $1,000,000 is included in this package for preparing a training and study tour plan, and arranging for the trainings and tours is included in the terms of reference of this consulting package.

a. Awarded and Ongoing Contracts

Not applicable. b. Completed Contracts

Not applicable.

4. Non-ADB Financing

64. The following table lists goods, works, and consulting services contracts over the life of the project, financed by non-ADB sources.

Goods and Works Estimated Value Estimated Number Procurement General Description ($ million) of Contracts Method Comments Hegang HG-DH-W6: Civil works for district heating system pipe 2.90 NBF 2017 (awarded) retrofit (primary and secondary pipes replacement in 2017) HG-DH-W7: Civil works for district heating system pipe 11.15 NBF 2017 (awarded) retrofit (primary and secondary pipes replacement in 2018) and pilot of heating for buildings HG-IT-W9: Road rehabilitation, public, and non-motorized 11.16 NBF 2017 (awarded) transport improvements: bus lanes works, roads resurfacing, bus bays, new drain pipes and intersections; and ITS works (Meijian Road, Hubei Road, Gongyuan Road, Guangming Road, Tianxiang Road, Changsheng Road, Gongjiao Road, West Jiefang Er Road, No. 5 Road, No. 9 Road, Tianqiao Road, Fendou Road, and West Jiefang No. 4 Road) HG-RR-W13: Civil Works for flood protection Gabion to 2.59 NBF 2017(awarded) reach 1 in 20-year flood protection standard on Xiaoheli River 1.94 and Helihe River 4.82 km Jixi JX-WW-W10: Civil works for cross bridge sections and 3.26 NBF 2019 culverts of Jixi drainage and sewer pipes Qitaihe QH-G2 Shengke WTP equipment and installation 12.51 NBF 2019 QH-WT-W5: Civil works for Shengke WTP 8.10 NBF 2019 QH-6 (A) Electric public bus purchase (120 units) 12.60 NBF 2018 (awarded), 2020

Shuangyashan SY-RC-W7: Civil works for South Ring Road including 19.14 NBF 2018 (awarded) associated drainage and sewer, lighting, electrical and communication cables, and bridge ITS = intelligent transport system, km = kilometer, m3/d = cubic meter per day, NBF = nonbank financing, SCADA = supervisory control and data acquisition, WTP = water treatment plant.

5. National Competitive Bidding

a. Regulation and Reference Documents

65. The procedures to be followed for national competitive bidding shall be those set forth in The Government Procurement Law of People’s Republic of China approved on 29 June2002 and Law of the People’s Republic of China on Bid Invitation and Bidding of the People’s Republic of China promulgated on August 30, 1999 with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the ADB Procurement Guidelines.

b. Procurement Procedures

(i) Competitive Bidding Procedure (Procurement Law Art. 26 and Law on Bidding Art. 10).

66. Public tendering is the acceptable method of government procurement, and public invitation is the accepted bid invitation mode.

(ii) Eligibility

67. The eligibility of bidders shall be as defined under section I of the Procurement Guidelines; accordingly, no bidder or potential bidder should be declared ineligible for reasons other than those provided in section I of the Procurement Guidelines, as amended from time to time. The blanket waiver for country eligibility applies for contracts financed by ADB.

(iii) Advertising

68. All invitations to prequalify or to bid shall be advertised in the national press (China Daily Newspaper) or a free and open access website (www.chinabidding.com). Such advertisement shall be made in sufficient time for prospective bidders to obtain prequalification or bidding documents and prepare and submit their responses. In any event, a minimum preparation period of twenty-eight (28) days shall be given. The preparation period shall count (a) from the date of advertisement, or (b) when the documents are available for issue, whichever date is later. The advertisement and the prequalification and bidding documents shall specify the deadline for such submission.

(iv) Bidding Period

69. The minimum bidding period is 28 days prior to the deadline for the submission of bids.

(v) Participation by Government-Owned Enterprises

70. Government owned enterprises in the Borrower’s country may be permitted to bid if they can establish that they (a) are legally and financially autonomous, (b) operate under commercial law, and (c) are not a dependent agency of the Borrower/Project Executing Agency.

(vi) Rebidding

71. Re-bidding shall not be allowed solely because the number of bids is less than three (3).

c. Bidding Documents

(i) Qualification Requirements

72. Qualification requirements of bidders and the method of evaluating the qualification of each bidder shall be specified in detail in the bidding documents, and in the prequalification documents if the bidding is preceded by a prequalification process.

(ii) Bid Submission and Opening

73. Bidders shall be allowed to submit bids by mail or by hand.

74. All bids shall be opened in public; all bidders shall be afforded an opportunity to be present (either in person or through their representatives) at the time of bid opening, but bidders shall not be required to be present at the bid opening.

(iii) Bid Evaluation and Award

75. No bid may be rejected solely on the basis that the bid price falls outside any standard contract estimate, or margin or bracket of average bids established by the Borrower and/or Project Executing Agency.

76. Each contract shall be awarded to the lowest evaluated responsive bidder, that is, the bidder who meets the appropriate standards of capability and resources and whose bid has been determined (a) to be substantially responsive to the bidding documents and (b) to offer the lowest evaluated cost. The winning bidder shall not be required, as a condition of award, to undertake responsibilities for work not stipulated in the bidding documents or otherwise to modify the bid as originally submitted.

d. Asian Development Bank Policy Clauses

77. Each contract financed with the proceeds of the Loan shall provide that the suppliers and contractors shall permit ADB, at its request, to inspect their accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by ADB.

78. A provision shall be included in all bidding documents for NCB works and goods contracts financed by ADB stating that the Borrower shall reject a proposal for award if it determines that the bidder recommended for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for the contract in question.

79. A provision shall be included in all bidding documents for NCB works and goods contracts financed by ADB stating that ADB will declare a firm or individual ineligible, either indefinitely or for a stated period, to be awarded a contract financed by ADB, if it at any time determines that the firm or individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices or any integrity violation in competing for, or in executing ADB- financed contract.

D. Consultants’ Terms of Reference

80. The consulting services to be financed by the loan include six packages: (i) CS1: Consulting services for project management and implementation support and capacity development and training (international firm); (ii) CS2: Business development services capacity development to SMEs consulting services; (iii) CS3: External resettlement and social monitoring and external environment monitoring services (national institute); CS4: Consulting services for non-revenue water (NRW) reduction piloting in Qitaihe (national institute); and (v) Package bundle CS5: Project implementation startup consultant support (6 individual national consultants).

81. The scope and tasks of the consulting services financed by the loan are described below. The HDRC on behalf of the HPG will support the four implementing agencies engaging the six consulting service contract packages (including the package bundle) in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).

82. In addition to the consulting services financed by the loan, domestically funded consulting services will also be recruited by the PMOs. The HDRC, in coordination with the PMOs, will recruit a tendering agency to provide tendering support, including preparation of bidding documents, invitation for bids and bid evaluation reports, and engage domestic design institutes to carry out preliminary and detailed designs. Construction supervision engineers will also be recruited for overseeing and inspecting the construction sites to ensure compliance with national regulations, safety standards, and ADB requirements. Different engineering consultants will be recruited for the design of different subcomponents in river rehabilitation, road construction, water and wastewater, mine remediation, intelligent transportation system support, etc. The PMOs in coordination with the PIUs will recruit external EMP to monitor the EMP implementations.

Table 20: Overview of Consulting Services Contract Packages No. Package Name Details 1. Packages Financed by the ADB Loan CS1 Project implementation An international firm with international and national experts. consulting services and Selected by PMOs with support from the HDRC using ADB’s project management support QCBS (90:10) selection method. and capacity development Expected duration: 5 years. Financed by the loan. CS2 Business development Selected by the HPG on behalf of the implementing agencies using services capacity development ADB’s QCBS (90:10) selection method. to SMEs consulting services Expected duration: 5 years. Financed by the loan. CS3 External resettlement and Four national firms or agencies with national experts each social monitoring and external responsible for one city. Selected by the four-project city PMOs with CS3A environment monitoring support from the HDRC using ADB’s CQS selection method. (Hegang) services Expected duration: Intermittent input from project start to 2 years CS3B (Jixi) after the completion of resettlement, social and gender, and CS3C environment monitoring activities. Financed by the loan. (Qitaihe) CS3D (Shuangya shan) CS4 Consulting services for non- A national firm with national experts. revenue water (NRW) Selected by the QPMO through ADB’s CQS selection method. reduction piloting in Qitaihe Expected duration: 1 year. Financed by the loan. CS5 Project implementation start- Contract bundle with individual consultants: Project Procurement up support consulting services and Management Specialist, Resettlement Specialist, Environment Specialist, Project and SME Financial Management Specialist, SME Business Strategy Specialist, and SME Sector Specialist Expected duration of intermittent input: 16 months. Selected by PMOs with support from the HDRC through ADB’s ICS selection method. Financed by the loan.

No. Package Name Details 2. Packages Financed by Counterpart Funds 1 National design institutes The PMOs in coordination with PIUs will engage and finance domestic design institutes to carry out preliminary and detailed engineering designs. Domestic procurement regulations will be followed. 2 National tendering agency The HPG on behalf of the implementing agencies will engage a domestic tendering agency with experience in ICB and NCB bidding for ADB projects. 3 National construction The PIUs will engage a domestic consultant for each works contract supervision engineers following domestic regulations on engineering supervision and procurement. Expected duration: from 1 month before the commencement of construction works to 1 month after the completion. 3. Package Financed by ADB Financial Sector Development Partnership Special Fund,a Attached Technical Assistance Grant, TA Heilongjiang Business Development Services Support to Strengthen Financial Intermediation Component Implementationb Attached Consulting services for The TA will be administered by ADB and TA consultants will be TA capacity development TA for engaged through ADB’s QCBS (90:10) selection method using full Heilongjiang Business technical proposal. Expected duration: 5 years. HPG and the Development Services project cities will be the implementing agencies. Support and ESMS screening and monitoring ADB = Asian Development Bank, CQS = consultant qualification selection, ESMS = environmental and social management system, HDRC = Heilongjiang Development and Reform Commission, HPG = Heilongjiang Provincial Government, ICB = international competitive bidding, ICS = individual consultant selection, NCB = national competitive bidding, PIU = project implementation unit, PMO = project management office, QCBS = quality- and cost-based selection, SMEs = small and medium-sized enterprises, TA = technical assistance. a Established by the Asian Development Bank. Financing partner is the Government of Luxembourg. b Outline terms of reference for consultants for the attached TA is in the Linked Document: Attached Technical Assistance. Source: Asian Development Bank.

D1. Consultant’s Terms of Reference for Consulting Services Package CS1: Project Implementation Consulting Services for Project Management Support and Capacity Development

1. Consultant inputs

83. Project management consulting services for project implementation support and capacity development will be engaged through QCBS selection method with a standard quality: cost ratio of 90:10 with the full technical proposal procedure. The estimated input includes 67 person- months of international consultant input and 628 person-months of national consultant input. Table 1 shows the summary of specialists’ inputs. All international specialists must have a relevant academic degree and at least 12 years (team leader: at least 15 years) of relevant project experience. Work experience in the PRC will be an advantage. All national specialists must have a relevant academic degree and at least 7 years (deputy team leader: at least 15 years) of relevant work and project experience. National specialists should be fluent in English and experience from working with international agencies will be an advantage.

Table 21: Summary of Consultant Inputs International National Area of Expertisea (person-months) (person-months) 1 Project Management Municipal Engineer (team leader) 15 2 Deputy team leader and/or construction management specialist 45 3 Project management and site supervision engineers (four 240 positions) 4 Financial management and disbursement specialist 4 55 5 Procurement and contract management specialist 42 6 River rehabilitation green Infrastructure specialists 3 14 7 Water and wastewater specialist 2 16 8 Industrial wastewater specialist 6 9 Nonrevenue water specialists 2 8 10 SCADA and MIS specialists 3 6 11 Mining remediation specialists 6 16 12 Road and traffic safety specialist 16 13 Traffic management specialist 8 14 Social development and gender specialist 12 15 Resettlement specialist 4 30 16 Environment specialist 4 30 17 Industrial park management and SME cluster specialists 4 8 18 Tourism and place branding specialists 4 8 19 ICT and smart city applications specialists 4 16 20 TVET specialists 4 8 21 PPP specialist 6 22 Asset management specialists 2 8 23 Capacity building specialist 14 24 Public environmental awareness campaign specialists 2 8 25 Institutional specialists: utility management (Qitaihe Water) 2 4 26 Business planning specialists (Qitaihe Water Supply) 2 4 Total person-months 67 628 ICT = information and communication technology, MIS = management information system, PPP = public-private partnership, SCADA = supervisory control and data acquisition, TVET = technical and vocational education and training. a In addition some specialists will be engaged as resource persons to carry out specific training programs and events. Source: Asian Development Bank estimates.

84. The consulting services package CS1 will include:

(i) Project management support focusing on directly supporting the PMOs and PIUs in all aspects related to project management, implementation, monitoring,

reporting, procurement, contract management and financial management; and

(ii) Capacity development including institutional development, practical training and policy dialogue with PMOs, PIUs, and concerned local government agencies to improve knowledge and management skills to ensure project investment sustainability, and enable smooth implementation and sustainable operation and maintenance of the project facilities and enhancing the benefits and synergies from the investments and ensuring the sustainability of the investment project. It includes the following capacity development modules (CDMs): (a) CDM 1: Capacity development for PMOs and PIUs staff on ADB policies, procedures and technical requirements on procurement, contract management, technical supervision and quality control, financial management, environmental and social safeguards, monitoring and evaluation and reporting to enable them to efficiently fulfill tasks effectively and efficiently; and (b) CDM 2–8: Institutional capacity development and policy dialogue for the concerned implementing agencies and government agencies, PMOs and PIUs include but is not limited to (1) CDM 2: City cluster cooperation among the four cities in East Heilongjiang in areas of place branding, tourism marketing, trade and logistics, supply chain integration facilitation, SME development and jobs and training market using smart city technology; (2) CDM 3: Labor force assessment and human resource development, and Technical and Vocational Education and Training (TVET) development and trainer training; (3) CDM 4: Industrial park management and SME cluster development promotion; (4) CDM 5: Mining remediation master planning, pilot design and implementation, and establishment of mechanisms for replication; (5) CDM 6: urban-rural flood risk and ecological river management - climate resilience and sponge city capacity development; (6) CDM 7: wastewater and industrial wastewater management system design, construction, management, operation, services and tariff reform; and (7) CDM 8: sustainable urban transport, intelligent transport systems, road and traffic safety, and public transport management.

2. Project Management Support

85. This part of the consulting services will focus on the support to PMO and PIUs on all aspects related to project management and implementation. Experts involved will include the team leader, deputy team leader, project management and site supervision engineers, river rehabilitation and green infrastructure specialist, road and traffic safety specialist, water and wastewater specialist and industrial wastewater specialist, procurement and contract management specialist, financial management specialist, social development and gender specialist, resettlement specialist, environment specialist, and other specialists as needed. The scope will include but not be limited to (i) developing a project performance management system (PPMS) for the project, (ii) assistance with procurement including support to advance contracting, retroactive financing, and contract management; (iii) construction monitoring; (iv) funds withdrawal, reimbursement, and financial management; (v) monitoring the implementation of environmental and social safeguards; (vi) daily liaison and communication with ADB; (vii) assisting with organization and coordination for ADB loan review missions; (viii) preparing required reports under the loan agreement; and (ix) monitoring compliance with loan covenants and assurances. These services will be provided by a team of international and national specialists led by an

international and a national project management specialist and team leader/deputy team leader and comprising project management specialist/deputy team leader; and national environmental safeguard specialist; resettlement safeguards specialist; social development, gender and community participation specialist; procurement and contract management specialist; financial management and disbursement specialist; economic specialist; financial specialist; and international technical engineers for river rehabilitation and traffic.

86. Detailed tasks include but are not limited to the following: (i) setting up of organizational structure, operational procedures, reporting and filing system, and formulate work plans; (ii) establishing PPMS, including defining baseline data, data collection and analysis, reporting mechanism, and regular updates of PPMS in line with ADB’s requirements; (iii) providing technical support for advance procurement, and supporting the tendering agency, including review for procedural compliance, review of bidding documents, review of bid evaluation results, review of contracting documents and contract negotiations, to ensure that the advance contract packages are in compliance with ADB’s policies and procedures; (iv) providing support for procurement, and supporting the National Tendering Agency, including review for procedural compliance, review of bidding documents, review of bid evaluation results, review of contracting documents and contract negotiations, to ensure that the tendering complies with ADB’s policies and procedures; (v) assisting the PMOs in preparing contract variations, including revisions, reviews and confirmations, and preparing, submitting and updating the contract variation documents in accordance with PRC and ADB requirements, covering the contents of variations, rationales, environmental due diligence and revisions to the environmental management plan; (vi) assisting the PMOs in the updating, implementation and monitoring of resettlement plans; (vii) on behalf of the PMOs, coordinating with the National Construction Supervision Company to review construction quality and progress, and provide recommendations and advice to rectify problems that may occur; (viii) establishing a project financial management system in conformity with ADB’s policies and procedures, and assisting with fund withdrawals and reimbursement, including forecasts and applications for replenishment of the advance accounts, review of fund withdrawal application reimbursement documents, periodic compilation of ADB disbursements, and review and completion of provision and utilization of counterpart funds; (ix) regularly updating project financial information, including the investment plan and financing plan; (x) assisting the PMOs in reviewing annual audits of the project accounts, and coordinating the submission of the annual audit reports and responses to ADB comments; (xi) reviewing and revising as needed the environmental management plan (EMP), and the social and gender action plan (SGAP) as well as inspecting the implementation of EMP including public consultations, and prepare, submit and update related periodic monitoring reports in accordance with covenants of the loan agreement; (xii) assisting the PMOs in daily communication with ADB, including drafting communication documents and responses to ADB’s information requests;

(xiii) providing necessary assistance to PMOs for ADB loan review missions, including liaison, mission schedule and data collection, as well as coordinating relevant matters related to signing of the MOU; (xiv) assisting the PMOs to prepare and submit the semiannual project progress reports, environmental monitoring reports, resettlement monitoring reports in conformity with the assurances/covenants of the loan and project agreements, and revise the reports in response to comments from ADB; (xv) monitoring and reporting on compliance with Loan covenants; (xvi) assisting the PMOs to organize the loan midterm review, including pre-mission preparation and coordination, preparing all required documents (tendering process, procurement progress, engineering progress, fund withdrawal and disbursement progress, financial reevaluation, economic reevaluation, environmental reevaluation, resettlement reevaluation, project scope adjustment and justifications, environmental and resettlement due diligence), updating the procurement plan, and revising post-mission documents with all major experts participating in the entire process; (xvii) assisting the PMOs to complete the project completion report (PCR) and all related work, including advance preparation and coordination for the ADB review mission, preparing and revising all required reports for the PCR, covering tendering documents, procurement, construction, fund withdrawal and disbursement, financial reevaluation, economic reevaluation, environmental reevaluation, resettlement reevaluation with the main specialists from the team participating in the entire ADB missions; and (xviii) completing other tasks that may be assigned by the PMO from time to time.

3. Capacity Development

(a) CDM 1: Capacity Development for Project Management Office and Project Implementation Staff

87. The purpose of this CDM is to provide adequate knowledge and skills to PMOs and PIUs staff to ensure operational knowledge attainment on ADB policies and procedures and project management-related aspects (PPMS, procurement, financial management, contract management, fund withdrawal, disbursement, EMP and environmental safeguard monitoring, and social safeguard monitoring including resettlement plan, and SGAP). The project management support team of specialists will be providing these services. Experts involved will include a team leader, a deputy team leader, project management and site supervision engineers, river rehabilitation and green infrastructure specialist, road and traffic safety specialist, water and wastewater specialist and industrial wastewater specialist, procurement and contract management specialist, financial management specialist, social development and gender specialist, resettlement specialist, environment specialist, and other specialists as needed.

88. Detailed tasks include but are not limited to the following: (i) during inception period, under the leadership of PMOs, preparing a detailed training needs assessment and training plan that will cover training objectives, trainees, contents, location, time, training modality and budget, facilitating and institutionalizing a cross-departmental mechanism of regular meetings for project management and knowledge sharing to be hosted by the respective city PMO and with participation of all PIUs and other concerned agencies and inviting concerned stakeholders and experts as needed; (ii) organizing and providing training on, but not limited to, technical engineering

design, environmental and engineering standards and compliance with regulation and good design practices, sustainable operation and maintenance of project facilities, financial and economic viability assessments, ADB’s policies and procedures, PPMS, procurement, financial management, contract management, fund withdrawal and disbursement, reimbursement, EMP and environment monitoring including monitoring progress of environmental improvements from the project, monitoring safeguard policy compliance including the updating, implementation and monitoring of resettlement plan, social development action plan, GAP, and other related trainings as required by PMO; (iii) organizing on-the-job training, local training events like seminars and workshops, and training on technical matters related to the project to share lessons from good practice projects in areas relevant to the project, including co-benefits from multi- sector projects that comprehensively include economic and urban development and transformation from a resource-based to a diverse and knowledge-based economy in the PRC and internationally; (iv) drafting a program of domestic and overseas training and study tours according to PRC guidelines and budget to locations with good practices for integrated flood risk management, ecological river management, water supply and wastewater management, and road safety management and public transport; and (v) supporting the preparation of project progress reports, monitoring reports, site supervision reports, photo documentation of project progress, stakeholder and public participation, project completion report; preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

89. The following capacity development modules are institutional capacity development and policy dialogue services and they will be prepared and provided by the Project Management and Capacity Development Consultant Team and they can be supported by short term resource persons with specialist expertise, and recruited and guided by the Team Leader and Deputy Team Leader. The capacity development modules (CDM) include the following:

(b) CDM 2: City Cluster Cooperation and Smart City Applications Capacity Development

90. This capacity development module will contribute to the institutionalization of cooperation and coordination mechanisms among the four cities in East Heilongjiang. The module will focus on place branding, tourism marketing, urban, economic, environmental and image transformation, trade and logistics, supply chain integration facilitation, SME development and jobs and training market using smart city technology. Experts from the consultant team and additional resource persons as needed will include tourism and place branding specialist, trade and logistics specialist, industry supply chain specialist, industrial park management and SME cluster specialists, ICT and smart city applications specialist, and other specialists as needed. Coordination and cooperation between this CDM and consulting services under CS2 will be necessary. This module will include the following scope and tasks but not limited to: (i) regional visioning and planning and coordination mechanism involving various departments of the project cities in East Heilongjiang and meeting regularly and discussing cooperation and shared investment programs; (ii) liaising with the government agencies of the four cities and supporting and facilitating shared platform development building on the four implementing agencies’ smart city infrastructure and using smart city applications, big data and

open data, and providing user-friendly interfaces and smart phone applications; (iii) promoting tourism tours, maps and services integration promotion strategies, place branding concepts, and joint tourism marketing as part of the non-coal pillar industries of the four cities promoting economic diversification; (iv) promoting industry cluster development in East Heilongjiang through a link to the SME platform built for each city under the BDS contract and facilitating regional supply chain integration expansion; (v) the shared platform for the project cities will also enable improved trade and logistics that link with other PRC markets and across the border with the Russian Federation. (vi) supporting the non-coal diversification as overarching objective of the project and as identified during project preparation through the diversification roadmap; (vii) promoting a regional eco-system approach and facilitating cooperation among the urban and economic, and tourism and environmental protection bureaus in relation to the transformation of East Heilongjiang’s image from a dirty coal region to a green environment as an element of place branding for tourism marketing, city visioning, and planning exercises; (viii) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and (ix) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC, and other ADB developing member countries.

(c) CDM 3: Capacity Development for Labor Force Assessment and Human Resource Development, and Technical and Vocational Education and Training

91. This capacity development module will be critical for the economic transformation and non-coal diversification. It will identify new skills required by managers and workers in new industry sectors and it will benefit the economy from value add-on through a generally more knowledge-based economy in the future. It will include labor force assessment and human resource development, and technical and vocational education and training (TVET) needs assessment, curriculum development, and trainer training support. This module is included although the cities have institutions in place and some programs included, but it is necessary to complement the FIC and BDS component and strengthen workforce development for supported sectors and firms and to provide capacity building for institutions in (i) curriculum development matching needs of the industry, (ii) provide teacher training, and (iii) establishing institutions- businesses partnerships. The consultant activities will be in coordination with and complementary to the activities of the BDS under package CS2. Experts involved from the consultant team will include TVET and human resources development specialist, and other specialists as needed. Coordination and cooperation between this CDM and consulting services under CS2 will be necessary. This module will include the following scope and tasks but not limited to: (i) engaging with the local education, labor and SME bureaus and coordinating with the local universities, colleges, polytechnics, TVET schools, and industry partners; (ii) assessing labor force and skills, and human resource development needs to serve the non-coal pillar industries identified in the Thirteenth five-year plans of the cities, and developing the non-coal diversification roadmap during the project preparation, and supporting SME development activities under the FIC and BDS components; (iii) preparing national and international best practices cases and recommending

lessons learned applicable in the four project cities; (iv) developing workforce development roadmap in consultation with the concerned municipal agencies and stakeholders like educational institutions, industrial park managers, SME association, and businesses; (v) liaising with the TVET schools and other education facilities and developing roadmaps for curricula and training formats to improve the skills and meet the demand of emerging new sectors i.e., the pillar industries from the economic development plans in the project cities; (vi) contributing to the SME platform developed under the CS2 contract package and to the city cluster cooperation platform under CDM 1; and (vii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC, and other ADB developing member countries.

(d) CDM 4: Capacity Development for Industrial Park Management and Small and Medium-Sized Enterprise Cluster Development Promotion

92. This capacity development module will include industrial park management and SME cluster development promotion. Experts involved from the consultant team and as needed additional resource persons, will include industrial park management and SME cluster specialists, and other specialists as needed. Coordination and cooperation between this CDM and consulting services under CS2 will be necessary. This module will include the following scope and tasks but not limited to: (i) providing guidance and support to industrial parks management of the project cities especially the ones supported by the loan; (ii) organizing and preparing training events, and facilitating city- and region-wide economic and industrial cluster planning, strategic industrial park planning and investment programming; (iii) developing capacity on industrial park land development, land management, incremental growth strategies promoting SMEs and business start-ups; (iv) providing advice on industry and company composition for effective supply chain linkages promoting circular economy, providing business services and facilitating commercial business services to become available to the companies, business association organization facilitating business-to-business cooperation and relations, etc.; (v) supporting the industrial park managers with effective services and infrastructure needs assessment, and investment planning; (vi) reviewing and promoting the development and adoption of an environmental management system for the concerned non-coal industrial parks; (vii) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and (viii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

(e) CDM 5: Capacity Development for Mining Remediation Master Planning, Pilot Design, and Implementation

93. This capacity development module will include mining impact assessment, mining remediation master planning, investment planning, mining remediation pilot design and implementation, and establishing mechanisms for lessons learned and replication in the project cities and with various stakeholders including state-owned mining and private enterprises. Experts involved from the consultant team and as needed additional resource persons, will include mining remediation specialists, environment specialist, social and resettlement specialist, public awareness raising campaign specialist, and other specialists as needed. This module will include the following scope and tasks but not limited to: (i) preparing a strategic mining remediation plan and investment program using lessons learned from the pilots in the project cities and from international good practice cases; (ii) liaising with the local mining bureaus, land and resources bureaus, planning bureaus, and mining companies on mining impact assessment, mapping and monitoring plans; (iii) involving the large coal-mining state-owned enterprise in the project cities to obtain data, actively engaging them in the process and also engage the local private mining operators and owners to ensure they will be part of the assessment, visioning and transformation planning process. (iv) conducting analysis based on engagement with state-owned coal mining enterprise and local operators to inform the preparation of the mining impact risk management and mitigation plan. Analysis will include assessing the suitability of existing and future land use taking into consideration mining impact risks and recommending as needed, land use plan adjustments to avoid or reduce risks from mining impacts such as subsidence, seismic risks, environmental pollution, public health risks, water management and flooding risks, water course flow change risks, etc.; (v) working closely with local governments, relevant agencies and other stakeholders to support the preparation of a mining remediation strategy and masterplan in the four project cities; (vi) supporting the preparation of a mining remediation implementation action plan including phased implementation, prioritized investment plan, and private sector involvement plan will be facilitated; (vii) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and (viii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC, and other ADB developing member countries.

(f) CDM 6: Capacity Development for Urban-Rural Flood Risk and Ecological River Management—Climate Resilience and Sponge City Capacity Development

94. This capacity development module will include urban-rural flood risk and ecological river management, climate resilience, and sponge city ecosystems-based adaptation capacity development. Experts involved from the consultant team and as needed additional resource persons, will include a team leader, a deputy team leader, river rehabilitation and green infrastructure specialist, project management and site supervision engineers, social development

and gender specialist, resettlement specialist, environment specialist, public awareness raising campaign specialist, and other specialists as needed. This module will include the following scope and tasks but not limited to: (i) supporting a strategic sponge city and green infrastructure urban-rural masterplan and watershed-wide plan and investment program for structural and non-structural measures; (ii) planning integrated flood risk management and ecological river management, and urban-rural flood risk partnerships using lessons learned from national and international good practice cases, including the PRC’s sponge city pilot program with ADB-supported projects like the Jiangxi Pingxiang Integrated Rural-Urban Infrastructure Development Project25 and the technical assistance project in the Greater Mekong Subregion through Nature Based Solutions;26 (iii) supporting flood risk reduction planning of structural and non-structural measures including integrated land use planning and watershed-wide considerations including upstream floodplain protection, flood early warning systems, disaster preparedness, flood resilient farming, sponge city, and climate change resilience planning and implementation; (iv) providing training on urban-rural river environment and water pollution reduction partnership planning, including environmental awareness raising, managing and reducing pollution (i.e., from mining and industries, illegal solid waste dumping, and agriculture), river ecology, wetland design and maintenance, and biodiversity enhancement; (v) ensuring that the cities implement a rigorous solid waste management regime in the river greenways including waste bins, collection, and final disposal at a sanitary landfill or waste-to-energy plant; (vi) preparing national and international best practices cases and recommend lessons learned applicable in the four project cities; and (vii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

(g) CDM 7: Capacity Development for Water Supply, Domestic and Industrial Wastewater, Drainage, and District Heating

95. This capacity development module will include aspects of water supply, domestic and industrial wastewater management, and drainage management, district heating system design, construction, management, operation, services and tariff reform. Experts involved from the consultant team and as needed additional resource persons, will include a team leader, a deputy team leader, water and wastewater specialists, industrial wastewater specialist, river rehabilitation and green infrastructure specialists, social and resettlement specialist, environment specialist, public awareness raising campaign specialist, and other specialists as needed. This module will include the following scope and tasks but not limited to: (i) supporting the development of a strategic urban infrastructure and utility services master plan and investment programming, water resource management and water

25 ADB. 2015. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People’s Republic of China for the Jiangxi Pingxiang Integrated Rural-Urban Infrastructure Development Project. Manila (Loan 3281-PRC, ongoing); 26 ADB. 2016. Nature Based Solutions for Building Resilience in Towns and Cities: Case Studies from the Greater Mekong Subregion. Manila. https://www.adb.org/publications/nature-based-solutions-building-resilience-towns- cities-gms

utility master plan support; (ii) providing training and guidance to ensure the sustainability of project investments on water supply systems and treatment, related technology options, operations and maintenance, water supply safety, non-revenue water assessment and reduction planning and implementation, domestic wastewater collection and treatment, industrial wastewater pre-treatment, supervisory control and data acquisition (SCADA) systems planning, operations and maintenance, and drainage systems planning and management, urban waterlogging, and first flush treatment ponds; (iii) providing training on district heating systems design, O&M, energy efficiency gains, and clean-fuel alternatives; engaging in policy dialogue with relevant government agencies; and promoting public consultation on tariff reforms and possibly necessary increases to achieve full O&M cost recovery plus partial investment cost recovery; (iv) engaging in policy dialogue on tariff reform and providing support and capacity development on financial planning and financial management of utilities; (v) preparing cases of purchase agreements and take-or-pay arrangements for the sale of treated wastewater and carrying out policy dialogue on effective and sustainable financing and operations and maintenance arrangements of water, wastewater, and district heating utilities with special consideration given on the agreements of Luobei County treated wastewater reuse by the industries; (vi) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and (vii) preparing training materials and reports on lessons learned from the project to be shared with other ADB project management offices in the PRC, other concerned experts in the PRC, and other ADB developing member countries.

(h) CDM 8: Capacity Development for Sustainable Urban and Public Transport Intelligent Transport Systems, Traffic Safety, and Non- Motorized Transport

96. This capacity development module will include aspects of sustainable urban transport, intelligent transport systems, road and traffic safety, public transport planning and management, NMT planning and urban design, and smart city urban mobility applications. Experts involved from the consultant team and as needed additional resource persons, will include road and traffic safety specialists and traffic management specialist, traffic management specialist, ICT and smart city applications specialist, and other specialists as needed. This module will include the following scope and tasks but not limited to: (i) supporting the development of a strategic urban and public transport master plan and investment program; (ii) supporting urban transport, public transport and urban road components through capacity development in planning and operations of sustainable urban transport systems, multi-modal integration, traffic and pedestrian safety, and integration of public transport and pedestrian friendly environments; (iii) providing training and support on clean-fuel options for public transport rolling stock and environmentally sound maintenance and recycling of rolling stock and batteries of electric buses; (iv) providing training on intelligent transport systems and smart city applications to enhance opportunities for improved transport efficiency and more customer- oriented service provision; (v) providing training on fare integration, fare increases, and cost recovery strategies

for public transport; (vi) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and (vii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

4. Cost Estimate of the Consulting Services Package CS1

97. The costs for the consulting services are estimated as follows:

Table 22: Cost Estimates for Contract Package CS1 ($'000) Item Amount Financed by the ADB loan 1. Consultants a. Remuneration and per diem i. International consultants 1,528 ii. National consultants 4,101 b. International and local travel 200 c. Reports and communicationsa 10 2. Equipmentb 30 3. Workshops, training, seminars, and conferencesc 844 4. Surveys 50 5. Miscellaneous administration and support costs 30 6. Contingencies 150 Total 6,943 Note: Not included in the calculation is the counterpart funding from local governments to be provided in-kind including office space with desks and chairs, local transport in project cities for project meetings and site visits; qualified fulltime counterpart personnel in the PMOs to work with the consultants; and access to all data, including documents, reports, accounts, drawings and maps, and permissions. a Includes communications facilities, printing and binding of reports, and translation of inception, interim, draft final, and final project reports and other TA output documents into Chinese. b The equipment will be procured according to ADB’s Procurement Guidelines (2015, as amended from time to time). All equipment will be turned over to the executing agency upon completion of the activities. Source: Asian Development Bank estimates.

5. Reporting Requirements for the Consulting Services Package CS1

Table 23: Reporting Requirements for CS1 Category Schedule Target Audiences Inception report Within 1 month after PMO issues the PMOs, ADB notice to proceed of Consulting service Semiannual progress reports During implementation period, PMOs, ADB semiannual (end of Jan and Jul) Midterm report Middle point of implementation PMOs and/or ADB Project completion report 1 month before ADB PCR mission PMOs and/or ADB Semiannual environment monitoring Annual (end of Jan) PMOs and/or ADB reports

Semiannual external resettlement Semiannual PMOs and/or ADB reports Revisions to environmental monitoring After preparation of the detailed PMOs and/or ADB plan engineering design Draft training and study tour plana End of the first year PMOs and/or ADB Reports for each capacity development 2 months after completion of activity PMOs and/or ADB activity All training materials After each lecture/workshop PMOs All public education materials After preparation PMOs ADB = Asian Development Bank, PMO = project management office, PCR = project completion report. a International study tours must comply with PRC regulations and guidelines. Source: Asian Development Bank

98. Reports or other consulting service packages under the project must be prepared in both English and Chinese language. The PMOs will decide on the number of copies of reports to be provided by the consultants to the PMOs and will distribute reports to relevant PIUs and local government agencies and an electronic copy of all reports in English language will be submitted to ADB.

D2. Consultant’s Terms of Reference for Consulting Services Package CS2: Business Development Services Capacity Development to Small and Medium- Sized Enterprise Consulting Services

1. Consultant Inputs

99. Business development services (BDS) to SME capacity development consultants will be engaged through the QCBS selection method with a standard quality: cost ratio of 90:10 with the full technical proposal procedure. The estimated input includes 40 person-months of international consultant input and 112 person-months of national consultant input. Table 3 shows the summary of specialists’ inputs. In addition, specialists will be engaged as resource persons to carry out specific training programs and events and to provide technical support targeting the needs of individual SMEs that receive BDS support under the project. A provisional sum to cover such expenses is included in the cost estimate and needs to be included in the bid document for the recruitment of the consulting firm. All international specialists must have a relevant academic degree and at least 12 years (team leader: at least 15 years) of relevant project experience. Work experience in the PRC will be an advantage. All national specialists must have a relevant academic degree and at least 7 years (deputy team leader: at least 15 years) of relevant work and project experience. National specialists should be fluent in English and experience from working with international agencies will be an advantage.

Table 24: Summary of Consultant Inputs International National Area of Expertise (person-months) (person-months) 1 SME business strategy specialists (team leader/deputy team 13 27 leader) 2 SME financial specialists 7 13 3 SME sector specialistsa 3a SME green food processing sector specialist 5 18 3b SME graphite processing and high-tech products sector 5 18 specialist 3c SME machinery and mechanical technology sector specialist 5 18 3d SME tourism sector specialist 5 18 Total person-months 40 112 SMEs = small and medium-sized enterprises. a Indicative list includes technical sector specialists in fields of identified non-coal pillar industries as identified by the project cities and as needed by the SMEs participating in the program including green food processing, graphite, machinery, technology, wood processing, furniture industry, trade and logistics, tourism, and possibly others as needed by the SMEs supported by this BDS consulting services. Time inputs will be determined on an as needed basis and the number of person-months listed under item 3 is an estimate for the inputs of the indicative list of sector specialists. This does not include resource persons to be engaged under the consultant firm with specialized expertise to provide specific technical capacity development support to SMEs on an as needed basis. Source: Asian Development Bank estimates.

2. Objectives

100. The Business Development Services Capacity Development Component is critical for the development of competitive SMEs, private sector development, job creation, and non-coal diversification. This component is strategically linked with the financial intermediation component as it improves SMEs capacities and brings the quality of SME projects and investments to bankability standards and hence the BDS will also contribute to FIC subproject pipeline development. More details on the BDS for SMEs and its link to the FIC can be found in the PAM (section B).

101. The proposed BDS capacity development component is designed to improve the capacity and competitiveness of SMEs in the project cities and will be implemented in coordination with the financial intermediation project component. The BDS component will align with national, provincial and project city SME promotion and support programs and it will also strengthen the SME bureaus’ capacity to carry out effective and targeted SME support to sustainably improve the enabling environment for private sector development and non-coal diversification in the project cities.

102. The BDS component will build on existing arrangements and programs provided by the four project cities, especially by the cities’ SME bureaus, and bridging gaps in the current practice of identifying specific capacity needs and providing targeted capacity development support. The consultants will implement the BDS component in coordination with and receiving directions from the project city PMOs. The consultants will work in close cooperation with the local and provincial development and reform commissions and SME bureaus, both of which are part of the PMOs, and align activities and strengthen their capacity to enable these agencies to enhance their capacity development support services beyond the implementation of the project. Alignment with other local bureaus include labor and education bureaus to facilitate labor force building to meet human resource needs by the SMEs in the project cities in a more diversified economy in the future.

103. This consulting service package is designed to provide a wider range of BDS to a significant number of SMEs over the project implementation period of 5 years. The consultants will also coordinate and share information on SMEs with consultants engaged under the technical assistance (TA) attached to this project, which is described in the Linked Document: Attached Technical Assistance. Beneficiaries should include inclusive businesses, specifically women, the poor and the elderly who should benefit from jobs created through the expected strengthening of the SMEs and their competitiveness.

3. Institutional Arrangement and Business Development Services Office under the Local Project Management Office and Small and Medium-Enterprise Bureaus

104. The consultants for the BDS component will be guided by the project cities’ PMOs and a dedicated BDS office. Each project city will form a dedicated and professional BDS office under the local development and reform commission and SME bureaus that performs the following responsibilities: (i) appraise and screen potential SME subproject companies to receive BDS capacity development, and seek SMEs with potential for FIC support building a FIC subproject pipeline; (ii) seek out and screen for service providers to support SME subproject companies; (iii) facilitate business-to-business and business-to-institution partnerships including product and production research and development; (iv) build and enhance the SME web-based platform that provides services and training to SMEs; (v) facilitate SME associations and promote their sustainable self-organization; (vi) organize periodic pitching workshops to connect SME subprojects with investors and/or commercial banks; (vii) guide and manage the consultants and identify experts to provide specific technical support to SMEs to be engaged under the contract by the international consulting firm; (viii) track and report the SME support and business incubation progress of the subproject companies; and (ix) work closely with education and training institutions like local universities, colleges, polytechnics, technical and vocational education and training schools in partnering on skills training and human resource development for the needed workforce in the new non-coal industries supported by the project, including women, poor, unemployed and older unemployed people.

4. Scope and Main Activities

105. The consulting services package CS2 will include three main activities: (i) SME customized capacity building and business incubation in all four cities servicing high-potential SMEs with tailored, one-on-one advisory services. Approximately 25 SMEs will receive BDS services per city throughout the project implementation period of 5 years. SMEs are expected to be “investment-ready” after 2 years of receiving customized capacity development;

(ii) Building and maintaining a regional web-based SME service platform to cover all four project cities with company profiles, general expert information, in-depth policy interpretations, and business training content; and

(iii) Facilitating and strengthening SME associations to organize and self-organize regular business-to-business communications and partnerships, off-line events including training seminars and regional case competition, as well as overseeing the operation of the web-based service platform.

5. Small and Medium-Sized Enterprise Capacity Building and Business Incubation

(a) BDS CDM 1: General Business Strategy Improvement for Small and Medium-Sized Enterprises

106. The purpose of this capacity development module is to improve SMEs’ capacity to identify their general business strategy, sales channels, market segmentation, and overall product design. The scope of work will include (i) advisory services on the overall business action plans and future strategies; (ii) improve current sales and product strategies; and (iii) mentor senior management on business planning. Experts involved from the consultant team and as needed additional resource persons, will include a team leader, a deputy team leader, and other specialists as needed. Scope and detailed tasks include but are not limited to the following: (i) conduct overall business clinic services and develop major business action plans for the next 3 years for the SMEs; (ii) validate business plans for FIC subproject companies and how FIC loan or other financing would be deployed for the SMEs; (iii) monitor overall SME business health and advise on how to optimize business operations, including but not limited to market segmentation, sales force management, product and technology advancement, channel management, branding and promotion; (iv) mentor senior management (including business owners) on leadership development and business planning; (v) coordinate with BDS office for support from SME sector specialists and financial specialist; and (vi) prepare training materials and reports on lessons learned from the SME capacity development engagement and the SME improvement to be shared with the HPG, PMOs and ADB, and a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

(b) BDS CDM 2: Enhancement of General Financial Management Capacity for Small and Medium-Sized Enterprises

107. The purpose of this capacity development module is to improve the general internal financial management capacity and investor outreach capability for SMEs. Experts involved from the consultant team and as needed additional resource persons, will include a team leader, a deputy team leader, financial specialists, and other specialists as needed. The scope of work will include (i) work with subproject companies to identify internal financial management gaps; (ii) establish improved internal financial management methodologies for BDS companies; (iii) assist companies to pitch to potential equity investors and commercial banks; (iv) train the companies’ existing financial management staff on the latest corporate finance best practices; and (v) assess companies’ needs to recruit additional financial management staff.

108. Detailed tasks include but are not limited to the following: (i) validate BDS and FIC companies’ internal financial management procedures and results; (ii) analyze the current financial management issues and the resources needed to resolve issues; (iii) propose alternative financial management models and methodologies to be implemented together with the BDS and FIC company financial management staff; (iv) assess the current capacity of the BDS and FIC company financial management team; (v) mentor financial management on effective internal financial management and investor relationship maintenance; (vi) design actions to strengthen the talent quality of the BDS and FIC company financial management team; (vii) share best practices and competitor moves on a regular basis; (viii) Connect with investor resources including but not limited to commercial banks, private equity funds, venture capital funds etc.; (ix) coordinate with BDS office for support from SME sector specialists and business strategy specialist; and (x) prepare training materials and reports on lessons learned from the SME capacity development engagement and SME improvement to be shared with the HPG, PMOs and ADB, and a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

109. The purpose of this capacity development module is to provide SMEs in non-coal pillar industries with the needed sector-specific support and technical capacity development. The sector experts involved will come from green food processing, graphite, machinery, technology, wood processing, furniture industry, trade and logistics, tourism, and others as needed by the SMEs supported by this BDS consulting services.

110. The scope of work for the respective specialists will include (i) supporting SME companies validate their business plans, and helping them prepare bankable project investment proposals and, if ready, propose them as possible FIC pipeline subprojects; (ii) determining how the services and a possible FIC or other financing support i.e., through a loan would be deployed; (iii) providing SMEs with ongoing clinical and incubational advisory services and practical advice on performance improvements; (iv) sharing industry best practices and development trends with SMEs; and (v) mentoring and supporting SME senior management, product design engineers, and production engineers on improvements of product design and marketing.

111. Detailed tasks to be carried out by the team of industry specialists will include but not limited to the following: (i) validating business plans for BDS and FIC support candidate companies, and how BDS and FIC support would be developed and deployed; (ii) reviewing and evaluating current products, production techniques and methods, and technology used by candidate SMEs; (iii) identifying strengths and weaknesses and areas for improvement, and coordinating with BDS office for support from SME technical, financial, and business strategy specialists as needed;

(iv) sharing sector best practices and competitor moves on a regular basis; (v) mentoring senior management (including business owners) to implement industry best practices and business planning; (vi) designing actions to strengthen the talent quality of the BDS and FIC company product development team; and (vii) working with sector resources including customers, suppliers, research and development partners and business development service partners on as needed basis; and preparing training materials and reports on lessons learned from the SME capacity development engagement and SME improvement to be shared with the HPG, PMOs and ADB, and a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

112. The cost estimates for consulting services are in Table 25.

Table 25: Cost Estimates for Contract Package CS2 ($'000) Item Amount Financed by the ADB loan 1. Consultants a. Remuneration and per diem i. International consultants 799 ii. National consultants 1,460 b. International and local travel 120 c. Reports and communicationsa 10 2. Equipmentb 552 3. Workshops, training, seminars, and conferences 340 4. Surveys 100 5.Office support, etc. 264 6. Provisional Sum i. Research and development technical supportc 1,960 ii. Web-based small and medium-sized enterprise service platform 200 7. Contingencies 167 Total 5,972 ADB = Asian Development Bank. Note: Not included in the calculation is the counterpart funding from local governments to be provided in-kind including office space with desks and chairs, local transport in project cities for project meetings and site visits; qualified fulltime counterpart personnel in the PMOs to work with the consultants; and access to all data, including documents, reports, accounts, drawings and maps, and permissions. a Includes communications facilities, printing and binding of reports, and translation of inception, interim, draft final, and final project reports and other TA output documents into Chinese. b The equipment will be procured according to ADB’s Procurement Guidelines (2015, as amended from time to time). All equipment will be turned over to the executing agency upon completion of the activities. c Includes engagement of highly specialized technical experts or resource persons to support specific needs of SMEs for research and development of products and/or production process design, design of marketing or distribution and other areas that may require in-depth support to SMEs that participate in the BDS program. Source: ADB estimates.

D3. Consultant’s Terms of Reference for Consulting Services Package CS3: External Resettlement and Social Monitoring and External Environment Monitoring Consulting Services – Four packages, one for each of the project cities: CS3A (Hegang), CS3B (Jixi), CS3C (Qitaihe), and CS3D (Shuangyashan)

113. The PMOs of the four implementing agencies, the project cities, will each recruit a national consulting firm, or institute with a team of qualified and experienced external monitoring experts through CQS. The external monitoring experts should have the following qualifications and

experience: University degree in a relevant field (social science, engineering, and land management); experience in working in urban development projects and with vulnerable households and on civil and environmental engineering and monitoring projects; demonstrated knowledge and experience in applying best practices in involuntary resettlement, social and gender development plans, and environmental management plan implementation; at least 5 years of experience in the formulation and implementation of resettlement plans and SGAPs, and EIAs and EMPs; and proficiency in English report writing.

A. External Resettlement and Social Monitoring for each: CS3A (Hegang), CS3B (Jixi), CS3C (Qitaihe), and CS3D (Shuangyashan)

1. External Monitoring of Resettlement Plan Implementation and Safeguards Monitoring

114. One of the provisions in the resettlement plan is the engagement of an external resettlement monitor to carry out monitoring and evaluation of social safeguard compliance of the project during and after resettlement implementation as well as the Social and Gender Action Plan (SGAP). Four national resettlement and social consulting firms or institutes will be engaged, one for each project city for the whole duration of project implementation to act as external monitors.

115. Team of specialists required. To carry out the scope of work and tasks outlined above, the four consulting firms will provide a total 68 person-months (four times two national specialists). The consultants will be duly qualified with respective relevant academic degrees equivalent to Masters Degrees or higher and have at least 8 years (team leader and social development and gender specialist) and 4 years (deputy team leader) of experience in their respective fields relevant to the project’s requirements.

Table 26: Summary External Resettlement and Social Monitoring Consultant Inputs CS3A CS3C (Hegang) CS3B (Jixi) (Qitaihe) CS3D National National National (Shuangyashan) (person- (person- (person- National Area of Expertise months) months) months) (person-months) 1 Senior resettlement specialist (team 4 4 4 4 leader) 2 Resettlement specialist (deputy 10 8 8 10 team leader) 3 Social development and gender 4 4 4 4 specialist Total 18 16 16 18 Source: Asian Development Bank estimates.

116. Objectives and requirements of monitoring and evaluation. Each external monitor will (i) assess the effectiveness, impacts and sustainability of land acquisition, compensation, and resettlement measures; (ii) determine whether such activities have met the safeguard policy requirements of the project; and (iii) extract and highlight lessons for future social safeguard policy formulation and project planning. All data and analysis will be disaggregated by gender, if applicable.

117. The external monitoring process will include the following activities: (i) review and verification of the internal monitoring reports and resettlement completion reports of the PMO;

(ii) identification and selection of project impact indicators; (iii) impact assessment (e.g., restoration of incomes and living conditions) through quantitative and qualitative studies; (iv) gender-sensitive consultations with affected persons; (v) assessment of compliance with government’s laws and regulations and the ADB Safeguard Policy Statement’s (SPS, 2009) involuntary resettlement policy requirements outlined in the resettlement plan; (vi) recommendations on the land acquisition process modification and adaptation measures; (vii) effectiveness of the grievance redress mechanism (GRM); and (viii) lessons learned.

118. External monitoring key indicators: (i) impacts of land acquisition on the affected households, especially the poor and other vulnerable households, (ii) economic status of the affected households, their employment status, income levels, and household assets with the assessment done against the pre-project baseline information; (iii) changes in the status of affected vulnerable persons, in terms of food security, household demographics, and livelihoods in relation to project impacts; (iv) degree of support the affected persons received through consultations, assistance in restarting income activities, and livelihood restoration (v) outstanding land acquisition and resettlement (LAR) or compensation issues (status and the time frame to complete and/or resolve them); (vi) perceptions of the affected persons regarding the implementation of the land acquisition and compensation payment processes; (vii) impacts on affected businesses (permanent and temporary); (viii) participation of affected persons in the implementation of the resettlement plan; (ix) level of consultations with affected persons by the PMO and relevant agencies; (x) effectiveness and fairness of valuation, compensation, and compensation disbursement measures; (xi) implementation and effectiveness of income restoration measures; (xii) effectiveness and fairness of the GRM process; (xiii) level of satisfaction among the affected persons in the post-resettlement plan phase; (xiv) adequacy of resettlement funds, their timely availability, and results of financial audits; and (xv) performance monitoring of LAR implementing agencies.

119. Monitoring methodologies will be but not limited to the following: (i) desk review and field visits; (ii) use of structured questionnaires; (iii) meetings with various departments and organizations, local officials, and affected households; (iv) focus group discussions (FGDs); and (v) key informant interviews. Separate meetings will be held with women and vulnerable households. Monitoring indicators and findings will be disaggregated by gender, if applicable.

2. External Monitoring of Social and Gender Action Plan

120. Each external social monitor will review the progress of SGAP implementation as part of the semiannual monitoring process. The consultant will (i) carry out external monitoring in accordance with the SGAP;

(ii) review the SGAP internal monitoring reports and guide and assist the PMOs and PIUs in carrying out the internal monitoring; (iii) monitor and evaluate performance of organizations responsible for SGAP implementation; (iv) collect sex-disaggregated baseline data to monitor the progress of SGAP implementation; (v) update the SGAP implementation progress matrix as part of the external monitoring, and submit it with external monitoring reports semiannually to ADB and executing agency; (vi) interviews, FGDs, and consultations will be carried out with the direct project beneficiaries, in addition to affected people to assess the progress of SGAP implementation; (vii) when the project is completed, carry out post-review on SGAP activities to collect sex-disaggregated quantitative data and conduct qualitative interviews (FGDs) with women on how the project has changed their quality of life; and (viii) complete any other tasks relating to SGAP external monitoring as required by PMOs.

B. External Environment Monitoring for each: CS3A (Hegang), CS3B (Jixi), CS3C (Qitaihe), CS3D (Shuangyashan)

121. This portion of the assignment is for the duration of project implementation to act as external environment monitor. Each of the external environment monitor experts will provide technical and management support to ensure compliance during project implementation with the environmental impact assessment and environmental management plan (EMP). The external environment monitor experts will be responsible for environmental management training, independent environmental verification, and appointment and management of licensed environmental quality monitoring institute(s) to conduct periodic environment quality monitoring. Specific tasks include: (i) assisting the PMOs and PIUs to establish a project-level environmental management system, consisting of relevant staffing, inspection, monitoring, grievance redress mechanism (GRM), and reporting; (ii) assessing project components’ environmental readiness prior to implementation based on the readiness indicators defined in Table EMP-6 in the EMP; (iii) assisting PMOs to update the EMP including the mitigation measures and environmental monitoring program therein, based on the detailed engineering design and submit for executing agency and ADB’s clearance and disclosure; (iv) assisting PIUs in contracting of environment supervision consultants for each civil works contract; (v) reviewing and clearing site EMPs; (vi) assisting the PMOs and PIUs to establish a GRM, and provide training for the GRM access points; (vii) conducting independent verification of the project’s environmental management performance, undertake site visits as required, identify any environment-related implementation issues, propose necessary corrective actions and reflect these in a corrective action plan; (viii) contracting local environmental monitoring stations or other licensed institutes to conduct environmental impact monitoring per requirements specified in the EMP during construction (Table EMP-6); coordinating the external environmental impact monitoring; comparing the predicted with the actual environmental impacts,

assessing the effectiveness of the mitigation measures, and suggesting enhancement measures, as required; (ix) preparing semiannual environmental monitoring and progress reports to ADB; (x) prior to midterm review mission, providing support to PMOs and PIUs in organizing public meetings in the project city/towns to present and discuss EMP implementation progress, solicit community opinions and concerns, and agree on required corrective actions; (xi) prior to project completion, organizing surveys in the project city/town to assess community satisfaction with project implementation, project outputs, and EMP implementation performance, and document the results in the PCR; (xii) providing input of environmental protection to progress report, midterm report, project completion report, and other project required documents; and (xiii) service completion report.

122. Team of specialists required. To carry out the scope of work and tasks outlined above, the four consulting firms will provide a total 56 person-months (four times two national specialists). The consultants will be duly qualified with respective relevant academic degrees equivalent to Masters Degrees or higher and have at least 8 and 4 years of experience in their respective fields relevant to the project’s requirements.

Table 27: Summary External Environment Monitoring Inputs CS3D CS3A CS3C (Shuangyash (Hegang) CS3B (Jixi) (Qitaihe) an) National National National National (person- (person- (person- (person- Area of Expertise months) months) months) months) 1 Team leader: Senior environment specialist 3 3 3 3 2 Deputy team leader: environment specialist 12 10 10 12 Total 15 13 13 15 Source: Asian Development Bank estimates.

C. Frequency of Monitoring and Reporting Requirements

1. Monitoring Schedule

123. Each external monitor will carry out semiannual monitoring for the entire implementation of resettlement plans and SGAP estimated to be 3 years between 2018 and 2020. Post-evaluation will be carried out during the fourth and fifth years estimated in 2021 and 2022, or within 24 months after completion of resettlement activities. Each external monitor for environment will carry out semiannual monitoring for compliance with EIA and EMP implementation during the entire implementation period of the project.

124. A monitoring report will include (i) a summary of field and document review findings; (ii) field observations and a summary of affected persons and social and environmental impacts and stakeholders’ views and suggestions and recommendations; (iii) major issues, grievances, and problems identified during field visits (existing and potential); (iv) recommendations on mitigation or prevention measures; (v) comments on internal monitoring (relevance, adequacy, and timeliness);

(vi) an assessment of previous external monitoring follow-up actions; and (vii) conclusion, which summarizes the above.

125. All monitoring reports will be written in English and Chinese languages. The city PMOs will ensure that information on the progress and status on all aspects of land acquisition and resettlement activities will be provided to the external monitor for verification.

126. Each external monitor will submit all the monitoring reports simultaneously to the executing agency, implementing agencies, and ADB.

127. Each external monitor will present its key findings and recommendations to the PMOs at least 2 days prior to the end of each monitoring period. The external monitor will submit monitoring reports (in English and Chinese languages) simultaneously to the executing agency and implementing agencies and ADB within 15 working days after completion of each monitoring activity. The external monitor is also required to revise the external resettlement and social monitoring reports and the external environment monitoring reports based on comments received from the PMO and ADB and submit the revised reports simultaneously to the PMO and ADB within 7 working days.

128. Photos, site photos, minutes of meetings, and attendance sheets, held with various stakeholders will be attached in the reports. Documents obtained during monitoring will also be attached as necessary.

129. Table 28 shows the monitoring schedule starting from 2018 and until 2 years after resettlement plan implementation actions completion.

Table 28: Schedule for External Resettlement and Social Monitoring and External Environment Monitoring and Reporting for each: CS3A (Hegang), CS3B (Jixi), CS3C (Qitaihe), and CS3D (Shuangyashan) Activities / Tasks Timing Submission of Report Semiannual monitoring 1 October–31 March 15 May Semiannual monitoring 1 April–30 September 15 November Post-evaluation monitoring 1 April–31 March 15 May

130. The estimated cost for the four external resettlement and social monitoring and external environment monitoring service firms is shown in Table 29.

D. Cost Estimates

Table 29: Cost Estimates for Contract Packages CS3: CS3A (Hegang), CS3B (Jixi), CS3C (Qitaihe), and CS3D (Shuangyashan) ($'000) Item CS3A CS3B (Jixi) CS3C CS3D (Hegang) Amount (Qitaihe) (Shuangyashan) Amount Amount Amount 1. Consultants a. Remuneration and per diem National consultants 180 160 160 180 b. Local travel 27 27 27 27 c. Reports and communicationsa 3 3 3 3 2. Surveys and resettlement and social data 40 40 40 40 collection, and environmental data collection including sampling

Item CS3A CS3B (Jixi) CS3C CS3D (Hegang) Amount (Qitaihe) (Shuangyashan) Amount Amount Amount 3. Contingencies 10 10 10 10 Total 260 240 240 260 a Includes printing and binding of reports, and translation of reports and other TA output documents into Chinese or English. Source: Asian Development Bank estimates.

D6. Consultant’s Outline Terms of Reference for Consulting Services Package CS4: Non-Revenue Water Reduction Pilot Consulting Services in Qitaihe

1. Consultant Inputs and Cost Estimates

131. This contract is proposed to be a single service delivery package using the ADB’s CQS procedure with an indicative budget of $180,000. This contract will aid on piloting nonrevenue water (NRW) reduction, district management areas (DMA), and pressure management schemes in Qitaihe.

132. The estimated specialists’ inputs are shown in Table 30 and cost estimates in Table 31.

Table 30: Summary of Consultant Input for Nonrevenue Water Reduction Pilot Consulting Services in Qitaihe National Area of Expertise (person-months) 1 Project manager 3 2 NRW control specialist 3 3 GIS application specialist 3 4 Modelling specialist 3 5 Water supply system optimization specialist 3 6 DMA specialist 3 7 Pressure management specialist 3 8 Water supply system dispatching and operation specialist 3 Total person-months 24 DMA = district metering areas, GIS = geographic information system, NRW = nonrevenue water. Source: Asian Development Bank estimates.

Table 31: Cost Estimates for Contract Package CS4 ($'000) Item Amount 1. Consultants a. Remuneration and per diem national consultants 140.0 b. Local travel 20.0 2. Contingencies 20.0 Total 180.0 Source: Asian Development Bank estimates.

2. Scope of Work

133. The scope of work for the consultant team of specialists will include but not be limited by the following tasks: (i) designing NRW reduction pilot scheme for two residential compounds in Qitaihe; (ii) developing a NRW control plan for the pilots; (iii) providing recommendations for an organizational structure to institutionalize NRW management in Qitaihe;

(iv) reviewing existing data and format of water supply system of Qitaihe; (v) establishing hydraulic model for the water supply system and enter data in GIS to be given to the government after completion of the contract; (vi) piloting DMA management and pressure management schemes; (vii) providing reports on DMA management and pressure management in Qitaihe and recommendations for improvements; (viii) reviewing water supply network status and providing suggestions on system optimization to ensure stable operation; (ix) providing guidance on development and management of water system emergency response plan; (x) optimizing the pilot operation during implementation; (xi) drawing lessons learned and developing a comprehensive report including an executive summary including a recommended NRW control plan; (xii) developing a NRW control plan for the water supply system of Qitaihe; and (xiii) carrying out training on modelling, software application, dispatching and operation, DMA management, pressure management, etc.

3. Reporting Requirements

134. All reports required for the consulting service package CS4 under the project must be prepared in both English and Chinese language. The PMOs will decide on the number of copies of reports to be provided by the consultants to the PMOs and will distribute reports to relevant PIUs and local government agencies and an electronic copy of all reports in English language will be submitted to ADB.

D5. Consultant’s Terms of Reference for Consulting Services Package Bundle CS5: Project Implementation Startup Support Consulting Services (Individual Consultants)

1. Objectives and Scope of Work

135. Individual consultants will be engaged under this package bundle work directly with the PMOs. The purpose of the project implementation start-up support consulting services is to assist the PMOs in project implementation startup activities to accelerate and facilitate timely implementation before the loan implementation consultant engaged under package CS 1 is engaged. The individual consultants are expected to (i) procure national companies for construction supervision; (ii) procure an international company for project support and capacity development; (iii) assist the PMOs and PIUs in preparing civil works and procurement contracts; (iv) update resettlement plans and provide support to resettlement activities; (v) update and provide further detailed environmental management plans for advance procurement packages; (vi) establish a filing system for document reporting, tracking, and retaining, (vii) develop project financial management manual; (viii) support project financial management, withdrawal application preparation and disbursement; and (ix) provide training as necessary.

2. Consultant Inputs

136. The start-up support consulting services will include a total input of 16 person-months by 6 individual national consultants to work directly with the PMOs and PIUs. The individual experts will be engaged in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). The consultants will be selected and engaged following the individual

consultant selection (ICS) method and will work on an intermittent basis with a schedule agreed with the PMOs. The six experts to be recruited are in Table 32.

Table 32: Summary of Project Implementation Startup Support Consulting Services CS5 National Area of Expertise (person-months) National Project procurement and management specialist 3 Resettlement specialist 3 Environment specialist 3 Project and SME financial management specialist 3 SME business strategy specialist 2 SME sector specialists (sector qualification based on demand) 2 Total 16 SMEs = small and medium-sized enterprises. Source: Asian Development Bank estimates.

3. CS 5.1: Project Procurement and Management Specialist

137. The procurement specialist will have a university degree or above in management, accounting, or related field with demonstrated knowledge in procurement procedures and processes. S/he will have at least 10 years of experience in procurement of civil works, goods, and services in the PRC, including international competitive bidding, preferably on projects funded by the ADB or other international funding agencies. Knowledge of ADB or other international funding agency procurement guidelines and procedures will be required. This position requires an English language proficiency. Tasks and responsibilities of the specialist include but are not limited to the following: (i) organizing and maintaining a project filing system according to specifications by the PMO and ADB in both hard copy and electronic files and will be used by all startup consultants and the PMO offices; (ii) providing administrative and operational assistance to the PMOs; (iii) assisting in the preparation of procurement packages for advance contracting; (iv) organizing procurement processes and preparing documents, including bidding documents, specifications, bid evaluation reports, etc., for preparation of procurement packages intended for advance contracting; (v) providing assistance to the PMOs and to the tender evaluation committee during the tendering process in preparing the following in accordance with ADB procurement guidelines: (a) detailed terms of reference for relevant packages in consultation with relevant technical experts, (b) invitations to bid, (c) answers to bidders’ queries, and (d) bid evaluation reports; (vi) coordinating with ADB during tender evaluation; (vii) assisting the PMOs in preparing necessary documents for contract signing and contractor/consultant mobilization; (viii) preparing a report on the status of project startup and procurement; and (ix) handover documents and files to the project implementation support consultant firm and reporting on the status and outstanding issues.

4. CS 5.2: Resettlement Specialist

138. The Resettlement Specialist will have a university degree or above in resettlement, social, or related field with demonstrated experience. S/he is proficient in English and shall have at least 10 years of experience in resettlement in the PRC on projects funded by ADB or other international funding agencies. Knowledge in resettlement safeguard policies and procedures by

ADB or other international funding agencies is required. Tasks and responsibilities of the resettlement specialist include, but are not limited to the following: (i) assisting the implementing agencies to update the resettlement plans based on final design, meaningful consultation with affected people, detailed measurement surveys, and census of affected persons; (ii) assisting implementing agencies and/or PIUs to ensure adequate resettlement readiness prior to implementation; (iii) assisting the PMOs and/or PIUs to establish an effective grievance redress mechanism with reporting of complaints, follow-up actions, and results; (iv) providing training to the PMOs and the PIUs so they understand ADB policies and compliance requirements for resettlement safeguard; (v) assisting the PMOs and PIUs in establishing an internal resettlement monitoring and reporting system, which will be included in project progress reports; and (vi) assisting the PMOs and PIUs in handing over relevant documents and files on project implementation support to the consultant firm (package CS1) and brief them on the preparation and implementation status and outstanding issues.

5. CS 5.3: Environment Specialist

139. The Environment Specialist will have a university degree or above in environmental or civil engineering, or related field with demonstrated relevant experience. S/he is proficient in English and shall have at least 10 years of experience in environmental impact assessment in the PRC on projects funded by ADB or other international funding agencies. Knowledge in environment safeguard policies and procedures by ADB or other international funding agencies is required. Tasks and responsibilities of the environment specialist include, but are not limited to the following: (vii) assisting the implementing agencies to update the environmental impact assessments and environmental management plans based on final design; (viii) assisting implementing agencies and/or PIUs to design adequate mitigation measures to reduce the expected adverse environmental impacts; (ix) ensure adequate environmental management readiness prior to implementation; (x) assisting the PMOs and/or PIUs to establish an effective grievance redress mechanism with reporting of environmental impact related complaints, follow-up actions, and results; (xi) providing training to the PMOs and the PIUs so they understand ADB policies and compliance requirements for environmental safeguard; (xii) assisting the PMOs and PIUs in establishing an internal environmental monitoring and reporting system, which will be included in project progress reports; and (xiii) assisting the PMOs and PIUs in handing over relevant documents and files on project implementation support to the consultant firm (package CS1) and brief them on the preparation and implementation status and outstanding issues.

6. CS 5.4: Project and Small and Medium-sized Enterprises Financial Management Specialist

140. The Financial Management Specialist will have a university degree or above in financial management or related field with demonstrated experience. S/he is proficient in English and shall have at least 10 years of experience in financial management in the PRC on projects funded by ADB or other international funding agencies. Knowledge in financial management requirements and procedures by ADB or other international funding agencies is required. Tasks and responsibilities of the resettlement specialist include, but are not limited to the following:

(i) assisting the implementing agencies to prepare financial management manual, (ii) assisting implementing agencies and/or PIUs to establish a project accounting system for the project, (iii) assisting the PMOs and PIUs to prepare withdraw applications, (iv) providing training to the PMO and PIUs so they understand ADB requirements and procedures, (v) validating BDS and FIC companies’ internal financial management procedures and results; (vi) analyzing the current financial management issues and the resources needed to resolve the issues; (vii) if need be, proposing alternative financial management models and methodologies to be implemented together with the BDS and FIC company financial management staff; (viii) assessing the current capacity of the BDS and FIC company financial management team; (ix) mentoring financial management on effective internal financial management and investor relationship maintenance; (x) designing actions to strengthen the talent quality of the BDS and FIC company financial management team; (xi) sharing best practices and competitor moves on regular basis; (xii) connecting with investor resources including but not limited to commercial banks, private equity funds, venture capital funds, etc.; and (xiii) coordinating with BDS office for support from SME sector specialists and business strategy specialist.

7. CS 5.5: Small and Medium-sized Enterprises Business Strategy Specialist

141. The SME business strategy specialists will have a university degree or above in business management and corporate strategy with demonstrated experience. S/he is proficient in English and shall have at least 10 years of experience in business management and corporate strategy. In addition, the specialist should have managerial experience of at least years and previous experiences as mentor or trainer. The specialist will be engaged on an intermittent basis and work in coordination with the SME financial specialist and SME sector specialist, and environment and resettlement and social development and gender specialists responsible for environmental and social management system (ESMS) support. Tasks and responsibilities include, but are not limited to, the following: (i) conducting overall business clinic services and develop major business action plans for next 3 years; (ii) validating business plans for FIC sub project companies and how FIC loan will be deployed; (iii) monitoring overall business health and advising on how to optimize business operations including but not limited to market segmentation, sales force management, product and technology advancement, channel management, branding and promotion; (iv) mentoring senior management (including business owners) on leadership development, and business planning; and (v) coordinating with BDS office for support from SME sector specialists and financial specialist.

8. CS 5.6: Small and Medium-sized Enterprises Sector Specialist

142. The SME sector specialist will have a university degree or above in any one of the following specific industries: tourism, green agriculture, graphite, technology, and furniture with demonstrated experience. S/he is proficient in English and shall have at least 10 years of experience in the respective non-coal pillar industry mentioned above in the PRC. In addition, the specialist should have managerial experience of at least 7 years and previous experiences as mentor or trainer. The specialist will be engaged on an intermittent basis and work in coordination with the SME financial specialist and SME business strategy specialist, and environment and resettlement and social development and gender specialists responsible for ESMS support. Tasks and responsibilities include, but are not limited to, the following: (i) validating business plans for FIC sub project companies, how FIC loan will be deployed; (ii) identifying other functional areas for improvement, and coordinating with BDS office for support from SME financial specialist and business strategy specialist; (iii) sharing sector best practices and competitor moves on regular basis; (iv) mentoring senior management (including business owners) to implement industry best practices and business planning; (v) designing actions to strengthen the talent quality of the BDS and FIC company product development team; and (vi) connecting with sector resources including customers, suppliers, research and development partners and business development services partners on as needed basis.

9. Cost Estimate of Consulting Services Contract Package Bundle

143. The estimated total cost for the contract package bundle CS5 consisting of individual contracts is in Table 33:

Table 33: Cost Estimates for Contract Package Bundle CS5 ($'000) Item Amount 1. Consultants a. Remuneration and per diem National consultants 140 b. Local travel 15 2. Contingencies 15 Total 170 Source: Asian Development Bank estimates.

VII. SAFEGUARDS

144. Pursuant to ADB's Safeguard Policy Statement (SPS, 2009) ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth in Appendix 5 of the SPS. All financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list to the project components financed by ADB.

145. The safeguard categories are C for environment, involuntary resettlement, and indigenous peoples for the additional financing, while the overall project safeguard categories remain.

A. Environment

146. Environment due diligence. The project is classified as Category A for environment. A comprehensive environmental impact assessment (EIA) report, including an environmental management plan (EMP) will be prepared and disclosed on the ADB website. The EIA incorporates the results of the Domestic EIAs that will be submitted for approval by the project city environment protection bureau (EPBs). The EIA complies with ADB’s policies and requirements including ADB's Safeguard Policy Statement (SPS, 2009). The EIA concludes that the project’s anticipated environmental impacts can be mitigated through full and effective implementation of the EMP.

147. In addition, the project involves financial intermediary loan to support business development for small and medium-sized enterprises (SMEs). This component is classified as category FI that must apply an environmental management system.

148. Environmental management plan. The project EIA and EMP, which are based on the domestic FSRs and DEIAs, forms the basis of the official loan agreement between ADB and HPG. The EMP is the key document to be used by the HPG and contractors to manage and report on the environmental impacts of project construction and operation. The EMP defines the mitigation measures, monitoring program, GRM, public consultation plan, and roles and responsibilities for the project agencies. The HPG, through the PMO of each project city, holds final responsibility for implementation and compliance with the EMP. The HPG and implementing agencies will be responsible for ensuring the project is designed, constructed, decommissioned, and operated in accordance with (i) the national and local government environmental, health and safety laws, regulations, procedures, and guidelines; (ii) ADB’s SPS; and (iii) the EMP. A full-time Environmental Officer has been assigned in each PMO to coordinate implementation of the EMP. The effectiveness of the mitigation measures will be evaluated through environmental inspections and monitoring. The loan implementation environment consultants will support the PMO and contractors to implement the EMP.

149. Environmental management plan update and bidding documents. In the design stage the PMO will forward the EMP to the design institutes for incorporating mitigation measures into the detailed technical designs. The EMP will be updated at the end of the detailed design, as needed, reviewed by ADB, and re-posted on the ADB website. To ensure that contractors comply with the EMP, the PMO will prepare and provide the following for incorporation into the bidding documents: (i) a list of environmental management requirements to be budgeted by bidders in their proposals, (ii) environmental clauses for contractual terms and conditions, and (iii) the updated EMP. The contractors and supervision companies will incorporate the EMP mitigation measures in their construction plans and will also be responsible for internal environmental monitoring during construction. Environmental impact monitoring will be conducted by the

Environment Monitoring Stations, contracted by the PMO. Assurances for environmental safeguards have been prepared and are included in the loan and project agreements.

150. Environmental benefits. The impact of the project will improve the environment by cleaning up the mine sites in the four cities, reducing the cities’ coal mining activities, dredging the rivers and enhancing water and ecological environment and the quality of life. Other project benefits include (i) energy saving in retrofitting heating network, (ii) energy saving and reduction of gas emission by using electrical buses, and (iii) improvement of the existing sewerage network and wastewater treatment plants capacity and quality standards help reduce polluted sewage discharging to the rivers.

151. Potential impacts. Potential environmental impacts of the project are mainly during the construction stage, including air, noise, water quality, solid waste, and disturbance to some habitats of the rivers. During EIA preparation, consultations were conducted with key stakeholders and the outcomes have been integrated into the project design. Impacts will be avoided and/or mitigated through implementation of the EMP. The EIA concludes that full and effective implementation of the EMP, together with the prescribed capacity training, will result in minor residual impacts that are within the limits of the PRC standards defined in the EMP.

152. Public consultation and grievance redress mechanism. Information disclosure and two rounds of public consultations were conducted during the EIA in accordance with the PRC Guideline on Public Consultation in EIA (2006) and ADB’s SPS. Public concerns about air and flood control were documented and have been addressed in the project design. A project- specific GRM has been established to receive and manage any community concerns which may arise due to the project. The PMO is the lead agency that will have final responsibility for management, implementation, and reporting of the GRM. The PMO Environmental and Social Officers will coordinate the GRM and the following tasks: (i) instruct the PPEs, local EPBs, and contractors on their responsibilities in the GRM; (ii) establish a simple registry system to document and track grievances received (including forms to record complaints and how they have been resolved); (iii) report on progress of the GRM in the quarterly project progress reports and the semiannual environmental and resettlement monitoring and progress reports to ADB; and (iv) arrange future public consultations for the project. The GRM procedures, reporting timelines, roles and responsibilities of all agencies, and GRM contact persons in each PPE, are described in Section G of the EMP.

153. Capacity building. Capacity building in environmental management will be provided to the PMO, implementing agencies, contractors, and construction and supervision companies in accordance with the training plan in the EMP, to ensure adequate institutional capacity in managing the environmental impacts. The training will include (i) implementation of the EMP for mitigation, monitoring, and reporting; (ii) improved WWTP operations to ensure that they are done properly per design intensions; (iii) inclusion of the EMP in project tenders and review of bids; and (iv) implementation of the GRM, including access points, roles, and responsibilities for project agencies.

154. The HPG shall make available, and cause the Implementing Agencies to make available, the necessary budgetary and human resources to fully implement the EMP. If any unanticipated environmental risks and impacts arise during construction or operation of the project that were not considered in the EIA and/or EMP, the HPG, through the implementing agencies, should

promptly inform ADB in writing of the occurrence of such risks or impacts, with detailed description of the event and the proposed action plan for incorporation in the updated EIA and EMP.

B. Resettlement

155. The project is classified as category A for involuntary resettlement according to ADB’s SPS (2009).

156. It is estimated that 318 households (1,075 persons) will be permanently affected by impacts on the collective farm land (908.37 mu).27 The impacts on the households are found to be marginal since the percentage of loss and annual income loss per capita income are not more than 10%. State-owned construction land will also be permanently occupied (197.25 mu). In terms of temporary impacts due to installation of water supply, drainage, sewer, and rainwater pipelines; 30 mu of collective land (12 households with 42 persons); and 631.65 mu of state-owned construction land will be affected. Impacts on houses are found to be significant since there are about 296 households (700 persons) affected by house demolition (31,704 m2) and will be required to relocate. About 10 stores (32 persons) were identified as affected, and 6 public and private organizations (1,530 workers) will also be affected by impacts on structures.

157. The government will ensure that (i) the four resettlement plans for Hegang, Jixi, Qitaihe, and Shuangyashan agreed between the government and ADB are updated based on meaningful consultation, final detailed design and detailed measurement surveys, and submitted to ADB for review and concurrence prior to land acquisition and house demolition activities and prior to contract award of concerned civil works contracts, and be implemented in accordance with applicable government laws and regulations and ADB’s Safeguard Policy Statement (2009); in case of any inconsistency between government laws and ADB’s policy, the latter will prevail; (ii) all affected persons are given adequate opportunity to participate in resettlement planning, updating, and implementation; (iii) counterpart funds for land acquisition and resettlement activities are provided according to the budget based on the finalized resettlement plans and project schedule; (iv) any additional costs in excess of the resettlement plan budget estimates are met within the project schedule; (v) all PMOs will designate adequate staff and resources to supervise and monitor updating and implementation of the resettlement plans and submit semiannual internal monitoring reports to ADB and will provide capacity development and/or training on involuntary resettlement safeguards issues and due diligence to the PMO staff and concerned resettlement agencies; (vi) a functional and effective GRM is established; and (vii) an external monitoring agency acceptable to ADB is engaged by the government and financed from the ADB loan to monitor progress and evaluate results of implementation of the resettlement plans. The external monitor will submit semiannual external monitoring reports simultaneously to the PMOs and ADB.

C. Ethnic Minorities

158. The project is categorized as C for the Indigenous Peoples Safeguard. Ethnic minorities account for less than 4% of the population in project cities; and less than 4% in Qitaihe City. The minority population in those cities is extremely scattered, and the differences to the Han population in terms of language, customs, lifestyle, livelihood, and social security are minimal. The due diligence assessment confirmed that the ethnic minorities will benefit from the project as much as Han people, and they will suffer no negative impact, except for eight households with 22 people who will be affected by LAR.

27 A mu is a Chinese unit of measurement (1 mu = 666.67 m2).

159. Prohibited investment activities. Pursuant to ADB’s SPS, ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. Applicable for the FIC component: All financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list (Appendix 5) to subprojects financed by ADB. Details are in PAM Section B: Financial Intermediation Component and Business Development Services Component.

D. Environment and Social Management System for the Financial Intermediary Loan Component

160. An ESMS arrangements was established for the FIC component. Eligibility criteria allow subprojects with Category C and Category B for environment, involuntary resettlement and indigenous peoples safeguards. Category A projects for environment, involuntary resettlement and indigenous people are excluded from financing under the FIC funded from the ADB loan. ESMS screening, safeguards categorization, monitoring and reporting has been established and adopted by the two financial intermediaries, Harbin Bank Corporation and Longjiang Bank Corporation. Consultants will support the financial intermediaries with due diligence, screening, safeguards categorization, and support due diligence and report preparation and provide training and capacity development. Details are in the Linked Document: Financial Intermediary: Environmental and Social Management System Arrangement.

E. Climate Risk and Climate Financing

161. Climate financing investment for the overall project is estimated at $320.6 million. Climate mitigation financing is estimated to cost $148.6 million, and climate adaptation financing is estimated to cost $172.0 million. ADB will finance 27.4% of mitigation costs and 38.2% of adaptation costs. Detailed climate-risk vulnerability assessment findings are in the Supplementary Document: Climate-Risk and Vulnerability Assessment. Climate financing investment for the additional financing is estimated at $62.8 million. Climate mitigation financing is estimated to cost $24.0 million, and climate adaptation financing is estimated to cost $38.8 million.

162. Overview of climate change and climate risks. The climate-risk vulnerability assessment key findings were that temperature and precipitation will increase between 2.5°C and 3.3°C, and 9.8% and 11.5% by 2050 in east Heilongjiang. It is also projected that frequency and intensity of extreme weather events will increase significantly. Those may include severe snow and rainfall storms, drought and floods caused by greater inter-annual and seasonal climate variability. An assessment of the project’s climate risks was carried out and proposals for sufficient proofing and/or adaptation measures were included in the feasibility study designs.

163. Climate risks to economy and to non-coal diversification sectors. Climate change is likely to affect many sectors of the regional economy in the subregion. Agriculture is one of the major sectors to be affected by changing temperature and precipitation regimes. For example, new crop and/or varieties may be required to be adopted to maintain or improve productivity. Changed temperature and precipitation regime may cause changed insects/disease patterns and cycles that required improved control measures. Extreme weather events may cause damages to crops, agricultural infrastructure and so on. Other sectors, such as transport and logistics, are also vulnerable to increased intensity and frequency of severe snow and storm events. Another issue is that pillar industries of the subregion are mostly high greenhouse gas (GHG) emission industries. There is a risk that such industries may be restricted by national and provincial policies

in the future. Therefore, the priority of economic transformation should be given to those more environment-friendly and sustainable industries.

164. Climate risks to regional water resources. Many provincial government proposed alternatives industries are closely relating to available water resources, such as irrigation development and coal-fired power stations. Although the projected precipitation is likely to increase in the region, the available water resource is still likely to be a limiting factor to the regional economy because of the increases in inter-annual variability and increased evaporation caused by rising temperature. Resilience can be built by developing integrated regional water resource management, with consideration on climate change causing potential changes in water resource.

165. Climate risk of increased flooding. Flood is an issue of the subregion, which are not only caused by local intensive precipitation but also from upstream of the Songhua River or Heilongjiang River when intensive precipitation falls in upstream catchments of those rivers. There are also several river rehabilitation project components in the ADB project. Therefore, hydrological and hydraulic models have been developed to address flood and stormwater drainage issues. Based on rainfall runoff and hydraulic modelling results, the height of river levees was raised for 0.1m than the initial design of FSR for river rehabilitation works in Hegang and Jixi. Conservation measures on both sides of river banks are also included in the design, which is considered as a dual benefit activity to climate change, which is not only conserving river bank areas from erosion caused by floods and severe storms but also a mitigation measure as those trees and plants are also reducing GHG.

166. Because of increased intensity of rainfall or severe storms, an extra 10% of draining capacity is also designed for road surface drains and culverts of road works, stormwater drainage pipelines, and other drainage related works to ensure infrastructure is not flooded during severe storm events. However, it is also recognized the design standard for those cities are fairly low. Unlike river rehabilitation requirements of recurrence periods of 20 and 50 years for small tributaries and rivers, those drains, culverts, and pipelines are designed only for a 2-year recurrence interval. Based on the sponge city concept, the PRC Government requires more green fields in the roadside and residential areas to retain more stormwater instead of building large drainage pipelines. Therefore, more roadside and urban conservation areas are designed in the projects, which is again dual benefit activity to climate change.

167. The rising temperature will cause increased water consumption from households, industries and all other urban services. This will also cause increased volumes of sewerage and/or wastewater in cities and industrial parks. Therefore, a 5% of increases are designed for the water treatment plants, wastewater treatment plants, and water supply and sewerage and wastewater pipeline networks. The increased sewerage pipeline size is only designed for the future increased water consumption rather than stormwater because they are separated networks in the design.

168. Improved drainage systems are also included in the smart transport project component in the process of building bus lanes, bus stop bays, and non-motorized vehicle lanes. This is because the existing road drainage system was not sufficiently designed and built. Improving such drainage networks s also an important adaptation activity.

169. Energy saving measures are designed in all relevant project components. For example, LED light systems are designed for all road and bridge project components and others such as service center in Hegang and cultural plaza in Jixi. Extra insulation and other energy saving

measures are also designed for these buildings and heating pipelines to reduce energy consumption.

170. There are some significant adaptation and mitigation project components in this project. Those mining site remediation projects are mostly remediating the mining sites and/or waste rock piles and then planting trees and recovering the vegetation. The remediation works are mainly adaptation activities whilst vegetation restore activities are dual benefit activities. The Qitaihe public transport is a typical mitigation activity by replacing the current diesel buses with electrical buses. The smart transport component of Hegang included some substantial adaptation by improving the road drainage system but also a significant mitigation activity by encouraging usage of buses and non-motorized vehicles.

171. In addition to those structural proofing/adaptation measures, non-structural adaptation measures are equally important for the subregion in adapting future climate and reducing climate risks. Firstly, it is important to raise the awareness of government agencies of those project cities. Climate change related workshops and study tours may help relevant project officers and leaders understanding climate risks to their project and city as well as the needs for adopting adaptation and mitigation measures in the process of project implementing. More importantly, such understanding and comprehension of climate risks will help the government official to integrate climate change adaptation and mitigation in their policy formulation process and reducing climate risks.

172. Structural proofing/adaptation measures designed in this project are mostly for a section or part of the infrastructure. For example, river rehabilitation works are all for a section of the whole river, therefore, it will not prevent the whole river from flooding. Non-structural adaptation measures can be a supplementary to the structural measures built in this project. It is recommended that whole catchment conservation plans to be developed for Hegang and Jixi, where rivers and lakes will be rehabilitated in this project. similarly, it is also recommended such plans to be developed for upstream catchment of water supply reservoirs. Those include catchments of Xingkai Lake in Jixi, Taoshan reservoir of Qitaishan, and water protection catchments of Shuangyashan.

173. Water resource is very important to the economy and industries of east Heilongjiang subregion. The water resources of the subregion may face challenges of competing uses by many of currently planned economic development activities. Climate change will exacerbate such competition because of greater inter-annual and seasonal precipitation variability and increased frequency and intensity of droughts. Developing integrated water resource management (IWRM) plans at the city level will help reduce risks of water shortage and drought caused by climate change. IWRM will also help project cities in developing their economic policies and infrastructure in response to climate change. Water saving is also an important issue for industries and urban services of project cities, which should also be included in the IWRM plans.

174. In addition to those non-structural adaptation measure, it is also recommended that ADB fund further studies on the heating supply system, especially its pricing system. The current heating supply system adopting fixed pricing based on the housing area made it difficult for government and heating supply companies to meet the needs of different resident groups and causes overheating in most of times during the long and harsh winter. A flexible pricing system based on individual heat/energy consumption is likely to reduce energy consumption, GHG, and air pollutant emission from heating system in northern PRC cities.

175. Data availability has also limited the accuracy of hydrological modelling. Firstly, there is no river gauging data available for all five rivers being rehabilitated in this project. This makes it difficult to validate the hydrological modelling results with observed river flows and stages. Secondly, the flood peaks are often affected by short, but intensive precipitation events rather than by daily precipitation totals but such data is not available to the team. Therefore, the accuracy of the hydrological modelling results is the best possible data with the available data but are improvable should those data were available to the study.

VIII. GENDER AND SOCIAL DIMENSIONS

176. A poverty and social assessment (PSA) was undertaken during the project preparation phase in accordance with ADB guidelines on gender and social dimensions. The PSA included a review of secondary data, a household survey, focus group discussions (FGDs) and key informant interviews. The PSA assisted in the design of the various subcomponents to ensure they are socially inclusive and implemented with a high degree of community participation, especially for the local people including women, poor, and other vulnerable persons in the project areas.

177. The project will contribute to economic revitalization, non-coal industrial transformation, and socially inclusive, environmentally safe, and sustainable development of the four cities. Therefore, the project will contribute to poverty reduction by (i) improving public health, sanitation, and living conditions of local people; and (ii) supporting direct and indirect employment opportunities with expanded industries and enabling investment environment. It will support improved access to basic services, safety, and environmental sustainability through mining remediation, expanded and improved water supply, wastewater treatment, district heating, river rehabilitation, improved transport, and institutional coordination and capacity development. Based on the PSA, a SGAP has been formulated and agreed by the PMOs and implementing agencies. These actions will be implemented, progress will be monitored, and achievement of results will be measured and reported semiannually. The following sections provide some further guidance for the implementing agencies.

A. Summary Poverty Reduction and Social Strategy

178. The total combined population in project cities is 5.2 million with urban populations of 870,000 (Hegang); 1,180,000 (Jixi); 540,000 (Qitaihe); and 960,000 (Shuangyashan). As designated resource-depleted cities in the PRC, Hegang, Jixi, Qitaihe and Shuangyashan cities are facing huge employment pressures resulting from both PRC supply-side reform on restricting small coal mining enterprises and unprofitable operation of coal mining itself in the project area. Heilongjiang and the project cities face serious economic decline due to severe price cuts of coal and changes in the PRC’s energy and climate policy, with reduced revenues in these coal mining dependent economies. Urban poverty, declining wages and population loss have become serious challenges for the four cities. Based on the PSA, more than 10% of urban people in the project area are poor. The main causes of poverty are unemployment, underemployment, and lack of qualified labor force.

179. With its comprehensive urban and economic revitalization approach, the project is expected to help stop and reverse the out-migration of the younger qualified workforce and attract and retain residents, companies, and jobs to more attractive project cities. The project will directly benefit 2.73 million urban residents. The indirect beneficiaries are the entire populations of the project cities. Benefits include (i) stronger SME competitiveness and jobs creation in improved non-coal industrial parks; (ii) better public image through mining remediation; (iii) improved water supply, sewerage, district heating, flood protection, roads, road safety, and public transport;

(iv) greater environmental and traffic safety awareness through public education programs; and (v) increased cooperation between the project cities in tourism promotion, logistics and trade, supply chain integration, and SME support through smart city applications. By component, the project will benefit 2.18 million people (mining rehabilitation); 50,000 people in Hegang (district heating); 848,600 people excluding Hegang (water supply); 1.48 million people in Hegang and Jixi (river rehabilitation); 2.73 million people (road and traffic services); and 16,480 employees (industrial parks). The project will create 1,853 skilled and 5,430 unskilled jobs during project construction and 398 skilled and 138 unskilled jobs during the operation.

180. Key design features of the project are (i) strengthening public participation and information disclosure on the project, including training, employment, green and inclusive business development opportunities; (ii) creating job opportunities for the poor and women, and provision of relevant training; (iii) raising awareness on environmental protection, road safety, and flood risk management through public education programs; (iv) promoting women-owned/managed SMEs participation in FIC scheme program through information disclosure and awareness raising; and (v) developing human resource capacity, including laid-off workers through TVET. The social and gender action plan (SGAP) has been prepared for this project to ensure mitigation of adverse impacts on beneficiaries and to maximize benefits and positive impacts of the project. In addition, it ensures (i) protection of labor that will be employed on project works by raising awareness and providing training for the contractors/subcontractors and employees on core labor standards (i.e., equal pay for equal work, no child labor, equal job opportunities, etc.), and (ii) mitigation of communicable diseases including HIV/AIDS and STI, human trafficking and prevention. Implementation and monitoring of the SGAP is included in the loan assurances.

B. Social and Gender Action Plan

181. The project is categorized as effective gender mainstreaming. The SGAP has been prepared for the project. 28 The project will have significant benefits for women as they are primarily responsible for water collection and conservation, wastewater and solid waste disposal and management, as well as related household activities. According to the poverty and social analysis, women also use the public transport more often than men. Therefore, they considered improvements in traffic safety and access to better public transport service as important benefits to enhance their quality of life. Majority of female respondents support the project as it will generate more job opportunities locally for themselves and their family members.

182. The SGAP includes specific targets for women in employment during construction and operation, and participation that have been agreed by the PMOs and government agencies (i.e., Women’s Federation, Poverty Alleviation Office, Ethnic Minority and Religious Affairs Office, etc.). The following measures are included in the SGAP: (i) job opportunities during construction and operation (30%); (ii) consultation and participation opportunities in the design of location of bus stations, road and traffic safety facilities (50%); (iii) awareness raising on environmental protection, roads safety, river protection and flood risk management through public education program (50%); (iv) promotion of women-owned and managed SMEs and startups through FIC by providing targeted consultation and information disclosure to them (at least 30%), (v) 30% loans will be given to women-owned and/or managed SMEs and startups; and (vi) appropriate gender targets, indicators and sex-disaggregated data for project monitoring and evaluation. International and national social development specialists with gender expertise will be provided under the capacity development component to ensure the effective implementation of the SGAP. An assurance for implementation of the SGAP has been included. Activities and target indicators

28 An SGAP has been prepared for this project and is presented in the PAM and assurances.

included in the SGAP will be monitored through the project performance management system and project progress reports on a semiannual basis, and ADB supervision missions.

183. To address the risk of spread of HIV/AIDS/STI, the project requires (i) inclusion of clauses on HIV/AIDS/STI and other communicable disease awareness for the contractors/subcontractors and employees into contract bidding documents; (ii) conduct of public health and HIV/STI prevention education to the civil works’ contractors and labor force; (iii) establishment of health measures for construction workers (e.g., setting up a temporary infirmary, using local medical resources); and (iv) conduct of diverse publicity activities on HIV/AIDS (e.g., brochures, posters, and leaflets).

C. Other Social Aspects

184. As per the loan assurances, construction workers hired from the local communities will be trained on sanitation knowledge campaigns, health and occupational safety measures while working at the construction sites, and capacity building will be undertaken to protect their legal labor rights during construction or operations.

185. Labor issues. Core labor standards will be complied with based on national laws. Civil works contracts will stipulate priorities to (i) employ local people for works, (ii) ensure equal opportunities for women and men, (iii) pay equal wages for work of equal value, (iv) pay women’s wages directly to them, and (v) not employ children or forced labor. Specific targets for employment have been included in the SGAP. PMOs in conjunction with the implementing agencies are responsible for coordinating activities and ensure the implementation of the SGAP. The PMOs will monitor contractors’ compliance with these project assurances in conjunction with the Human Resources and Social Security Bureau, and Civil Affairs Bureau. The PMOs and implementing agencies shall assign or appoint one social development and gender (SDG) staff during project implementation to ensure timely and appropriate implementation of the SGAP. The SDG specialist in the project implementation consulting services will assist the PMOs and implementing agencies’ SDG staff.

186. Under the project management consulting services, SDG specialist (consultant) will be engaged to support the PMOs to implement the SGAP and other social aspects. It will be monitored internally and reported to ADB via semiannual progress reports. The SGAP will be monitored also by the external social monitor and reported through semiannual social monitoring reports.

Table 34: Social and Gender Action Plan Responsible Proposed Actions Indicators and Targets Agencies Timeline Budget Output 1: Capacity in business development services and integrated project planning and management developed (i) Consultations and information (i) Number and percentage of SMEs and startups with Implementing 2018– Project cost disclosure investment and application 30% target for women-owned and/or managed agencies, 2023 procedure SMEs PMOs (ii) Promotion of women-owned and/or (ii) Number of loans received by SMEs and startups of FIC, BDS managed SMEs during selection of which 30% is given to women-owned and/or Contractors SMEs for FIC support managed SMEs and startups Banks (iii) Outreach activities organized for (iii) At least 30 entrepreneurs trained and have entrepreneurs trained in business accessed finance, 30% of which will be women planning (baseline: 0) (iv) Non-coal SME projects in priority (iv) At least 15 non-coal SME projects in priority sectors sectors implemented implemented of which 30% are women leda (baseline: 0) Output 2: Sustainable small and medium-sized enterprises investment and access to finance in project cities improved (i) Design and build accessible bus stops, (i) Consultation with community residents on (i) Implementing 2018– Project cost bicycle pathways, sidewalks, identification of bus stops, traffic signs, sidewalks, agencies, 2023 crosswalks, and traffic signals, and pedestrian crossings PMOs setting-up warning signs or isolation (ii) Road traffic safety awareness education program for (ii) PIUs, design facilities on dangerous segments residents with 50% female and 30% poor people institutes (ii) Road traffic safety awareness program participation (iii) Contractors Output 3: Key infrastructure and small and medium-sized enterprises facilities in non-coal industrial parks in project cities constructed (i) Consultation and information (i) Number and percentage of people participating in the (i) Implementing 2018– Project cost disclosure on mining remediation and consultation with 50% women participation agencies, 2023 environmental cleanup for affected (ii) Well-lit roads with pedestrian and bicycle pathways PMOs communities (ii) PIUs (ii) Adequate infrastructure facilities in the (iii) Contractors remediated mining park in Jixi Output 4: Remediation and environmental cleanup from mining impacts in project cities improved Green and walkable streets and intelligent urban transport system (i) Consultation on locations of bus stops, (i) Number and percentage of people with 50% women (i) Implementing 2018– (i) UMBs’ bicycle pathways, sidewalks, participation agencies, 2023 operational crosswalks, and traffic signals, and (ii) Number and type of gender, age, and disability- PMOs costs setting up warning signs, or isolation sensitive design features, applying universal design (ii) Design (ii) Bus company facilities on dangerous segments principles, like well-lit sidewalks, roads, bus stops, and institutes operational (ii) Design of gender, age, and disability- terminals (including separate and safe facilities for (iii) UMBs costs sensitive road infrastructure and women); accessible sidewalks with ramps, low-floor, (iv) Bus facilities and kneeling buses companies (iii) Traffic safety awareness and education (iii) Number and percentage of residents participating in for residents the education program with 50% women participation

Responsible Proposed Actions Indicators and Targets Agencies Timeline Budget River rehabilitation and ecosystems-based adaptation (i) Identify proper locations of safety (i) Number and percentage of residents consulted (sex- (i) Executing 2018– (i) Project cost warnings, isolation facilities, and disaggregated) agency, 2023 (ii) Operational garbage bins along the rivers in (ii) Number and percentage of participants of education implementing costs of the consultation with residents program (disaggregated by sex and target groups, agencies, WABs (ii) Public education program on schools, and communities) PMOs environmental and river protection, (ii) WABs flood risk management, and public health for nearby communities and schools Water supply and wastewater treatment systems, heating subcomponents Public hearing for water supply and Number and percentage of people, with 50% women and (i) PMOs, PIUs 2018– Project cost wastewater (Jixi, Qitaihe, and 30% low-income people’s participation (ii) Price bureaus 2023 local government Shuangyashan), and heating tariff (iii) CABs, budget (Hegang) and bus fare (Qitaihe) heating company Output 5: Integrated urban infrastructure and services in project cities improved (i) Recruitment of SDG specialist as part of (i) SDG consultant recruited with 12 person-months input Executing agency, 2018– Project the loan implementation consultant (ii) One SDG focal person in each implementing agency implementing 2023 management and (ii) The PMOs and implementing agencies managing and coordinating SGAP activities agencies, and capacity assign at least one SDG specialist to (iii) At least 400 persons, of which 30% are women PMOs development be responsible for the implementation reporting new skills in (a) project management; (b) budget and reporting of the SGAP BDS capacity development to SMEs (50 (iii) PMOs and implementing agency staff entrepreneurs of which 30% are women); (c) labor are trained to ensure effective force assessment and TVET; (d) mining remediation; implementation of the project, (e) smart city and city cluster cooperation; (f) flood risk particularly SGAP management and sponge city; (g) water, wastewater, (iv) Sex-disaggregated data will be collected and drainage management and tariff reform; and (h) through the PPMS to ensure the sustainable urban transport and road safety monitoring, evaluation, and reporting awareness of the SGAP (iv) Collection of sex-disaggregated indicators and semiannual progress reports on SGAP For Outputs 1, 3–5: Generating job opportunities and measures to reduce potential risks (i) Generate 1,853 skilled and 5,430 (i) 30% of which are first made available to the low (i) PMOs, PIUs 2018– (i) Project unskilled jobs at the construction income and 30% to women (baseline for female (ii) Contractors 2023 construction stage construction workers 20%) (iii) LSSB, PAO, and operation (ii) Generate 398 skilled and 138 unskilled (ii) 30% of which are first made available to the low CAB, funds jobs at the operation stage income and 30% to women women’s (ii) Administrative (iii) Include HIV/AIDS and other (iii) Terms of construction contract and implementation federation cost of CDC communicable disease clauses into (iv) Public health and HIV/AIDS, STIs, and sexual (iv) Selected (iii) Cost of contract bidding documents harassment prevention training courses and number town, contractors (iv) Public health and HIV/AIDS, STIs, and of trainees (disaggregated by sex and target groups) township, sexual harassment prevention village, and

Responsible Proposed Actions Indicators and Targets Agencies Timeline Budget education program conducted, community committees BDS = business development service, CAB = civil affairs bureau, CDC = center for disease control, FIC = financial intermediary component, LSSB = Labor and Social Security Bureau, PAO = Poverty Alleviation Office, PIU = project implementation unit, PMO = project management office, PPMS = project performance management system, SDG = social development and gender, SGAP = social and gender action plan, SMEs = small and medium-sized enterprises, STI = sexually transmitted infection, TVET = technical and vocational education and training, UMB = urban management bureau, WAB = water affairs bureau. a Women-led SMEs are SMEs that are founded by women and/or have female senior executives.

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION

A. Project Design and Monitoring Framework

Impacts the Project is Aligned with Current project Economy revitalized and diversified, and non-coal industries in the cities of Hegang, Jixi, Qitaihe, and Shuangyashan developed (Heilongjiang Province’s Thirteenth Five-Year Plan)a Living environment, safety, and public health in cities of Hegang, Jixi, Qitaihe, and Shuangyashan improved (National New-Type Urbanization Plan, 2014–2020)b

Overall project Unchanged

Data Sources and Performance Indicators with Targets Reporting Results Chain and Baselines Mechanisms Risks Outcome By 2024 (baseline: 2016) Current project Current project Non-coal economic a. 2,000 person-year jobsc created in non- a–d. Annual reports of Limited success in activities and urban coal industries (baseline: 0) administrative attracting non-coal livability in project b. At least 15 non-coal SME projects in departments in SMEs because cities increased priority sectors implemented, of which Hegang, Jixi, the government at least 30% are women-ledd Qitaihe, and reverses Overall project (baseline: 0) Shuangyashan SME development Unchanged c. Land area affected by risks from mining cities; and project policies impact reduced by 188.7 ha (baseline: completion report not applicable) d. Urban residents’ rate of satisfaction with road, water supply, wastewater, and heating services increased to 60% (baseline: 42% [road], 25% [water supply], 12% [wastewater], and 20% [heating])

Overall project a–d. Unchanged Outputs By 2023 (baseline: 2016) Output 1 Current project Current project

Data Sources and Performance Indicators with Targets Reporting Results Chain and Baselines Mechanisms Risks Capacity for BDS 1a. At least 400 individuals (at least 30% 1a–1b. Project progress and integrated of them women) reported new skills in and completion project planning and project management; labor force reports; and management assessment and TVET; mining training developed remediation engineering, strategic materials and planning, and investment knowledge Overall project programming; smart city and city products Unchanged cluster cooperation and regional prepared by the planning; flood risk management and consultants sponge city design and investment planning;e water, wastewater, and drainage management; tariff reform and nonrevenue water reduction; and/or sustainable urban transport and road and traffic safety awareness (baseline: 0) 1b. BDS capacity development training provided to SMEs, and at least 50 entrepreneurs (at least 30% of them women) reported improved skills in business planning (baseline: 0)

Overall project 1a–1b. Unchanged Output 2 Current project Current project Sustainable 2a. At least $232 million for 2a–2b. Project progress PMOs and FIs investment in SMEs SME investments in project cities and completion lack experience in and access to provided (baseline: 0) reports; and SME financing, finance in project 2b. At least 30 entrepreneurs (30% of annual audits by ESMS cities improved them women) have accessed finance FIs implementation, (baseline: 0) 2c. Technical due diligence, Overall project 2c. At least 20 FI staff (30% of them assistance investment Unchanged women) report increased capacity on progress reports appraisal, and on ESMS implementation (baseline: 0) ADB requirements Overall project 2a–2c. Unchanged Output 3 Current project Current project Delays in Key infrastructure 3a. 18.4 km of roads with associated 3a–3c. Project progress availability of and facilities for utilities constructed (Hegang, 6.3 km; and completion counterpart SMEs in non-coal Jixi, 4.3 km; Qitaihe, 2.1 km; and reports funding and in industrial parks in Shuangyashan, 5.7 km) (baseline: 0) land acquisition project cities 3b. Two WWTPs in non-coal industrial and resettlement constructed parks constructed and operational with activities a combined capacity of 26,000 m3/d Overall Project (Hegang: 6,000 m3/d; Jixi: Uncertainty over Unchanged 20,000 m3/d) (baseline: 0) women’s 3c. At least 56,000 m2 of multifunction participation in SME facilities constructed and SME financing commissionedf (baseline: 0) and capacity development Overall project 3a–3c. Unchanged Output 4 Current project Current project

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Data Sources and Performance Indicators with Targets Reporting Results Chain and Baselines Mechanisms Risks Remediation and 4a. Mining remediation pilots in project 4a. Project progress environmental cities implemented, including and completion cleanup from mining stabilization, soil cleanup, clay lining, reports impacts in project soil cover, and afforestation on cities improved 188.7 ha (Hegang: 52.6 ha; Jixi: 89.7 ha; Qitaihe: 21.7 ha; Overall project Shuangyashan: 24.7 ha) (baseline: 0) Unchanged Overall project 4a. Unchanged Output 5 Current project Current project Integrated urban 5a. Hegang: four rivers with a total length 5a–5j. Project progress infrastructure and of 19.9 km rehabilitated and green and completion services in project flood protection embankment reports cities improved constructed (baseline: 0)e 5b. Hegang: 7.2 km primary and 65.2 km Overall project secondary old district heating pipes Unchanged retrofitted (baseline: 0) 5c. Hegang: 34.3 km road with sidewalks rehabilitated, including 29.1 km of bus priority lanes; and intelligent transport system equipment at 50 improved bus stops and lighting for safety of women installed (baseline: 0) 5d. Jixi: two rivers with a total length of 8.7 km and Hongqi lake (23.5 ha) rehabilitated and green flood protection embankment constructed (baseline: 0)e 5e. Jixi: WTP with capacity of 50,000 m3/d upgraded and 72.5 km water supply pipes retrofitted; 23.3 km of sewers, and 32.5 km of drainage pipes and/or trench constructed (baseline: 0) 5f. Jixi: 2.2 km of roads with associated utilities and a public park (3.2 ha) and 18,000 m2 of multifunction public training facilities constructedf (baseline: 0) 5g. Qitaihe: two WTPs with capacities of 100,000 m3/d and 50,000 m3/d upgraded, 17.8 km old main pipes retrofitted, 73.2 km pipes installed, and 15 pump stations built (baseline: 0) 5h. Qitaihe: 209 electric buses procured; and three bus terminals,f including separate and safe facilities for women, constructed (baseline: 0) 5i. Shuangyashan: 24.7 km of water supply pipes, 3 pump stations, and 3 water tanks constructed and their equipment installed; and 85.1 km of sewers and 52.3 km of drainage pipes installed (baseline: 0) 5j. Shuangyashan: 6.7 km of key road links constructed (baseline: 0)

Overall project

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Data Sources and Performance Indicators with Targets Reporting Results Chain and Baselines Mechanisms Risks 5a–5j. Unchanged

Key Activities with Milestones (overall project) 1. Capacity for BDS and integrated project planning and management developed 1.1 Recruit and mobilize implementation support consultants by Q2 2019 (updated) 1.2 Implement BDS support to SMEs during 2018–2023 (ongoing) 1.3 Implement capacity development training during 2018–2023 (ongoing) 1.4 Implement and monitor EMP, resettlement plan, and SGAP during 2018–2023 (ongoing) 2. Sustainable investment in SMEs and access to finance in project cities improved 2.1 Complete framework agreements and subloan templates by Q2 2019 (updated) 2.2 Identify subprojects and sign subloan agreements for first batch by Q2 2019 (updated, ongoing) 2.3 Identify subprojects in project cities and sign subloan agreements for second batch by Q2 2023 3. Key infrastructure and facilities for SMEs in non-coal industrial parks in project cities constructed 3.1 Design infrastructure, acquire land, and procure works during 2018–2020 (ongoing) 3.2 Implement infrastructure works and equipment installation during 2019–2023 (updated) 4. Remediation and environmental cleanup from mining impacts in project cities improved 4.1 Design, acquire land, and procure works during 2018–2020 (ongoing) 4.2 Implement works during 2019–2023 (updated, ongoing) 5. Integrated urban infrastructure and services in project cities improved 5.1 Design infrastructure, acquire land, and procure works during 2018–2020 (ongoing) 5.2 Implement infrastructure works and equipment installation during 2018–2023 (ongoing)

Inputs ADB Loan Technical Assistance Grant Financial Sector Technical Assistance Development Special Fund Partnership Special (TASF-other sources) Fundg $310.0 million (current) $450,000 (current) $300,000 (current) €133.9 million (additional) $0 (additional) $0 (additional) $460.0 million (equivalent $450,000 (overall) $300,000 (overall) overall)

Government $315.0 million (current) €53.6 million (additional) $375.0 million (equivalent overall)

Assumptions for Partner Financing Current project: EIB: $220 million equivalent (loan) Domestic commercial banks: $106.4 million Subborrowers: $69.6 million Outputs not administered by ADB that are necessary to reach the outcome include selected subcomponents of outputs 3 and 4 (EIB)

Overall project: EIB: $0.0 (changed) Domestic commercial banks: $106.4 million Subborrowers: $69.6 million

ADB = Asian Development Bank, BDS = business development services, EIB = European Investment Bank, EMP = environmental management plan, ESMS = environmental and social management system, FI = financial intermediary, ha = hectare, km = kilometer, m2 = square meter, m3/d = cubic meter per day, PMO = project management office, SGAP = social and gender action plan, SMEs = small and medium-sized enterprises, TVET = technical and vocational education and training, WTP = water treatment plant, WWTP = wastewater treatment plant. a Heilongjiang Provincial Government. 2016. Thirteenth Five-Year Plan. Harbin.

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b Government of the People’s Republic of China, State Council. 2014. National New-Type Urbanization Plan, 2014– 2020. Beijing. c “Person-year job” is defined as 12 months of employment equivalent for one person. d Women-led SMEs are SMEs that are founded by women and/or have female senior executives. e The flood risk management component is included in output 5 and as capacity development in output 1. It includes structural and nonstructural measures, such as hydrological and hydraulic modeling across the river basin, identification of upstream and downstream flood plain preservation options, early warning systems, adjustments to riverside greenway to increase flow and retention capacity, and additional stormwater retention ponds and depressed open space network. Sponge city is a concept in which greenways, parks, and wetlands maximize ecosystem services, including water resource management and stormwater retention, using ecosystems-based adaptation. f Each city will design, build, and operate at least one pilot 2-star green building or above under the People’s Republic of China’s green building standard or green industrial building standard. g Established by ADB. Financing Partner: the Government of Luxembourg. Source: Asian Development Bank.

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B. Monitoring

1. Project Performance Monitoring

187. The project performance management system (PPMS) indicators, their relevance, and monitoring practicalities will be discussed with the executing agency, implementing agencies and project beneficiaries during project implementation. Disaggregated baseline data for output and outcome indicators gathered during project processing will be updated and reported quarterly through the semiannual progress reports of the project management office and after each ADB review mission. These semiannual reports will provide information necessary to update ADB's project performance reporting system. 29 At the start of project implementation, the PMOs and implementing agencies, with the project implementation consulting services, will develop integrated PPMS procedures to generate data systematically on the inputs and outputs of the components, as well as the indicators to be used to measure the project’s impact and outcome considering the components’ scope. The PMOs will be responsible for monitoring and reporting on project performance. The basis for performance monitoring will be the design and monitoring framework (DMF), which identifies performance targets for the impact, outcomes, and outputs of the project. By collecting data from the sources identified in the DMF, the PMOs will be able to report on an annual basis the performance of the project. Specific reporting requirements will be set out in the agreement between ADB and the Government. The PMOs will collect the data, calculate the indicators, analyze the results, and prepare a brief report describing the extent to which the project is generating the intended outputs and outcomes, as well as the overall impact on HPG. The relevance and practicability of data collection for indicators was confirmed with the PMO and the implementing agencies. Meanwhile, the agreed socioeconomic and environmental indicators to be used will be further enhanced to measure project impacts. The PMOs and the implementing agencies agreed and confirmed that they will (i) refine and integrate the PPMS framework at the start of project implementation; (ii) confirm that targets are achievable; (iii) develop recording, monitoring, and reporting arrangements; and (iv) establish systems and procedures no later than 6 months after project inception.

2. Compliance Monitoring

188. The HPG, implementing agencies, and the project management consultants will conduct compliance monitoring, and submit reports and information to ADB concerning the use of the loan proceeds, project implementation, implementing agencies’ project implementation performance, and compliance with loan and project covenants. These reports will include (i) quarterly progress reports on project implementation; and (ii) a project completion report, which should be submitted not later than 3 months after the completion of the project facilities. The compliance status of loan and project covenants will be reported and assessed through quarterly progress reports. ADB review missions will verify status.

3. Safeguards Monitoring

(a) Environment

189. Three types of environment safeguard monitoring will be conducted under the EMP: compliance monitoring, internal monitoring, and external monitoring. The environmental monitoring program, including roles, responsibilities, monitoring frequency and variables, is

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

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described in Section E of the EMP. ADB and the PMOs will monitor the status of EMP implementation through: (i) PMO quarterly project progress reports and semiannual environmental progress reports to ADB, (ii) reports by the loan implementation environment consultant (LIEC) to PMOs and ADB, and (iii) review missions. EMP implementation will be coordinated by the PMOs’ environment officer, supported by the PMOs, project municipal and county EPBs, but not limited to LIEC, to ensure overall compliance of all relevant agencies with the EMP.

190. Compliance monitoring documents and procedural compliance of the project with the EMP, including all required tasks of mitigation, monitoring, and reporting will be conducted by the LIEC.

191. Internal monitoring. The management of construction activities and quantitative measurement of selected environmental variables will be conducted by the implementing agencies and construction contractors. During construction, monitoring will include air quality and noise at construction sites and the discharge water quality, odor and treated sediment quality at dredge spoil treatment sites. During operations, internal monitoring will include the quality of treated wastewater and sludge from the WWTPs and the progress of embankment and wetland landscaping.

192. External monitoring. The quantitative measurement of selected environmental variables at and near construction sites is to ensure compliance with regulatory standards. External monitoring covers many of the same parameters as internal monitoring, to verify results by the implementing agencies and contractors. External monitoring will monitor for dust, noise, odor, dredge spoil, and surface water quality and flow, aquatic invertebrates, and surface water quality and flow (the latter in the operational phase), etc.

193. Project readiness inspection. Before construction, the LIEC will assess the readiness of the PMO and implementing agencies for environmental management, based on a set of indicators (Table A1.3 in the EMP) and report to ADB and PMOs. This assessment will demonstrate that environmental commitments are being met and environmental management systems are in place before construction starts, and/or suggest corrective actions to ensure that all requirements are met.

194. Environmental acceptance reporting. Following the PRC Regulation on Project Completion Environmental Audit (MEP, 2001), within 3 months after the completion of major components, an environmental acceptance report for each component will be prepared by a licensed environmental monitoring institute. The report will be reviewed and approved by the PMOs and reported to ADB. The environmental acceptance reports of the completed components will indicate the timing, extent, effectiveness of completed mitigation and of maintenance, and the needs for additional mitigation measures and monitoring during operations.

(b) Resettlement

195. Internal and external monitoring of resettlement plan implementation will be conducted. Monitoring methodologies are specified in the resettlement plan. The PMOs will carry out internal supervision and monitoring to ensure compliance with the provisions of the resettlement plan and submit internal resettlement monitoring reports semiannually during project implementation, to be submitted together with the regular project monitoring report. An external monitoring agency acceptable to ADB will be engaged by the PMOs prior to commencement of resettlement plan implementation and land acquisition. The external monitoring agency will prepare a pre-

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resettlement plan implementation baseline study, and implement external monitoring and evaluation of resettlement plan implementation. Semiannual external monitoring reports and post- evaluation reports will be prepared and submitted simultaneously to the PMO during resettlement implementation, and within 2 years after conclusion of resettlement plan implementation.

4. Social and Gender Action Plans

196. Monitoring indicators for the social and gender action plan (SGAP) have been incorporated into the PPMS. Clear targets and indicators have been established and some indicators, such as those on employment, are also captured in the DMF. The regular project progress reports to ADB will include, at least semiannually, reporting on those indicators. Assistance will be provided for the PMOs and implementing agencies by the social development and gender consultant who will help to set up effective monitoring systems and work with the focal points in the PMOs and implementing agencies to ensure implementation of the SGAP. The SGAP will be monitored semiannually and reported via the quarterly project progress reports and during ADB review missions. The external monitoring agency will also monitor the implementation progress of SGAP and report through the semiannual external monitoring reports.

C. Evaluation

197. ADB, HPG, and the implementing agencies will undertake a semiannual review mission to evaluate the progress of project implementation. ADB, HPG, and implementing agencies will undertake a comprehensive midterm review two years after the start of project implementation to have a detailed evaluation of the scope, implementation arrangements, resettlement, achievement of scheduled targets, and progress on the agenda for policy reform and capacity building measures. Feedback from the PPMS activities will be analyzed. Within 3 months of physical completion of the project, the PMOs will submit a project completion report to ADB.30

D. Reporting

198. The executing agency will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions, (c) updated procurement plan, and (d) updated implementation plan for the next 12 months; and (iii) a project completion report within 6 months of physical completion of the project.

E. Stakeholder Communication Strategy

199. Project information will be communicated through public consultation, information disclosure mechanism in ADB’s and government’s website, meetings, interviews, FGDs, and community consultation meetings, in accordance with ADB’s requirements of information disclosure policy. Main stakeholders are the different government agencies, beneficiaries, displaced persons, and participants in the project implementation. Stakeholder communication is part of the Social Development Action Plan and the Gender Action Plan, and will be monitored accordingly.

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

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200. Environment. Meaningful consultation, participation and information disclosure was conducted during project preparation. Information disclosure and public consultation included newspaper disclosure; informal communication with key stakeholders, including residents, local authorities and sector specific institutions and authorities; questionnaire surveys; and wider stakeholder meetings attended by affected people and other concerned stakeholders. A GRM has been defined to prevent and address community concerns, reduce risks, and assist the project in maximizing environmental and social benefits.

201. Involuntary resettlement. Consultation meetings have been carried out with the affected households during resettlement planning and will continue during resettlement plan updating and implementation. Copies of the resettlement booklets were placed in village offices. The PMOs will continue to facilitate the conduct of consultation meetings and disclosure. The four resettlement plans have been uploaded on the ADB website.

202. Public disclosure. Public disclosure of all project documents will be undertaken through the Implementing Agency and on the ADB website including the project data sheet, DMF, EIA report, resettlement plans, and the report and recommendation of the President. Disclosure of social and environmental monitoring reports will be undertaken during project implementation.

203. Social and gender action plan. Consultations with communities have taken place and will continue at different points in the preparation and implementation of the GAP and social development action plan within the components, and will be designed not only to inform people about the component or specific activities related to its preparation and implementation, but also to enable people in the community to ask questions, make suggestions, state preferences, and express concerns. Special attention will be paid to the participation of women and any other vulnerable groups, such as the poor.

204. Public awareness and education program on environmental and river protection, flood risk management and public health, road traffic safety for nearby communities and schools will be conducted as part of the project components and actions to enhance the involvement of women is included in the SGAP. Public hearings will be held for any proposed adjustments in water supply and sanitation and heating tariffs with adequate representation of poor, women, and other vulnerable groups.

X. ANTICORRUPTION POLICY

205. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project. 31 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all project contractors, suppliers, consultants, and other service providers. Individuals and/or entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the project.32

206. To support these efforts, relevant provisions are included in the loan and project agreements and the bidding documents for the project.

31 ADB. 2010. Anticorruption and Integrity: Policies and Strategies. https://www.adb.org/documents/anticorruption-and- integrity-policies-and-strategies 32 ADB Anticorruption and Integrity Website. https://www.adb.org/site/integrity/main

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XI. ACCOUNTABILITY MECHANISM

207. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make an effort in good faith to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.33

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL

208. All revisions and/or updates during implementation should be retained in this section to provide a chronological history of changes to implemented arrangements recorded in this project administration manual.

No Date Change Officer 1 9 August 2019 Incorporated additional financing; updated cost tables, implementation Stefan schedule, allocation tables, and procurement plan; attached updated Rau environmental management plan; and agreed with the government during the loan negotiations for the additional financing held on 9 August 2019.

33 ADB Accountability Mechanism Website. https://www.adb.org/site/accountability-mechanism/main

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People’s Republic of China: Heilongjiang Green Urban and Economic Revitalization Project

ENVIRONMENTAL MANAGEMENT PLAN

Prepared by the Heilongjiang Provincial Government for the Asian Development Bank

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1. Introduction

1. This Environmental Management Plan (EMP) is developed for the Heilongjiang Coal-Rich Cities Redevelopment Project (the project) and defines all potential impacts of the project components and the mitigation measures and monitoring with the objective of avoiding or reducing these impacts to acceptable levels. The EMP also defines the institutional arrangements and mechanisms, the roles and responsibilities of different institutions, information disclosure and public consultation including Grievance Redress Mechanism (GRM), procedures and budgets for implementation of the EMP. The EMP seeks to ensure continuously improving environmental protection activities during preconstruction, construction, and operation in order to prevent, reduce, or mitigate adverse impacts and risks. The EMP draws on the findings of the project environmental impact assessment (EIA), the domestic environmental impact statements (EIS) and environmental impact tables (EIT), technical studies and analyses by the project preparation technical assistance (PPTA) consultants, and ADB review mission discussions and agreements with the relevant government agencies.

2. The EMP will be reviewed and updated, as needed, at the end of the detailed design in order to be consistent with the final technical design. The final EMP, if updated, will be disclosed on the ADB project website and included in the Project Administration Manual (PAM). The EMP provides a list of environmental contract clauses that shall be included in all bidding and contract documents. The contractors will be made aware of their obligations to implement the EMP and to budget EMP implementation and monitoring costs in their proposals.

2. Institutional Responsibilities related to EMP implementation

3. As Executing Agency (EA), the Heilongjiang Provincial Government (HPG) will be responsible for the overall implementation and compliance with loan assurances and all requirements specified in the EMP.

4. HPG has designated Heilongjiang Development and Reform Commission (HDRC) and Heilongjiang Finance Department to guide and supervise the project preparation and implementation.

5. Four project cities (Hegang, Jixi, Qitaihe, and Shuangyashan) have established a Project Leading Group (PLG) respectively comprising of senior officials from relevant government agencies at municipal levels, to facilitate inter-agency coordination, and to resolve any institutional problems affecting project implementation at municipal, and district levels.

6. A Project Management Office (PMO) sits in the municipal DRC of each project city, will have the overall responsibility delegated by the city government for supervising the implementation of the EMP, coordinating the environment grievance redress mechanism (GRM) and reporting to ADB. The PMO will assign one of its full staff as EMP coordinator to take charge of (i) ensuring that environmental management, monitoring, and mitigation measures are incorporated into bidding documents, construction contracts and operation management plans; (ii) coordinating the project level grievance redress mechanism (GRM); and (iii) coordinating implementation of the training and consultation plans defined in the EMP.

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7. The local -level Project Implementation Units (PIUs), under the city governments, are shown in Table EMP-1. Each PIU will assign one staff to coordinate EMP implementation at local level, which will take charge of (i) coordinating the implementation of the EMP; (ii) supervising the implementation of mitigation measures during project construction and operation (the PIU will hire construction supervision companies (CSCs)); (iii) act as local entry points to the GRM); (iv) report to PMO on EMP implementation progress; and (v) responding to any unforeseen adverse impact beyond those mentioned in the domestic EISs and EITs, the project EIA and the EMP.

Table EMP-1: Details of PIUs and O&M Units Output Subcomponents PIUs O&M Unit Hegang HG 3.1 Green Food, Green Energy Hegang Economic Hegang Economic and High-Tech Industrial Development Area Development Area Park - Infrastructure and Construction Limited transfer O&M to different Business Support Facilities Company agencies:

Water Supply: Hegang Sanli Water Affairs Limited Company; Road cleaning: different district governments based on the location; Road maintenance: Administrative Enforcement Bureau Heating pipelines: Hegang City Heating Company. HG 3.2 Luobei County High-tech Liyun Investment & To be decided and may Graphite Based Materials Development Ltd. Co. outsource the operation and E-Mobility Industrial Park /Luobei County PMO – Infrastructure (WWTP) and Business Support Facilities HG 4.1 Remediation of Open Pit Hegang Natural Will be decided when the Mine / Wasterock Dumpsite Resources Bureau function of the land is Rehabilitation confirmed. HG 5.1 Integrated River Hegang Water Affairs Hegang River Course and Rehabilitation and Cleanup Bureau Small Reservoir from Mining and Ecosystems Management Department Based Adaption (Shitou River, Qianjin Creek, Heli River, Xiaoheli River) HG 5.2 District Heating System Hegang City Hegang City Management Energy Efficiency Management & & Administrative Improvements Administrative Enforcement Bureau Enforcement Bureau HG 5.3 Road rehabilitation, public Hegang City Road: Hegang City Public and non-motorized transport Management & Transport Bureau improvements Administrative Enforcement Bureau Heating: Huisheng Water Supply and Heat Supply Ltd. Company;

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Output Subcomponents PIUs O&M Unit Drain pipes: Hegang Water Supply and Wastewater Management Department Jixi JX 3.1 Hengshan District High-Tech Hengshan District Administrative Office of Graphite Based Materials PMO Hengshan District and E-Mobility Industrial Park Graphite Park - Infrastructure and Business Support Facilities JX 3.2 Jixi City Wastewater Administrative Administrative Committee treatment and discharge Committee of Jiguan of Jiguan Non-public infrastructure in the industrial Non-public Scientific Scientific and park of Jiguan District and Technological Technological Enterprises Enterprises Demonstration Park Demonstration Park JX 4.1 Hengshan District Wasterock Hengshan District Hengshan District Urban Dumpsite Remediation / Safe PMO & Rural Construction Closure and Management of Bureau Former Mines JX 5.1 Hengshan District Integrated Hengshan District Jixi Water Affairs Bureau Lake and Rivers PMO Rehabilitation and Ecosystems Based Adaptation (Hongqi Lake, Anle Gou Creek and Huangni Rivers) JX 5.2 Hengshan District Urban Hengshan District Maintenance of the Regeneration, Community PMO property will be Facilities and Public Space outsourced by Hengshan Improvement (including District Government. plaza, facilities, residential Hengshan Education environment upgrading) Bureau, Hengshan Civil Affairs Bureau, Hengshan Safety and Mine Bureau will be responsible for proper use of the facilities. JX 5.3 Hengshan District Beishan Hengshan District Hengshan District Urban Road, Jiaotong Street and PMO and Rural Construction bypass bridge Bureau JX 5.4 Urban Regeneration and Jixi Lutong Municipal Jixi Municipal Urban Infrastructure (water Engineering Ltd. Co. Infrastructure supply pipes, wastewater Management Division collection and rain water drainage) JX 5.5 Jixi City Water No.3 Jixi Water Supply Jixi Water Supply treatment plant upgrading Company Company and expanding Qitaihe QH 3.1 Green Food and Qitaihe Economic Qitaihe Economic Pharmaceutical Development Area Development Area Biofermentation Industrial Administrative Administrative Committee Park Infrastructure and Committee Business Support Facilities

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Output Subcomponents PIUs O&M Unit QH 3.1 Mining Remediation and Qitaihe Natural Transfer to Taoshan Environmental Rehabilitation Resources Bureau District Government QH 5.1 Water Treatment Plant Qitaihe Water Affairs & Qitaihe Water Affairs & Upgrading and Water Supply Water Supply Water Supply Company Distribution System Company (four departments) Replacement and Expansion QH 5.2 Sustainable and Clean Fuel Qitaihe Public Qitaihe Public Public Transport Transportation Transportation Company Improvements Company Shuangyashan SY 3.1 Industrial parks-Infrastructure Shuangyashan Shuangyashan Economic and Business Support Economic Development District Facilities Development District Administrative Committee Administrative Committee Jixian County Road Management Station (for Jixian County road section in Jixian Transportation Bureau County (for road section in Jixian County SY 4.1 Wasterock Dumpsite Lingdong District PMO Lingdong District Remediation/ Safe Closure Government and Management of Former Mines SY 5.1 Urban Regeneration and WS: Shuangyashan WS: Shuangyashan Water Urban Infrastructure (Water Water Supply Supply Company Supply, wastewater collection Company and rain water drainage) WW & Drainage: WW & Drainage: Shuangyashan Municipal Shuangyashan Facility Maintenance Municipal Facility Center Maintenance Center SY 5.2 South Ring Road and Tunnel South Ring Road: South Ring Road: Shuangyashan Shuangyashan Transport Transport Bureau Bureau

Tunnel and Fly over: Tunnel and Fly over: Shuangyashan City Shuangyashan Municipal Construction Project Facility Maintenance Management Office Center

8. Their capacity of PMOs of PIUs to implement the EMP, as well as the capacity of the O&M units to manage project facilities, will be strengthened through capacity building and training activities defined in the EMP. These will be supported by the loan implementation environmental consultant (LIEC).

9. Loan Implementation Environmental Consultant. Under the loan implementation project management consultancy services, a national environmental specialist (30 man-months) will be engaged under the project management and capacity building component. The LIEC will advise the PMOs, PIUs, CSCs and contractors on all aspects of environment and monitoring for the project. The LIEC will:

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(i) assess the project components’ environmental readiness prior to implementation based on the readiness indicators defined in Table EMP- 5; (ii) assist PMO and PIUs to update the EMP and environmental monitoring program; (iii) review the site-specific EMPs prepared by contractors; (iv) assist the PMOs and PIUs to establish a Grievance Redress Mechanism (GRM), and provide training for all GRM access points; (v) Conduct regular EMP compliance assessments, undertake site visits as required (together with PMO-ES), identify any environment-related implementation issues, propose necessary corrective actions, reflect these in a corrective action plan; (vi) Assist in preparation of environmental part of regular project progress reports; and help improve O&M plan if necessary; (vii) provide training to PMOs, PIUs and contractors on environmental laws, regulations and policies, SPS 2009, EMP implementation, and GRM in accordance with the training plan defined in the EMP (Table EMP-6); (viii) assist the PMOs and PIUs in conducting consultation meetings with relevant stakeholders as required, informing them of imminent construction works, updating them on the latest project development activities, GRM; (ix) assist the FIs establishment of ESMS and provide ESMS trainings; (x) assist the FIs preparation of annual ESMS implementation report.

10. Environmental monitors (package CS-4). An external environment monitor (EEM) will be contracted by the LPMOs/IAs through CQS to oversee EMP implementation and monitoring.. The terms of references of external environment monitoring consultant (EEM) are attached as Appendix 1 of the EMP.

(i) Contract a certificated environmental monitoring station or company (EMS) to conduct physical indicator monitoring as defined in the monitoring plan of Table EMP-7; (ii) Conduct independent verification of EMP implementation status and environmental to verify that issues reported in the internal environmental monitoring report and semiannual environmental progress report in compliance with ADB’s safeguard policy statement (2009) and PRC regulations; (iii) Make recommendations to resolve any issues or problems on implementing the EMP and provide advice to city PMOs and PIUs; (iv) Compare the predicted with actual environmental impacts, assess the effectiveness of mitigation measures, and suggest enhancement measures, as required; and (v) Submit external environmental monitoring verification report to ADB and HLG with quality acceptable to ADB on semiannual basis during project implementation period in both Chinese and English.

11. Construction Contractors. Construction contractors will be responsible for implementing relevant mitigation measures during construction under the supervision of the CSCs and PIUs. Contractors will develop site-specific EMPs based on the project EMP and will assign a person responsible for environment, construction site health and safety. After project completion, environmental management responsibilities will be handed over to the operators of the facilities.

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12. Construction Supervision Companies (CSCs) will be selected through the PRC bidding procedure by the PIUs. The CSCs will be responsible for reviewing the site- specific EMPs prepared by contractors; supervising construction progress and quality, and EMP implementation on construction sites. Each CSC shall have at least one environmental engineer on each construction site to: (i) conduct regular site inspection; (ii) supervise the contractor’s EMP implementation performance; and (iii) prepare the contractor’s environmental management performance section in monthly project progress reports submitted to the PIUs.

13. O&M Units. During the operation phase, the local EPB will periodically verify and monitor the environmental management and implementation of mitigation measures by the operators (O&M Units) of the project components. These O&M units are listed in the Table EMP-1. The cost of mitigation measures in this phase will be borne by the relevant O&M Units.

3. Summary of Potential Impacts and Mitigation Measures

14. Potential environmental issues and impacts during the pre-construction, construction and operation phases, as identified in the EIA as well as corresponding mitigation measures designed to minimize the impacts are summarized in Table EMP-2 to 3.

15. Mitigation or safeguard includes two types of environmental measures. Those that will permanently become part of the infrastructure such as noise reduction materials and odor removal facilities for the wastewater treatment plants. These will need to be included in the design of the facility by the LDIs, otherwise they won’t be built. The costs of building and maintaining these systems have already been included in the infrastructure construction and operating costs and therefore will not be double-counted as part of the EMP costs.

16. Those that are temporary measures particularly during the construction stage, such as dust suppression by watering and wheel washing, the use of quiet/low noise powered mechanical equipment and temporary noise barriers, flocculants used to facilitate sedimentation of suspended solids in construction site runoff, etc. These will need to be included in the tender documents, otherwise they not budgeted by the contractor and they won’t be done. The costs for implementing these measures are included in the EMP. These budgets for implementing these measures in this project add up to the amount of $ 3.41 million for Hegang, $2.29 million for Jixi, $3.11 million for Qitaihe and $3.03 million for Shuangyashan respectively for the construction stage and $0.39 million for Hegang, $0.26 million for Jixi, $0.35 million for Qitaihe and $0.34 million for Shuangyashan respectively for the operation stage. The budget for construction stage represents the estimated amount above the business as usual scenario, which the contractors would put into their bid packages to satisfy the environmental contract clauses for implementing the mitigation measures in the EMP. This amount therefore will already be included in the construction contracts. The amount of operation stage would come out of the budgets of the O&M Units.

17. The mitigation measures defined in the EMP will be (i) checked and where necessary re-designed by the LDIs; (ii) incorporated into tender documents (where

Annex 115 appropriate), construction contracts and operational management plans; and (iii) implemented by contractors, PIUs or PMO, as relevant. The effectiveness of these measures will be evaluated based on site supervisions by the CSCs, and through EMP compliance verification conducted by the PMO, PIUs, EEM and LIEC.

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Table EMP-2: Summary of Potential Impacts and Mitigation Measures during Design and Pre-construction Stage Item Potential Impact Mitigation Measures Implementing Super Source of and/or Issues Entity vising funds Entity Detailed Design Stage Design of roads Safety of -Design must ensure public health and safety with LDI PMO, Included in (Component 3.1 and pedestrians and clearly marked and separate lanes for pedestrians LIC design 5) cyclists and cyclist, and ensure barrier-free design for contracts disabled people. Noise disturbance -Ensure the noise reducing pavement will be LDI PMO, Included in employed for the section of Yunfeng tunnel (CK0- LIC design 150~CK0+130, and YCK0-110~YCK0+150) with contracts total length of 540 mand South Ring road (the sections of K0+000~K0+255, K0+826~K1+522, and K3+121~K3+164) near residential buildings; For Xinxing Avenue Flyover, ensure the noise reducing pavement will be employed for the section of K0+010 to K0+150, k0+440 to K0+880, and ZK0+150 to ZK0+573.310 with total length of 1003.31 m; Ensure the noise insulation window will be employed for the roadside building of Heilongjiang Coal Vocational and Technical College with total window area of 292 m2; Ensure the sound barrier will be installed on both side of the green belt near Zhongxinzhan community (section K0+150 to K0+300) and Fuan Village section (K0+880 to K1+330) with total length of 2* 600 m; Reserve space for installation of sound barrier at main flyover and the ramp for long term. -Ensure the sound barrier will be employed for the residents of Baoquanwei (both north sides and south sides of K0+020~K0+220) affected by Gongqu Bridge.

Extreme weather -Consider potential impacts from extreme weather LDI PMO, event due to events due to climate change in designing road LIC climate change surface and drainage system

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Design of river Embankment -Technical design of embankment shall be LDI PMO, Included in rehabilitation and adequate and stable enough to withstand the strong LIC design flood risk force of heavy storm water flow but at the same time contracts management maximize the adoption of eco-friendly embankment (Component HG 5.1 designs. and JX 5.1) Disposal of -Determine the temporarily storage site with design LDI PMO, Included in dredged sediment of drainage system and preliminary treatment LIC design system for the wastewater. contracts Extreme storm Technical design of the food control function of the LDI PMO, Included in events river channels shall take into consideration extreme LIC design storm events due to climate change. contracts Impacts on -Additional assessments on possible flood impacts LDI PMO, Included in downstream and consultations with downstream communities LIC design will be conducted. If necessary, appropriate non- contracts structural measures to mitigate flood risks will be introduced, implemented and supported by the concerned capacity development component of output 5, such as early warning systems and disaster management response mechanisms as required.

Design of utilities Pipe burst Technical design and construction method of the LDI PMO, Included in pipeline utilities pipelines must be adequate to prevent pipe LIC design (Component 3 and 5) burst. contracts

Design of Odor removal Technical design of the WWTPs shall include facility LDI PMO, Included in wastewater and equipment to remove odor generated during LIC design treatment plant (HG plant operation. contracts 3.2 and JX 3.2) Buffer distance Technical design of the Jiguan WWTP shall include LDI PMO, Included in an environmental buffer distance of 100 m to the LIC design nearest environmental protection target for the contracts potential negative environmental impact. Operational noise Technical design of the WWTPs shall (1) contain the LDI PMO, Included in operational noise from pumps, blowers and other LIC design noisy equipment with proper acoustic design of contracts these facilities.

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Water quality- Technical design of the WWTPs shall achieve the LDI PMO, Included in effluent standard desired treatment to meet Class 1A discharge LIC design standard and safety of plant operation, with dual contracts power supply to avoid interruption to plant operation due to power failure. Sludge disposal Technical design of the WWTPs shall include LDI PMO, Included in temporary sludge drying beds to produce sludge LIC design with water content of lower than 60%. contracts Design of water Inadequate -Technical design of the WTPs must achieve the LDI PMO, Included in treatment plant treatment desired PRC supply standards with dual power LIC design upgrading (JX 5.5 supply to avoid interruption to plant operation due to contracts and QH 5.2) power failure. Noise from WTPs -Technical design of the WTPs must be able to LDI PMO, Included in contain the operational noises from pumps and LIC design other noisy equipment with proper acoustic design contracts of these facilities. WTP sludge -Ensure proper sludge processing facilities to meet LDI PMO, Included in disposal PRC sludge quality and moisture level standards; LIC design -Ensure the Qitaihe Taoshan sanitary landfill and contracts Jixi Baochuan sanitary landfill is ready to receive WTP sludge. Design of waste rock Pollution from -Conduct waste rock composition test and analysis LDI PMO, Included in dump site leachate before detailed design. If any indicators exceed the LIC design rehabilitation thresholds defined in the Hazardous Waste contracts (Component 4)a Identification Standard (GB 5085.1-2007), the waste rock is defined as Category II industrial waste, if not, it is defined as Category I industrial waste. The technical design shall comply with the Standard for pollution control of general industrial solid waste storage and disposal sites (GB 18599-2001) for category I or category II industrial waste depending on the composition analysis results; -Conduct soil quality test at the proposed site to check the pollution conditions. -Conduct groundwater quality monitoring three times at least, covering wet season, dry season and normal season. The pollution status of groundwater

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will be further assessed. Measures to prevent potential contamination and harm to people and water users will be designed and implemented. Policy dialogue with the government and responsible stakeholders will be carried out during project implementation to promote restoration of groundwater quality to acceptable levels if exceedance of groundwater quality standard is detected. -Drainage system shall be designed to divert the surface runoff timely in order to avoid generation of leachate and landslide. Underground fire -The sulfur content of waste rock will be tested. If the LDI PMO, Included in sulfur content is greater than 1.5%, measures to LIC design prevent spontaneous combustion shall be designed contracts in line with the Standard for Pollution Control on Storage and Disposal Site for General Industrial Solid Waste (GB 18599-2001). Safety - Conduct detailed geological survey and ensure LDI PMO, Included in design the profile of the site (e.g. height and slope LIC design angles) to ensure that the final structure is safe and contracts stable against flood, erosion and subsidence

Pre-construction stage Institutional Lack of -PMO to appoint qualified environmental specialist PMO ADB Included in strengthening environment on its staff (PMO-ES); loan management -PMO to contract loan implementation consultant implementation capacities within (LIC); consulting PMO -LIEC to conduct environment management training services and IA operation budget Lack of -Each PIU to appoint qualified environment PMO ADB Included in environment specialist on its staff; loan management -LIEC to conduct environment management implementation capacity within the training. consulting PIUs services and IA

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operation budget External -PMO to contract EEM to conduct independent PMO ADB Included in environment verification of the project’s environment loan monitor (EEM) performance and compliance with the approved implementation EMP. consulting services and IA operation budget Lack of -LIC to conduct environment management training PMO, O&M units, ADB Included in environment LIC loan management implementation capacities within consulting the O&M units services and IA operation budget EMP update EMP shall reflect -Review mitigation measures defined in this EMP, PMO, assisted by ADB Included in final technical update as required to reflect the final detailed LIEC loan design design, disclose updated EMP on project website, implementation and include updated EMP in the bid documents consulting services Grievance redress Lack of capacities -establish a GRM with complaint hotline, appoint a PMO, PIU, LIEC EEM, Included in mechanisms of handling and GRM coordinator within PMO; ADB loan resolving -brief and provide training to GRM access points; implementation complaints -disclose GRM to affected people before consulting construction begins at the main entrance to each services and IA construction site; operation -maintain and update a Complaint Register to budget document all complaints. Tender documents Environmental -put into tender documents and works contracts the PIU, tender PMO, Included in and works contracts clauses for all respective environmental clauses in this EMP agent, LIEC EEM tendering tender agent’s contract Construction traffic Construction Plan transport routes for construction vehicles and PIU, LIEC, tender PMO, Included in vehicles causing specify in tender documents to forbid vehicles from agent, local traffic EEM tendering traffic congestion using other roads and during peak traffic hours management agent’s authority contract

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Table EMP-3: Summary of Potential Impacts and Mitigation Measures during Construction Stage Item Potential Impact Mitigation Measures Implementing Supervising Source of and/or Issues Entity Entity funds General Mitigation Measures Applicable to All Components Impacts on air Dust (TSP, PM10) -provide dust masks to construction workers,; Contractor CSC, PIU, Included in quality -build access and hauling roads at sufficient PMO, LIEC, construction distance from residential areas, particular, from EEM contract local schools and hospitals; -assign haulage routes and schedules to avoid transport occurring in the central areas, traffic intensive areas or residential areas; -Spray water regularly on unpaved haul roads and access roads (at least once a day) to suppress dust; and erect hoarding around dusty activities; -cover material stockpiles with dust shrouds or tarpaulin. For the earthwork management for backfill, measures will include surface press and periodical spraying and covering. The extra earth or dredged materials should be cleared from the project site in time to avoid long term stockpiling; -minimize the storage time of construction and demolition wastes on site by regularly removing them off site; -Install wheel washing equipment or conduct wheel washing manually at each exit of the works area to prevent trucks from carrying muddy or dusty substance onto public roads; -Keep construction vehicles and machinery in good working order, regularly service and turn off engines when not in use; -Vehicles with an open load-carrying case, which transport potentially dust-producing materials, shall have proper fitting sides and tail boards. Dust-prone materials shall not be loaded to a level higher than the side and tail

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boards, and shall always be covered with s strong tarpaulin; -In periods of high wind, dust generating operations shall not be permitted within 200 m of residential areas. Special precautions need to be applied in the vicinity of sensitive receptors, such as schools, kindergartens and hospitals; -Site all dredged sediment temporary storage or disposal facilities at least 50 m from the nearest air quality protection target. -To avoid odor impacts caused by sediment dredging, transport dredged sediment in closed tank wagons to contain odor and prevent scattering along the way; -Unauthorized burning of construction and demolition waste materials and refuse shall be subject to penalties for the Contractor, and withholding of payment. Noise Noise from PME and -Noise levels from equipment and machinery Contractor CSC, PIU, Included in vehicles shall conform to the PRC standard for Noise PMO, LIEC, construction Limits for Construction Sites (GB 12523-2011) EEM contract and the WBG EHS standards, and properly maintain machinery to minimize noise; -Equipment with high noise and high vibration shall not be used near village or urban areas and only low noise machinery or the equipment with sound insulation is employed; -sites for concrete-mixing plants and similar activities will be located at 300 m away from the nearest noise protection target; -Temporary noise barriers or hoardings shall be installed around the equipment to shield residence when there are residence within 20 m of the noise source; -No construction shall be allowed between the night time hours of 22:00-06:00; -Regularly monitor noise levels at construction boundaries.

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If noise standards are exceeded by more than 3 Db, equipment and construction conditions shall be checked, and mitigation measures shall be implemented to rectify the situation. -Provide the construction workers with suitable hearing protection (ear muffs) according to the worker health protection law of the PRC; -Control the speed of bulldozer, excavator, crusher and other transport vehicles travelling on site, adopt noise reduction measures on equipment, step up equipment repair and maintenance to keep them in good working condition; Limit the speed of vehicles travelling on site (less than 8 km/h); -Maintain continual communication with the villages and communities near the construction sites. -Construction noise will be examined by EEM against PRC regulation and World Bank Group EHS guidelines, if non-compliance is detected, further noise mitigation measures will be designed and implemented during construction and operation phases, including as necessary i.e. improved windows, and noise barriers.

Vibration Excessive vibration, -Operation between 06:00-20:00 only and reach Contractor CSC, PIU, Included in especially at night an agreement with nearby residents regarding PMO, LIEC, construction the timing of heavy machinery work, to avoid EEM contract excessive vibration impacts. Surface water Uncontrolled -Portable toilets and small package wastewater Contractor CSC, PIU, Included in wastewater and treatment facilities shall be provided on PMO, LIEC, construction muddy runoff from construction sites and construction camps for EEM contract construction sites the workers and canteens; if there are nearby and work camps. public sewers, interim storage tanks and pipelines will be installed to convey wastewater to those sewers;

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-Construction machinery shall be repaired and washed at special repairing shops. No onsite machine repair and washing shall be allowed; -Storage facilities for fuels, oils, and other hazardous materials will be within secured areas on impermeable surface, and provided with bunds and cleanup kits. -The contractors’ fuel suppliers must be properly licensed, follow proper protocol for transferring fuel, and must be in compliance with Transportation, Loading and Unloading of Dangerous or Harmful Goods (JT 3145-88); -Material stockpiles will be protected against wind and runoff waters which might transport them to surface waters; -Spills shall be cleaned up according to PRC norms and codes within 24 hours of the occurrence, with contaminated soils and water treated. Records must be handed over without delay to the PMO and project city EPB. Solid waste, C&D waste, -Establish enclosed waste collection points on Contractor CSC, PIU, Included in earthwork, soil municipal solid site, with separation of domestic waste and PMO, LIEC, construction erosion protection waste, soil erosion, construction & demolition (C&D) waste; EEM contract inadequate spoil -Set up centralized domestic waste collection storage, disposal and point and transport offsite for disposal regularly borrow site operation by sanitation department; -Maximize the reuse of earth cut materials and C&D waste for filling and foundations of other construction works specified by municipal and planning departments, or transport in enclosed containers to designated C&D landfill site; -Confirm location of the borrow pit and temporary spoil storage and final disposal sites; -Develop borrow pit and spoil disposal site management and restoration plan, to be approved by responsible authority; obtain

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permit for the clearance of excavated earthworks; -Construction intercepting ditches and drains to prevent runoff entering construction sites, and diverting runoff from sites to existing drainage; -Construction hoarding and sedimentation ponds to contain soil loss and runoff from the construction sites; -Limit construction and material handing during periods of rains and high winds; -Stabilize all cut slopes, embankments, and other erosion-prone working areas while works are going on; -Stockpiles shall be sort-termed, placed in sheltered and guarded areas near the actual construction sites, covered with clean tarpaulins, and sprayed with water during dry and windy weather conditions; -All earthwork disturbance areas shall be stabilized with thatch cover within 30 days after earthworks have ceased at the sites; -immediately restore, level and plant landscape on temporary occupied land upon completion of construction works; Impact on Loss of habitats and - Siting of temporary works areas and access Contractor CSC, PIU, Included in ecological wildlife routes in low value habitats PMO, LIEC, construction resources - Reinstatement of temporary works areas EEM contract - All revegetation works to use native plant species Occupational Construction site -Each contractor shall provide adequate and Contractor CSC, PIU, Included in health and safety sanitation, pest functional systems for sanitary conditions, toilet PMO, LIEC, construction control facilities, waste management, labor dormitories EEM contract and cooking facilities. -Effectively clean and disinfect the site. During site formation, spray with phenolated water for disinfection. Disinfect toilets and refuse piles and timely remove solid waste.

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-Exterminate rodents on site at least once every 3 months, and exterminate mosquitoes and flies at least twice each year. -Provide public toilets in accordance with the requirements of labor management and sanitation departments in the living areas on construction site, and appoint designated staff responsible for cleaning and disinfection. -Work camp wastewater shall be discharged into the municipal sewer system or treated on- site with portable system. Personal Protective -Provide safety hats and shoes to all Contractor CSC, PIU, Included in Equipment (PPE) construction workers and enforce their use by PMO, LIEC, construction the workers. EEM contract -Provide goggles and respiratory masks to workers doing asphalt road paving and tunnel blasting. -Provide ear plugs to workers working near noisy PME. Food Safety -Inspect and supervise food hygiene in canteen Contractor CSC, PIU, Included in on site regularly. PMO, LIEC, construction -Canteen workers must have valid health EEM contract permits. -If food poisoning is discovered, implement effective control measures immediately to prevent it from spreading. Disease prevention -All contracted labor shall undergo a medical Contractor CSC, PIU, Included in and safety examination which should form the basis of an PMO, LIEC, construction awareness (obligatory) health/accident insurance and EEM contract welfare provisions to be included in the work contracts; -The contractors shall maintain records of health and welfare conditions for each person contractually engaged; -Establish health clinic at location where workers are concentrated, which should be equipped with common medical supplies and

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medication for simple treatment and emergency treatment for accidents; -Specify (by the PIUs and contractors) the person responsible for health and epidemic prevention responsible for the education and propaganda on food hygiene and disease prevention to raise the awareness of workers. Social conflicts -Civil works contracts shall stipulate priorities to Contractor CSC, PIU, Included in (i) employ local people for works, (ii) ensure PMO, LIEC, construction equal opportunities for women and men, (iii) pay EEM contract equal wages for work of equal value, and to pay women’s wages directly to them; and (iv) not employ child or forced labor. Community Temporary traffic -A traffic control and operation plan will be Contractor CSC, PIU, Included in Health and Safety management prepared together with the local traffic PMO, LIEC, construction Physical cultural management authority prior to any construction. EEM contract resources -The plan shall include provisions for diverting or scheduling construction traffic to avoid morning and afternoon peak traffic hours, regulating traffic at road crossings with an emphasis on ensuring public safety through clear signs, controls and planning in advance. Information -Inform residents and businesses in advance Contractor CSC, PIU, Included in disclosure through media of the construction activities, PMO, LIEC, construction given the dates and duration of expected EEM contract disruption. Access to -Place clear signs at construction sites in view Contractor CSC, PIU, Included in construction of the public, warning people of potential PMO, LIEC, construction dangers such as moving vehicles, hazardous EEM contract materials, excavations etc. and raising awareness on safety issues. -All sites will be made secure, discouraging access by members of the public through appropriate fencing whenever appropriate. Utility services -Assess construction locations in advance for Contractor CSC, PIU, Included in interruptions potential disruption to services and identify risks PMO, LIEC, construction before starting construction; EEM contract

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-If temporary disruption is unavoidable, develop a plan to minimize the disruption in collaboration with relevant local authorities such as power company, water supply company and communication company, and communicate the dates and duration in advance to all affected people. Destruction of -Contractor shall comply with PRC's Cultural Contractor CSC, PIU, Included in cultural Relics Protection Law and Cultural Relics PMO, LIEC, construction relics in stream bed Protection Law Implementation Regulations if EEM contract and soil such relics are discovered, stop work immediately and notify the relevant authorities, adopt protection measures and notify the Security Bureau to protect the site. Specific Sector Related Impacts during Construction Stage Waste rock dump Leachate seepage -All remediated sites would be lined with Contractor CSC, PIU, Included in site rehabilitation into groundwater compacted clay and/or geomembrane to PMO, LIEC, construction (Component 4) prevent leachate entering groundwater or EEM contract surface waters. To further reduce permeability, fill would be layered with bands of clay. Fill would be capped with a 300 mm thick sealing layer formed from clay material compacted to greater than 80 % standard proctor density. The sealing layer will be covered with top soil, with a total thickness of 400 mm, to protect the sealing layer and offer sufficient water holding capacity to support the vegetation and reduce direct infiltration.

- Monitoring of both the leachate and groundwater surrounding the sites will be conducted in the wet and dry seasons to ensure the effectiveness of this control measure. Leachate monitoring will be conducted by installing DN100 polyvinyl chloride (PVC) pipes into the site as it is being filled.

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Risk of subsidence -Fill compaction would be undertaken to reduce Contractor CSC, PIU, Included in void ratios in the fill, which minimizes PMO, LIEC, construction subsidence, and reduces the risk of EEM contract underground fires. It is typically achieved through regulating the size of waste fragments used for fill, and applying fill to the site in layers, with fill placement by scrapers or trucks and the use of roller based compacting plant. -Conduct filed rolling test to check whether the compacting performance comply with design; -Installation of subsidence monitoring pile and conduct continuous monitoring; -Restrict any residents and livestock’s access to the construction sites. River Odor from dredged -All dredged sediment storage or disposal Contractor CSC, PIU, Included in rehabilitation (HG sediment facilities will be sited at least 50 m from the PMO, LIEC, construction 5.1 and JX 5.1) nearest air quality sensitive receptor. EEM contract -Dredged sediment will be transported in closed tank wagons to contain odor and prevent leakage during transit. -The dredged materials should be cleared from the project site in time to avoid long term stockpiling; - Disposal of dredged To address potential contamination of dredged Contractor CSC, PIU, Included in sediment sediments, a precautionary measure assuming PMO, LIEC, construction the potential exceedance of pollutant levels will EEM contract be adopted, requiring the double lining of the soil surface of all (temporary) disposal sites to prevent contaminating the soil and groundwater, and treatment and testing of heavy metals and pesticides of the supernatant water prior to discharge.; -At Hegang, all dredged material will be disposed of at theLingbei mining pit. At Jixi, dredged material will be reused for landscaping works. Here, soil quality and leaching tests will

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be conducted on the dried dredged sediment prior to re-use. Dredged sediment failing the leaching test will not be re-used. The final disposal plan will be reviewed against the sediment quality test results.

Pollution from - River dredging (using a backhoe) and bank Contractor CSC, PIU, Included in dewatering water reconstruction works will be conducted ‘in the PMO, LIEC, construction dry’ by constructing a coffer dam around the EEM contract works area. -Temporary storage of dredged sediments will be held in clearly demarcated storage sites for dewatering. -Wastewater from dewatering sites will be carefully controlled: water draining from these sites will be treated by sedimentation in consolidation tanks, with wastewater from these tanks returned back to the river only when suspended sediments (SS) are less than 20 mg/L (meeting Class I requirement of GB8978- 1996).

Roads, flyover Blasting noise and -The maximum weight of explosives can be Contractor CSC, PIU, Included in and tunnel vibration used at the same time is 67.1 kg for tunnel PMO, LIEC, construction (Component 3.1, construction to ensure compliance of with EEM contract and HG 5.3, JX vibration standards at the nearest sensitive 5.3, SY5.2) receptor; -Construction activities of Yunfeng tunnel shall be properly scheduled considering the life style of elderly people. Asphalt smoke -site asphalt mixing and concrete attaching Contractor CSC, PIU, Included in stations at least 300 m downwind of the nearest PMO, LIEC, construction air quality protection target; EEM contract -equip asphalt, hot mix and batching plants with fabric filters and/or wet scrubbers to reduce the level of dust emissions.

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a Mining remediation is sensitive and the site-specific environmental management plans include detailed descriptions of measures Contractors for the mining remediation pilots have to comply with. They are for example: (i) Leachate seepage into groundwater (all remediated sites should be lined with compacted clay to prevent leachate entering groundwater or surface waters etc.); (ii) Risk of subsidence (fill compaction should be undertaken to reduce void ratios in the fill, which minimizes subsidence, and reduces the risk of underground fires etc.); (iii) Safety (site investigations should be undertaken to verify detailed design of geotechnical and construction works in order to ensure the profile of the site etc.); (iv) Waste rock analysis (waste rock composition test and analysis results during detailed design should be verified etc.); (vi) Underground fire (sulfur content of waste rock should be tested etc.); (vii) Soil quality at the site should be tested to check the pollution conditions. The law on the Prevention and Control of Soil Pollution of the People’s Republic of China (adopted on August 31, 2018, effective on January 1, 2019) should be strictly abided. In addition, the source of top-soil and clay should be identified given so high amounts of soil to be used. (viii) Groundwater quality (if underground water is found at engineering survey or construction) monitoring should be conducted three times at least, covering wet season, dry season and normal season. (ix) Drainage system shall divert the surface runoff timely in order to avoid generation of leachate and landslide etc.

Table EMP-4: Summary of Potential Impacts and Mitigation Measures during Operation Stage Item Potential Impact Mitigation Measures Implementing Supervising Source of and/or Issues Entity Entity funds Operation Stage Luobei Industrial Park Failure to control -Ensure proper monitoring of pre-treatment WWTP Industry park Connected WWTP (Hegang) influent quality of system in place at all wastewater contributing operator management companies, subcomponent and wastewater at the industries; committee, EPB budget Jiguan Industrial Park new WWTPs -Take action to enforce pre-treatment PMO, EPB (for WWTP (Jixi) standards on all industries in the industrial supervision subcomponent park. and (Component 3.2) monitoring) Failure to operate the -Ensure proper O&M systems are in place WWTP Industry park WWTP new WWTPs to meet and equipment in good working order and operator management operation design and also ensure backup power system available; committee, budget discharge standard -Provide operational training to WWTP staff. PMO, EPB Odor at WWTP -Ensure that the WWTP deodorization WWTP Industry park WWTP facilities are operating properly; operator management operation -Strengthen operation management committee, budget PMO, EPB Improper sludge -WWTP sludge should be regularly tested for WWTP Industry park WWTP management heavy metals and other hazardous operator management operation constituents as well as moisture content; committee, budget -If sludge is non-hazardous, beneficial reuse PMO, EPB will be explored. Until reuse plan can be developed, sludge that is non-hazardous and meeting PRC standards for moisture content

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will be disposed at Baochuan sanitary landfill site of Jixi; -Ensure moisture content of the sludge complies with PRC’s Disposal of Sludge from Municipal Wastewater Treatment Plant Quality Standard for Co-landfilling (GB/T 23485-2009); -If the sludge is identified as hazardous waste sludge, it should be shipped to hazardous waste disposal center in Heilongjiang province for centralized disposal. Risk of sewage - The impervious properties shall be no WWTP Industry park WWTP leakage and pollution greater than 1.0 × 10-7 cm / sec. HDPE film operator management operation to groundwater and anti-seepage concrete structure will be committee, budget used. Other areas (i.e., offices area, internal PMO, EPB roads) are considered general impermeable zone. The impermeability shall not be greater than 1.0 × 10-6 cm / sec. A clay layer with thickness of 150 mm will be used for infiltration prevention. -establish a long-term groundwater monitoring system and emergency plan, monitoring data will be collected through wells to document any pollution incidents and determine the extent and range of such incidents to plan emergency measures and remedial actions; -Regular maintenance procedures for wastewater treatment and discharge facilities across the whole plant will be established. Risks of accidental -Provision of dual power supply; WWTP Industry park WWTP discharge, overload, -Spare parts of key components; operator management operation emergency -Regular inspection and proper maintenance committee, budget preparedness and of the WWTP; PMO, EPB response -Develop and implement an emergency preparedness and response plan for the WWTP.

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Wastewater reuse -Ensure 100% wastewater reuse by the WWTP Industry park WWTP (Luobei WWTP) project completion. operator management operation committee, budget PMO, EPB Occupational health -Use safety shoes or boots with non-slip WWTP Industry park WWTP and safety soles; operator management operation -Wear personal protective equipment and committee, budget chemical resistant clothing to avoid exposure PMO, EPB of skin or eyes to corrosive and/or polluted solids, liquids or vapors; -Post safety instructions in each workshop regarding the storage, transport, handling or pouring of chemicals; -Check electrical equipment for safety before use; verify that all electric cables are properly insulated; take faulty or suspect electrical equipment to a qualified electricity technician for testing and repair; -Wear safety goggles in all cases where the eyes may be exposed to dusty, flying particles, or splashes of harmful liquids; -Wear respiratory mask in the sludge dewatering and de-odor workshops and when moving and transporting sludge; -Obey all safety instructions concerning entry into confined spaces, e.g., check atmosphere for oxygen or for poisonous gases, use respiratory protection equipment if needed, have a co-worker stand guard in case of need for help, etc; -All workers will undergo periodic examinations by occupational physician to reveal early symptoms of possible chronic effects or allergies; and -Health and safety will be incorporated into the regular staff training programs.

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Water treatment plant Water Source -Protection measures will be formally Local WAB, Jixi and Local WAB, upgrading Protection Zone delineated for water source protection zones, EBP Qitaihe EBP subcomponents (Jixi No. including: (i) a Prohibited Zone (Grade I government 3 WTP, Qitaihe Shingle Zone), closest to the water source; and (ii) a WTP and Water Protection Zone (Grade II Zone), adjoining &Sewage Company’s the Prohibited Zone. WTP -Unauthorized personnel will be forbidden from entering the prohibited zone (to be achieved by fencing the zone (surrounding the water intake on the source water body, and providing signage notifying the public of water source protection zone). -In the Grade II zone, no new buildings or construction projects will be allowed that may drain pollutants to the water body. Sludge from WTPs -Sludge from WTPs will be shipped to the WTP EPB WTP Qitaihe Taoshan Sanitary Landfill site and operator operation Baochuan Sanitary Landfill Site respectively budgets for disposal. Occupational health -Chemicals will be transported and managed and safety in compliance with relevant state regulations on hazardous chemical substance management; -The chlorination room and chemical storage area will be equipped with automatic alarms, which will be triggered by chlorine dioxide leakage (Qitaihe WTPs) /liquid chlorine(Jixi No.3 WTP); -The duty room will be equipped with gas masks, oxygen breathing apparatus and other rescue materials; -An emergency response plan will be developed and implemented. The plan will inform staff about the characteristics of chlorine dioxide/liquid chlorine and hydrochloric acid, describe potential health

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hazards, and define accident prevention measures and an evacuation plan. River rehabilitation and Maintenance of -Daily maintenance: manage vegetation O&M Unit PMO, IA O&M Unit flood control vegetation and including pruning, weeding and replacement budget subcomponents (HG 5.1 landscape of dead or dying trees and shrubs; and JX 5.1) -Pest control: the guiding principle will be prevention first followed by integrated treatment, no pesticide to avoid water pollution. Pollution from storm -Routinely collect and properly dispose litter O&M unit PMO, IA O&M unit water and solid and debris from sidewalks, driveways, and operation waste parking lots near rivers and channels. budget -Install litter traps along waterways (small floating mesh traps attached to one bank) and regularly empty these. -Clean the roadside catch basins before rainy season to avoid surface water pollution by storm water runoff flushing debris and silt. -Regularly empty garbage bins and containers placed along the river channels; - Maintain storm-water retention facilities along the roads nearby the rivers. Embankment - Inspect all river embankment stabilization O&M unit PMO, IA O&M unit stability works for physical integrity. If signs of failure operation are discovered, a repair program will be budget implemented immediately Road subcomponents Traffic noise -Conduct follow up noise monitoring O&M unit; PMO, IA O&M unit (Component 3.1 and HG according to the domestic EIAs and this EMP Local traffic operation 5.3, JX 5.3, SY5.2) (see Table EMP-5); If required, install authority budget additional sound insulation windows at affected protection targets- -Coordinate with traffic authority to limit the speed within 30 km/h at the entrance of Yunfeng tunnel; -Coordinate with traffic authority to limit the speed within 40km/h at the section near Anshan Community for south ring road;

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-Acoustic environment will be monitored at the sensitive receptors during environmental acceptance inspection organized by EPB and the first year of operation by EEM. If non- compliance against the PRC and World Bank Group EHS guidelines is detected, further noise mitigation measures will be i.e. improved windows, and noise barriers implemented. Vehicle emissions -Conduct periodic examination of emission of EPB and IA EPB and vehicle exhaust pollutants for each vehicle, traffic policies traffic including public buses, in accordance with policies PRC regulation (such as GB18352.3-2016); operation -Refuse registration to vehicles with budget excessive emissions; Vegetation Routinely inspect and properly maintain all O&M unit PMO, IA O&M unit roadside trees, slope stabilization sites, and operation landscaping vegetation. Keep at least 98% of budget survival rate. Traffic Safety -conduct traffic audit and separate traffic O&M unit, PMO, IA Traffic safety awareness campaigns. traffic police, policies’ LIC operation budget, Package CS- 1 budget Spills of dangerous -Ensure that all trucks carrying hazardous O&M unit PMO, IA O&M unit goods materials are marked according to PRC operation norms. budget -Enforce traffic controls, and set speed limits for trucks carrying hazardous material. -Prepare a rapid spill response and clean up protocol so that in the event of a spill the appropriate people and equipment are quickly notified and action can be taken.

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Waste rock dump site Vegetation -Daily maintenance: manage vegetation O&M unit PMO, IA O&M unit rehabilitation including pruning, weeding and replacement operation (Component 4) a of dead or dying trees and shrubs; budget -Pest control: the guiding principle will be prevention first followed by integrated treatment, no pesticide to avoid water pollution; -Maintain the drainage facilities and ensure the storm water outside of the site will be diverted away. Risk of subsidence -conduct continuous subsidence monitoring; O&M unit PMO, IA O&M unit -restrict development of other land use before operation stability. budget -Significant signs should be posted in the site to prevent residents’ access before stable. -Daily maintenance should be conducted until stable. Air quality -All remediation sites will be examined on O&M unit PMO, IA O&M unit existing and future air emissions as well as operation on the risk of combustion from sulphur budget containing gases emitted from the sites. The site will be caped to prevent underground fire. Pollution risk on -All remediated sites would be lined with O&M unit PMO, IA O&M unit groundwater compacted clay and/or geomembrane; operation -Conduct period groundwater quality budget monitoring. Pollution risk on - Drainage system, such as ditches and O&M unit PMO, IA O&M unit surface water rerouting creeks surrounding the dump site operation would be provided to prevent runoff outside budget the dump site. Further treatment measures will be considered depending on the waste rock assessment results at detailed design stage. If heavy metals are detected in the leachate test, on-site treatment or transport to wastewater treatment will be employed.

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Electric Bus (QH 5.2) Disposal of used -The used batteries will be returned to the O&M unit PMO, IA O&M unit batteries manufacturer under the regulation of Electric operation Vehicle Power Battery Recycling Technology budget Policy (2015). a Mining remediation is sensitive and the site-specific environmental management plans include detailed descriptions of measures Contractors for the mining remediation pilots have to comply with. They are for example: (i) Leachate seepage into groundwater (all remediated sites should be lined with compacted clay to prevent leachate entering groundwater or surface waters etc.); (ii) Risk of subsidence (fill compaction should be undertaken to reduce void ratios in the fill, which minimizes subsidence, and reduces the risk of underground fires etc.); (iii) Safety (site investigations should be undertaken to verify detailed design of geotechnical and construction works in order to ensure the profile of the site etc.); (iv) Waste rock analysis (waste rock composition test and analysis results during detailed design should be verified etc.); (vi) Underground fire (sulfur content of waste rock should be tested etc.); (vii) Soil quality at the site should be tested to check the pollution conditions. The law on the Prevention and Control of Soil Pollution of the People’s Republic of China (adopted on August 31, 2018, effective on January 1, 2019) should be strictly abided. In addition, the source of top-soil and clay should be identified given so high amounts of soil to be used. (viii) Groundwater quality (if underground water is found at engineering survey or construction) monitoring should be conducted three times at least, covering wet season, dry season and normal season. (ix) Drainage system shall divert the surface runoff timely in order to avoid generation of leachate and landslide etc.

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4. Monitoring and Reporting

18. Monitoring will include project readiness monitoring (to be conducted by the PMO with support of the local Environmental Monitoring Station (EMS) or certificated monitoring company to be contracted by the EEM; as well as by the contractors who will be required to conduct frequent noise and air quality monitoring around construction sites), and EMP compliance monitoring to verify EMP compliance during project implementation. Monitoring and reporting arrangements defined for this project are described below.

19. Assessment of project readiness. Before construction, the EEM will assess the project’s readiness in terms of environmental management based on a set of indicators (Table EMP-5) and report it to ADB and the PMO. This assessment will demonstrate that environmental commitments are being carried out and environmental management systems are in place before construction starts, or suggest corrective actions to ensure that all requirements are met.

Table EMP-5: Project Readiness Assessment Indicators Indicator Criteria Assessment EMP update The EMP is updated after technical detail design Yes No as needed, approved by ADB, and disclosed on the project website Compliance with loan The borrower complies with loan covenants Yes No covenants related to project design and environmental management planning Public involvement Meaningful consultation completed Yes No effectiveness GRM established with entry points Yes No Environmental supervision in Environment specialist appointed by PMO Yes No place Environment specialist appointed by PIUs Yes No EEM/EEM contracted by PMO Yes No Contractors have site-specific EMPs Yes No EEM contracted by LPMOs/IAs Yes No Bidding documents and Environmental requirements of loan assurance Yes No contracts with environmental and EMP are incorporated in bidding documents safeguards Environmental requirements of loan assurance Yes No and EMP are included in contract documents EMP financial support The required funds have been set aside by IAs, Yes No PMOs, PIUs, contractors and the O&M units to support the EMP implementation

20. Environmental impact monitoring. Table EMP-4 shows the environmental impact monitoring program specifically designed for this project. Environmental monitoring of air quality, noise and water quality during construction and operation will be conducted by the EMS. The cost for waste rock composition analysis will be covered by the design contract of LDI.

21. The environmental monitoring results will be compared with relevant PRC performance standards (Table EMP-6), and non-compliance with these standards will be highlighted in the monitoring reports. Monitoring results will be submitted by the EMS to PIU, PMO and EEM monthly, and will be reported in the semi-annual environmental monitoring reports by the EEM, see reporting plan in Table EMP-6.

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Table EMP-6: Environmental Impact Monitoring Program Component Item Monitoring Parameters Monitoring Location Monitoring Implementing Supervising Frequency & Entity Entity Duration Pre-construction stage Component 4 Soil quality pH, heavy metals Mining rehabilitation Once before EMS EEM, PIU, sites; construction PMO Waste rock heavy metals, Fe2O3, Mining rehabilitation Once before LDI PIU, PMO composition Al2O3, CaO, MgO, total sites construction sulfur content, alkali content, manganese element, water content, chlorine Air quality Air quality At each of the four Once before EMS PIU, PMO boundaries for each construction mining rehabilitation sites HG 5.1, JX 5.1 dredging materials pH, heavy metals Dredging points of the Once before EMS PIU, PMO rehabilitated rivers construction Construction Stage All components Noise LAeq Boundary of all Once per EMS EEM, PIU, with civil works construction sites, at month during PMO least three sensitive construction receptors for each period subcomponent Ambient air quality TSP, PM10 Boundary of all 1 day (24-hr EMS EEM, PIU, construction sites, at continuous PMO least three sensitive sampling), receptors for each quarterly during subcomponent construction period Water and soil Soil erosion all construction sites Weekly during Contractors, EEM, PIU, conservation construction CSCs PMO period when there is construction activity

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Surface Water SS, COD, Oil Construction sites Quarterly EMS EEM, PIU, involves surface water PMO body (except for Component 4), including Huangni River and Anbang River. Component 5.1, Surface water SS Set up 2 monitoring Monthly during EMS EEM, PIU, 5.2, 5.3 quality stations at each of the construction PMO following locations during period when construction: there is Bridge construction; construction Pipeline crossing river activity construction; River dredging point. Station 1: 50 m upstream of the location; Station 2: 100 m downstream of the location Component 4 Waste rock pH, NH3-N, nitrate Groundwater monitoring Three times, LDI EEM, PIU, leachate nitrite, volatile phenols, point at the four mining once in wet PMO cyanide, As, Hg, Cr6+, rehabilitation sites. The season, once in total hardness, Pb, sampling locations are normal season fluoride, Cd, Fe, Mn, set out in the FSRs. and once in dry season dissolved solids, IMn, sulfates, and chlorides, coliforms Subsidence elevations Monitoring piles installed Continuous in CSCs, LDI EEM, PIU, in line with the locations one year PMO,CSC set out in the FSRs HG 5.1 and JX 5.1 Construction SS, BOD5, COD, LAS etc all construction sites Weekly during Contractors, EEM, PIU, wastewater construction CSCs PMO supernatant water period when from dredged there is sediment disposal construction sites activity

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Operation stage (the first year) Component 3.1, Ambient air quality TSP, NO2, CO, PM10 Sensitive receptors Quarterly EMS O&M unit, and HG 5.3, JX along the project roads EEM, PMO 5.3, SY5.2 referring to the baseline (Roads, flyover monitoring locations and tunnel) Noise LAeq Sensitive receptors 2 times per day EMS O&M unit, along the project road (day time and EEM, PMO referring to the baseline night time), monitoring locations quarterly Component 3.2 Exhaust emissions Odor (H2S, NH3) At each of the 4 quarterly EMS O&M unit, (WWTPs) boundaries of the Luobei EEM, PMO WWTP and Jiguan WWTP Surface water Temp, pH, COD, BOD5, Downstream of Quarterly EMS O&M unit, quality TP, TN, SS, TPH, discharge point EEM, PMO surfactants, fecal (Kuangling river for coliforms Jiguan WWTP) WWTP influent and Volume, Temp, pH, COD, At Luobei WWTP and Monthly EMS O&M unit, effluent BOD5, TP, TN, NH3-N, Jiguan WWTP inlet and EEM, PMO SS, TPH, surfactants, outlet fecal coliforms WWTP sludge Moisture content (%), N, At WWTP sludge quarterly EMS O&M unit, P, K, Cd, Pb, As, Cr dewatering facility EEM, PMO

Noise LAeq At each of the 4 2 times per day EMS O&M unit, boundaries of the Luobei (day time and EEM WWTP and Jiguan night time), WWTP, quarterly

Groundwater pH, NH3-N, nitrate Three locations at each Quarterly EMS O&M unit, quality nitrite, volatile phenols, plant. One in the EEM, PMO cyanide, As, Hg, Cr6+, upstream, one in the total hardness, Pb, plant site and one in the fluoride, Cd, Fe, Mn, downstream dissolved solids, IMn,

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sulfates, and chlorides, coliforms Component 4 Groundwater pH, NH3-N, nitrate Groundwater monitoring Three times, EMS O&M unit, quality nitrite, volatile phenols, point at the four mining once in wet EEM, PMO cyanide, As, Hg, Cr6+, rehabilitation sites. The season, once in total hardness, Pb, sampling locations are normal season fluoride, Cd, Fe, Mn, set out in the FSRs. and once in dry season dissolved solids, IMn, sulfates, and chlorides, coliforms Subsidence elevations Monitoring piles installed Continuous in O&M unit EEM, PMO in line with the locations one year set out in the FSRs. Air quality TSP, SO2 At each of the four Monthly EMS O&M unit, boundaries for each EEM, PMO mining rehabilitation sites JX 5.5 and QH 5.1 Noise LAeq At each of the 4 2 times per day EMS O&M unit, (WTPs) boundaries of the NO.3 (day time and EEM, PMO WTP, Shengke WTP and night time), Water Drainage quarterly Company’s WTP WTP sludge quality Moisture content (%) At WTP sludge quarterly EMS O&M unit, dewatering facility EEM, PMO

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Table EMP-7: Reference Monitoring Indicators and Applicable PRC Standards Period Indicator Standard Pre-construction TSP, PM10 Class II Ambient Air Quality Standard (GB 3095-2012) and Fume from asphalt Air Pollutant Integrated Emission Standard (GB 16297-1996) Construction mixing plant (SO2, NOx) Noise limits of PME at Emission Standard of Environmental Noise for Boundary of boundary of Construction construction site Water quality during Ambient Surface Water Quality Standard (GB3838-2008) dredging and bridge construction (SS) Quality of soil at mining Soil Quality Standard: Soil Pollution Risk Control for rehabilitation sites, Construction Land (trial) (GB 36600-2018); dredged sediment for Soil Quality Standard: Soil Pollution Risk Control for Agricultural urban landscaping Land (trial) (GB15618-2018) Waste rock Hazardous Waste Identification Standard (GB 5085.1-2007) Quality of wastewater PRC’s Integrated Wastewater Discharge Standard (GB 8978- from construction sites 1996), Class I standard (for discharging into Category III water and supernatant water bodies). from dredged sediment disposal sites (SS, BOD5, COD, LAS etc) Soil erosion Class II Control Standards for Soil and Water Loss on Development and Construction Projects (GB 50434-2008) Operation Odor from WWTP Emission Standards of Odor Pollutants (GB 14554-93) Noise from WWTP and Emission Standard for Industrial Enterprises Noise at Boundary WTP (GB 12348-2008) Effluent discharge from Class 1A Discharge Standard of Pollutants for Municipal WWTP Wastewater treatment Plant (GB 18918-2002)

22. EMP monitoring. EMP monitoring will be undertaken by the PMO, with verification by the EEM, who will report to ADB the project’s adherence to the EMP, information on project implementation, environmental performance of the contractors, and environmental compliance through semi-annual environment progress reports (Table EMP-8). The reports should confirm the project’s compliance with the EMP, local legislation such as PRC EIA requirements, and identify any environment related implementation issues and necessary corrective actions. The performance of the contractors in respect of environmental compliance will also be reported. The operation and performance of the project GRM, environmental institutional strengthening and training, and compliance with all covenants under the project will also be included in the report. The project quarterly progress report will also include environmental section on EMP implementation and monitoring verified by LIEC.

23. Environmental acceptance monitoring and reporting. Within three months after each component completion, or no later than 1 year with permission of the local EPB, environmental acceptance monitoring and audit reports of each component completion shall be: (i) prepared by a licensed environmental monitoring institute in accordance with the PRC Management Method for Acceptance of Environmental Protection at Construction Project Completion (MEP, 2001), (ii) reviewed for approval of the official commencement of individual component operation by environmental authorities, and (iii) finally reported to ADB (Table EMP-8). The environmental acceptance reports of the component completions will indicate the timing, extent, effectiveness of completed mitigation and of maintenance, and the needs for additional mitigation measures and monitoring during operations.

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Table EMP-8: Reporting Plan Reports From To Reporting Frequency Construction Phase Progress reports by Internal project progress report by Contractors, PIU Monthly contractors contractors, including EMP monitoring CSCs results by CSCs. Progress reports by Internal project progress report PIU PMO Quarterly PIUs including EMP implementation progress Environment impact Environment quality monitoring report EMS PMO, Quarterly monitoring report by licensed EMS (EEM contracted by EEM LPMOs/IAs) Reports to ADB and Project progress report (including PMO with ADB Quarterly disclosed to APs section on EMP implementation and support of monitoring) LIEC External environment monitoring reports EEM ADB, Semi- APs annual Operation Phase Reports to ADB and Project progress report (including PMO ADB Semi- disclosed to APs section on EMP implementation and annual monitoring) External environment monitoring reports EEM ADB, Annual APs until PCR Notes: ADB = Asian Development Bank; AP = affected people; EEM = external environmental monitor; EMS = Environment Monitoring Station; PCR = project completion report; PIU = Project Implementation Unit; PMO = Project Management Office.

5. Institutional Capacity Building and Training

24. The capacity of PMO, PIUs, O&M units and contractors’ staff responsible for EMP implementation and supervision will be strengthened. All parties involved in implementing and supervising the EMP must have an understanding of the goals, methods, and practices of project environmental management. The project will address the lack of capacities and expertise in environmental management through (i) institutional capacity building, and (ii) training.

25. Institutional strengthening. The capacities of the PMOs and PIUs to coordinate environmental management will be strengthened through a set of measures:

(i) The appointment of qualified environment specialists within the PMOs staff to be in charge of EMP coordination, including GRM and coordination of environmental impact monitoring, training, reporting, etc.; (ii) The contracting of specialists in mining remediation, road and traffic safety, industrial wastewater, river and green infrastructure, and non-revenue water under the loan implementation (package CS1); (iii) The contracting of an External Environmental Monitor (EEM) to guide and verify PMO and PIUs in implementing the EMP and ensure compliance with ADB’s Safeguard Policy Statement (SPS 2009); (iv) The appointment of environment specialists by the PIUs staff to conduct regular site inspections; and (v) The contracting of CSCs by the PIUs to verify environment performance of the project on construction sites; and (vi) LIEC under the loan implementation consultant service (package CS1) to guide PMOs and PIUs in implementing the EMP.

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26. Training. The PMOs, PIUs, contractors and O&M Units will receive training in EMP implementation, supervision, reporting, and on the GRM (Table EMP-9). Trainings will be facilitated by the LIEC, EEM and experts under the loan implementation consulting services.

Table EMP-9: Tentative EMP-related Training Program Topic Attendees Contents Times Periods No. of Cost Total (days) persons ($/person/ Cost day) EMP adjustment PMOs, Development Twice of each 2*0.5 20/city 50 4000 and PIUs, and adjustment project city- implementation contractors, of the EMP once prior to, CSCs, roles and and once after project city responsibilities one year of EPBs , monitoring, project supervision implementatio and reporting n. procedures, review of experiences (after 12 months) Grievance PMOs, Roles and Twice of each 2*0.5 20/city 50 4000 Redress PIUs, responsibilities project city- Mechanism contractors, , procedures, once prior to, CSCs, review of and once after project city experience one year of EPBs (after 12 project months) implementatio n. Environmental PMOs, Monitoring Once of each 0.5 15/city 50 1500 monitoring, PIUs, methods, data project city (at occupational contractors, collection and beginning of health & safety CSCs processing, project reporting construction) systems, occupational health & safety during construction Environmental PMOs, Environmental Once of each 1 15/city 50 3000 aspects of O&M units housekeeping, project city facilities sludge during project operation treatment and operation disposal process, safety operation, emergency preparedness and breakdown response procedures, waste rock dump site management Total estimated cost: $12,500 ($3125 each city)

6. Stakeholder Engagement and Information Disclosure

27. In addition to the public consultation conducted during project preparation (see section VIII), plans for public involvement during construction and operation stages have been developed

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during project preparation (Table EMP-10). PMO is responsible for public participation during project implementation. Affected communities will be involved and consulted site visits, workshops, investigation of specific issues, interviews, and public hearings. The budget for public consultation is estimated at approximately $14,800.

Table EMP-10: Public Consultation Plan Organizer Format No. of Subject Attendees Budget Times Construction Stage PMOs, PIUs Public consultation 4 times: 1 Adjusting of Residents $2,000/city & site visits time before mitigation measures, adjacent to construction if necessary; components; commences construction impact; CSCs and 1 time comments and each year suggestions during construction PMOs, PIUs Expert workshop As needed Comments and Experts of $ 500/city based on suggestions on various sectors, public mitigation measures, CSCs consultation public opinions Operational Stage O&M units Public consultation Once in the Effectiveness of Residents $ 400/city and site visits first year mitigation measures, adjacent to impacts of operation, component comments and sites; CES. suggestions O&M units Public workshop As needed Effects of mitigation Representatives $ 400/city based on measures, impacts of residents and public of operation, social sectors consultation comments and suggestions O&M units Public satisfaction At least Comments and Project $ 400/city survey once suggestions beneficiaries Total budget: $14,800 ($3,700 each city)

28. Information Disclosure relating to environment safeguards will continue throughout project implementation. The project’s environmental information will be disclosed as follows: (i) Domestic EISs and EITs (in Chinese) were disclosed on the local EPB’ websites before approval by relevant municipal/county/district environmental protection authorities; (ii) The approval of domestic EISs and EITs were disclosed on the local EPB’s websites. (iii) Copies of the domestic EISs and EITs (in Chinese) are available on request in the PMOs and PIUs. (iv) The draft EIA is disclosed on the project website at www.adb.org. (v) All semiannual environmental monitoring reports during project implementation and annual environmental monitoring report during operation (first year) will be available at www.adb.org. (vi) The environmental completion certificate report will be disclosed on local EPB’s websites before approval by relevant municipal/county/district environmental protection authorities; (vii) The approval of environmental completion certificate will be disclosed on local EPB’s websites.

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7. Grievance Redress Mechanism

29. A Grievance Redress Mechanism (GRM) has been established as part of the project EMP to receive and manage any public environmental and/or social issues which may arise due to the project. The PMOs will ensure that potentially affected communities are informed about the GRM at an early stage of the project. During the project preparation phase, the PIUs, PMO and EPB of each project city have received training on the GRM from the PPTA team.

30. The project city PMO is the lead agency responsible for overall management, implementation, and reporting of the GRM. The PMO-ES coordinates the GRM and (i) instructs the PIUs and contractors on their responsibilities in the GRM (ii) establishes a simple registry system, to document and track grievances received (including forms to record complaints and how they have been resolved); and (iii) reports on progress of the GRM in the annual environmental monitoring and progress reports (ERM) to ADB.

31. Each PIU will assign a member of staff, who is responsible for implementation of the GRM and other relevant aspects of the EMP. This will be the PIU-ES. Tasks include keeping a record of complaints. At least two months before construction commences, these contacts will be disclosed to the public at each construction site and forwarded to local residents and villagers to ensure that entry points to the GRM are well known.

32. GRM readiness procedures prior to start of construction. To be successful and reduce the likelihood of public concerns, the following measures will be implemented before any construction: a. On-site procedures: (i) all contractors and CSC staff will be briefed by the PMO-ES and PIU-ES on the GRM. Contractors and workers will be instructed to be courteous to local residents and, in the event they are approached by the general public with an issue, to immediately halt their work and report the issue to the foreman; (ii) at least one sign will be erected at each construction site providing the public with updated project information (the purpose of the project activity, the duration of disturbance, the responsible entities on-site), the GRM process, and contact names and details for the GRM entry points. b. Non-project agencies: prior to project construction, the PMO-ES will notify all relevant agencies about the project and GRM, so that if these agencies receive complaints, they know to contact PMO-ES and follow up as necessary. This will include, but not be limited to, the project city EPB, Urban Management Bureau, and traffic management authority.

8. The procedure and timeframe for the GRM is shown in Figure EMP-1, and is summarized as follows.

(i) Stage 1 (maximum 10 working days): Affected persons can submit a written or oral complaint to the contractors, CSCs or PIUs. Complaints received by any other institutions will be referred back to the PIUs for action. The PIUs will notify the PMO-ES for the complaint within two days. The PMO-ES will enter the complaint in the Complaint Register.

The contractor, in consultation with the PIU, attempts to resolve the issue directly with the affected person. Within five working days of receiving the complaint, the agency will provide clear advice to the affected person on the proposed corrective action and by when it will be taken. The corrective action will be implemented not

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later than 10 working days from receipt of the complaint. The PMO-ES will enter the resolution in the Complaints Register.

If quick corrective action is not possible, or the PIU is unsure how to proceed, or the complainant is not satisfied by the initial corrective action, then the complaint will be referred to the PMO-ES for Stage 2.

(ii) Stage 2 (maximum 5 working days): For complaints not resolved in Stage 1, Stage 2 is initiated. The PMO-ES, contractor, CSC and PIU will meet with the affected person and together discuss the issue and identify possible solutions. At the meeting, a possible solution will be agreed upon. The contractor or PIU, as appropriate, will implement the agreed solution and report the outcome to the PMO-ES.

(iii) Stage 3 (maximum 10 working days): If Stage 2 is unsuccessful (i.e. no solution can be identified or the affected person is not satisfied with the proposed solution) the PMO-ES will convene a multi-stakeholder meeting and involve the project leading group to ensure that any needed inputs from other agencies are coordinated. The workshop will identify on the outcome provide to the PMO and ADB.

33. The above steps related to the construction phase where most complaints will be directed in the first instance to the contractor, CSC or PIU. During initial operations, complaints will be received by the operation and maintenance (O&M) units of the facilities.

34. PMO will inform ADB of all complaints and actions under the GRM and include all relevant documents in its progress reports to ADB.

35. Any costs incurred to receive and document grievances will be paid by the PMO. The grievance procedures will remain valid throughout the duration of project construction and the first two years of project operation.

36. The tracking and documenting of grievance resolutions by the PMO will include the following elements: (i) tracking forms and procedures for gathering information from project personnel and complainant(s); (ii) regular updating of the GRM database by the PMO-ES; (iii) processes for informing stakeholders about the status of a case; and (iv) a simple but effective filing system, so that data can be retrieved for reporting purposes, including reports to ADB.

37. If the above steps are unsuccessful, people adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB‘s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to solve their problems by working with the concerned ADB operations department (in this case, the ADB East Asia Department). Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.34

34 See: www.adb.org/accountability-mechanism

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Figure EMP-1: The Project Grievance Redress Mechanism Stakeholders involved will depend upon the nature of the complaint and will include as a minimum the affected person(s), city PMO, PIU and project city EPB. Other stakeholder agencies relevant to particular concerns can be called upon to contribute through the provincial PMO. Note: AP = affected person, EPB = environmental protection bureau, O&M = operation and maintenance, PMO =project management office; PIU=project implementation unit; PLG=project leading group.

9. Cost Estimates

38. Cost estimates for EMP implementation, including mitigation measures, environmental impact monitoring, public consultation and training as presented in Table are summarized in Table EMP-2, Table EMP-4, Table EMP-7 and Table EMP-8. Total budget for implementing these 4 items of the EMP is therefore $597,300. Excluded from cost estimates are infrastructure costs which relate to environment and public health but are already included in the project direct costs. Excluded are also capacity building packages, the remuneration costs for environment specialists who are stall members within PMOs and PIUs, and technical experts on equipment operation and maintenance, which are covered elsewhere in the project budget. The following costs are not included in the EMP cost: (i) noise reducing pavement for Yunfeng tunnel (CNY 500,000) and Xinxing Avenue flyover (CNY1,740,000); (ii) sound in windows for South Ring road (CNY 440,000) and Xinxing flyover (CNY 534,000); and (iii) noise barrier for Xinxing flyover (CNY 3.60 million) and Gongqu Bridge (CNY900,000)

Table EMP-9: Estimated Budget for Environmental Management Plan Implementation EMP Item Estimated Cost Mitigation measures (noise mitigation cost of CNY 7.714 million not included) External monitoring by EEM $540,000 Training $12,500 Public consultation $14,800 Total $597,300

10. Mechanisms for Feedback and Adjustment 39. The EMP will be updated as needed by PMO with assistance from the LIEC and under supervision of the EEM when there are design changes, changes in construction methods and program, poor environmental monitoring results, and if mitigation measures prove to be ineffective or inadequate. Based on environmental monitoring and reporting systems in place, PIUs (with the support of the LIEC and the EEM) shall assess whether further mitigation measures or improvement in environmental management practices are required as corrective actions. PMO

Annex 151 will inform ADB promptly on any changes to the project and needed adjustments to the EMP. The updated EMP will be submitted by PMO to ADB for review and approval, and will be disclosed on the project website.

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APPENDIX 1: DRAFT TERMS OF REFERENCE FOR ENVIRONMENTAL POSITIONS

PMO ENVIRONMENT OFFICER

I. BACKGROUND

1. Development projects supported by the Asian Development Bank (ADB) routinely include a Project management office (PMO). The PMO is responsible for project implementation and comprises the provincial and/or municipal agencies involved in the project. Compliance with the Loan and Project Agreements includes implementation of an Environment Management Plan (EMP), which is prepared as part of the project environment impact assessment. The EMP is the critical guiding document to manage, monitor, and report upon potential project environmental impacts. Implementation of the EMP is a full-time task. For this reason, the PMO assigns at least one full-time officer for this role. These terms of reference describe the requirements for this officer.

II. SCOPE AND DURATION OF WORK

2. The officer will work on behalf of the PMO to implement the project EMP. The officer will report directly to the PMO. The position is for the entire project duration.

III. QUALIFICATIONS

3. The officer will have: (i) an undergraduate degree or higher in environmental management or related field; (ii) at least five years of experience in environmental management, monitoring, and/or impact assessment; (iii) ability to communicate and work effectively with local communities, contractors, and government agencies; (iv) ability to analyze data and prepare technical reports; (v) willingness and health to regularly visit the project construction sites and in different seasons; and (vi) ideally, proficiency in spoken and written English.

IV. DETAILED TASKS

4. The PMO Environment Officer will have a detailed understanding of the project EMP and supporting documents, including the domestic environmental reports, the project EIA, and project environmental assurances. The officer will have the following tasks.

(i) Assess whether the EMP requires updating due to any changes in project design which may have occurred after the EMP was prepared.

(ii) Distribute the Chinese language version of the EMP to all relevant agencies, including the implementing agencies, provincial and municipal agencies for environment protection. This should occur within three months of project effectiveness

(iii) Conduct meetings with agencies as necessary to ensure they understand their specific responsibilities described in the EMP.

(iv) Ensure that relevant mitigation, monitoring and reporting measures in the EMP are included in the bidding documents, contracts and relevant construction plans.

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(v) Confirm that the Implementing Agencies (IAs) responsible for the internal environment monitoring described in the EMP understand their tasks and will implement the monitoring in a timely fashion.

(vi) Within two months of project effectiveness, establish and implement the project Grievance Redress Mechanism (GRM) described in the EMP. This will include: (a) prepare a simple table and budget identifying the type, number and cost of materials needed to inform local communities about the GRM and starting dates and scope of construction; (b) design, prepare and distribute these materials, and plan and conduct the community meetings; (c) prepare a form to record any public complaints; (d) prepare a summary table to record all complaints, including dates, issues, and how they were resolved; and (e) ensure that all relevant agencies, including contractors, understand their role in the GRM.

(vii) Prior to construction, ensure that IAs and their contractors have informed their personnel, including all construction workers, of the EMP requirements. This will include all mitigation measures relating to impacts to air, water, noise, soil, sensitive sites, ecological values, cultural values, worker and community health and safety, respectful behavior when communicating with local communities, and responding to and reporting any complaints.

(viii) During project construction, make regular site visits with LIEC to assess progress, meet with contractors and/or local communities, and assess compliance with the EMP.

(ix) Ensure that all relevant agencies submit required progress reports and information, including environmental monitoring and reports of any issues or grievances.

(x) Compile, review, and store environmental progress reports from the IAs, records of any grievances, and any other relevant issues. Maintain digital copies of all information. When necessary, enter data into summary tables in digital format (e.g. to transfer records of grievances from hard copy forms). Ensure that all information is stored in the PMO filing system, backed up, and can be easily retrieved.

(xi) Prepare semi-annual environment progress reports.

(xii) Work closely with the PMO, IAs, loan implementation consultants, and other agencies and personnel as necessary to conduct these tasks.

V. REPORTING REQUIREMENTS

5. Semi-annual environment monitoring reports, using the template provided by ADB or a domestic format reviewed and approved by ADB.

VI. LOGISTICAL SUPPORT PROVIDED BY PMO TO THE ENVIRONMENT OFFICER

(i) Provision of hard and soft copies of the project EMP, domestic and project environmental reports, feasibility study reports, loan and project agreements, maps, and other supporting materials as necessary to ensure the officer can implement the tasks.

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(ii) Vehicle transport, office materials, and other logistical support as necessary for the officer to visit the project construction sites and local communities, arrange and conduct meetings, and prepare and distribute consultation materials.

(iii) Overall coordination, including review of the draft semi-annual monitoring reports and final responsibility for submission of the monitoring reports to ADB.

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LOAN IMPLEMENTATION ENVIRONMENTAL CONSULTANT

I. BACKGROUND

1. The project will be coordinated by Project management offices (PMO), whose overall responsibility includes implementation of the project Environment Management Plan (EMP). At the field level, the project will be implemented by a Project Implementation Unit (PIU). The PMO and PIUs will be assisted by a Loan Implementation Consultant team. The Loan Implementation Environmental Consultant (LIEC) will be a part of this team and will support the PMO and PIUs to implement the project EMP.

II. SCOPE AND DURATION OF WORK

2. This is an independent position (recruited as part of a consultant team or individually) which is not part of the PMO in-house environmental team. The specialist will report to the PMO. The position is for the entire project duration (intermittent over six years). The LIEC will be recruited as soon as possible after loan effectiveness, as the first task is to confirm project environmental readiness.

III. QUALIFICATIONS

3. The specialist will have: (i) an undergraduate degree or higher in environmental management or related field; (ii) at least eight years of experience in environmental management, monitoring, and/or impact assessment; (iii) familiarity with ADB project management requirements and national environmental management procedures; (iv) ability to communicate and work effectively with local communities, contractors, and government agencies; (v) ability to analyze data and prepare technical reports; (vi) willingness and health to regularly visit the subproject sites; and (vii) proficiency in spoken and written English.

IV. TASKS

4. Working closely with the PMO and PIU Environmental Officers, the LIEC will do the following.

(i) assess the project components’ environmental readiness prior to implementation based on the readiness indicators defined in Table EMP-5; (ii) assist PMO and PIUs to update the EMP and environmental monitoring program; (iii) review the site-specific EMPs prepared by contractors; (iv) assist the PMOs and PIUs to establish a Grievance Redress Mechanism (GRM), and provide training for all GRM access points; (v) Conduct regular EMP compliance assessments, undertake site visits as required (together with PMO-ES), identify any environment-related implementation issues, propose necessary corrective actions, reflect these in a corrective action plan; (vi) Assist in preparation of environmental part of regular project progress reports; and help improve O&M plan if necessary; (vii) provide training to PMOs, PIUs and contractors on environmental laws, regulations and policies, SPS 2009, EMP implementation, and GRM in accordance with the training plan defined in the EMP (Table EMP-6); (viii) assist the PMOs and PIUs in conducting consultation meetings with relevant stakeholders as required, informing them of imminent construction works, updating them on the latest project development activities, GRM;

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(ix) assist the FIs establishment of ESMS and provide ESMS trainings; (x) assist the FIs preparation of annual ESMS implementation report.

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EXTERNAL ENVIRONMENTAL MONITOR (EEM)

I. BACKGROUND

1. The project city PMO, Hegang, Jixi, Qitaihe and Shuangyashan, will engage a qualified external environmental monitor (EEM). The EEM will provide assistance to Heilongjiang Provincial Government (HPG, the executing agency), four city PMOs, and all PIUs in monitoring project implementation in compliance with the environmental management plan (EMP) and ADB’s safeguard policy; verify the project’s environmental performance; identify the necessary corrective actions, and reflect them in corrective action plan.

II. SCOPE OF SERVICES

2. An external environment monitor will be engaged intermittently for the entire duration of project implementation. The consultant firm with estimated total input of 20 person-months of national consultants will be engaged. The EEM will:

(i) Contract a certificated environmental monitoring station or company (EEM) to conduct physical indicator monitoring as defined in the monitoring plan of Table EMP-6; (ii) Conduct independent verification of EMP implementation status and environmental to verify that issues reported in the internal environmental monitoring report and semiannual environmental progress report in compliance with ADB’s safeguard policy statement (2009) and PRC regulations; (iii) Make recommendations to resolve any issues or problems on implementing the EMP and provide advice to city PMOs and PIUs; (iv) Compare the predicted with actual environmental impacts, assess the effectiveness of mitigation measures, and suggest enhancement measures, as required; and (v) Submit external environmental monitoring verification report to ADB and HLG with quality acceptable to ADB on semiannual basis during project implementation period in both Chinese and English.

III. TEAM COMPOSITION & QUALIFICATION REQUIREMENTS FOR KEY EXPERTS

3. Environment Management and Monitoring expert (team leader: national, 8 man-months; deputy team leader, national, 12 man-months ): It is preferred that he/she has bachelor degree or above in environmental engineering with more than 10 year’s relevant experience including 8 year’s environmental impact assessment and management experience, or professional experience in international financial organization loan projects; familiarity with PRC and ADB requirements for environmental management; ability to prepare comprehensive environmental impact monitoring and assessment reports; relevant experiences in similar ADB projects in the PRC is preferred.

(i) Team coordination and planning of external monitoring; (ii) Monitor the internal EMP compliance; (iii) Conduct routine inspection on EMP implementation; (iv) Assure the environmental mitigation measures are well undertaken in construction and operation; (v) Review project progress and compliance with the EMP based on field visit, and review the environmental impact monitoring conducted by EMS.

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IV. DELIVERABLES

4. During service period, the consultant company shall prepare the semi-annual external environmental monitoring report to ADB and PMOs in the format agreed with ADB in both English and Chinese.

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APPENDIX 2: ELEMENTS EMERGENCY PREPARADNESS AND RESPONSE PLAN

1. An emergency is an unplanned event when a project operation loses control, or cloud lose control, of a situation that may result in risks to human health, property, or the environment, either within the facility or in the local community. The project facilities should have an Emergency Preparedness and Response Plan that is commensurate with the risks of the facility and includes the following basic elements in line with the Technical Guidelines for Environmental Risk Assessment on Project (HJ/T 169-2004) and international best practices :

(i) Administration (policy, purpose, distribution, definitions, etc.) (ii) Organization of emergency areas (command centers, medical stations, etc.) (iii) Roles and responsibilities; (iv) Communication systems (v) Emergency response procedures (vi) Emergency resources (vii) Training and updating (viii) Checklists (role and action list and equipment checklist) (ix) Business continuity and contingency