Technical Assistance Report
Project Number: 38479 March 2008
Republic of Indonesia: Preparing the Regional Roads Development Project (Financed by the Japan Special Fund)
The views expressed herein are those of the consultant and do not necessarily represent those of ADB’s members, Board of Directors, Management, or staff, and may be preliminary in nature.
CURRENCY EQUIVALENTS (as of 19 February 2008)
Currency Unit – Rupiah (Rp) Rp1.00 = $0.00011 $1.00 = Rp9,165
ABBREVIATIONS
ADB – Asian Development Bank BAPPENAS – Badan Perencanan Pembangunan Nasional (National Development Planning Agency) BIMP-EAGA – Brunei Darussalam-Indonesia-Malaysia-Philippines-East Association of Southeast Asian Nations Growth Area CBO – community-based organization CIQS – customs, immigration, quarantine and security DGH – Directorate General of Highways EIRR – economic internal rate of return HIV/AIDS – human immunodeficiency virus/acquired immunodeficiency syndrome IPDP – indigenous peoples development plan IPF – indigenous peoples framework km – kilometer km2 – square kilometer KRNDS – Kalimantan Road Network Development Study MOT – Ministry of Transport MPW – Ministry of Public Works NGO – nongovernment organization NPV – net present value NTKH – Northern Trans Kalimantan Highway PPTA – project preparatory technical assistance TA – technical assistance TOR – terms of reference
TECHNICAL ASSISTANCE CLASSIFICATION
Targeting Classification – General intervention Sector – Transport and communications Subsector – Roads and highways Theme – Sustainable economic growth Subtheme – Fostering physical infrastructure development
NOTE
In this report, "$" refers to US dollars.
Vice President C. Lawrence Greenwood, Jr., Operations Group 2 Director General A. Thapan, Southeast Asia Department (SERD) Director J. Cooney, Infrastructure Division, SERD
Team leader R. Valkovic, Senior Transport Specialist, SERD Team members D. Constantin, Counsel, Office of the General Counsel M. Huddleston, Senior Social Development Specialist, Lao Resident Mission, SERD J. Miller, Principal Transport Specialist, SERD A. Samoza, Associate Project Analyst, SERD H. S. Soewartono, Senior Project Officer (Transport), Indonesia Resident Mission, SERD M. Sultana, Social Development Specialist, SERD
Map 1
o o 112o 00'E 110 00'E 130 00'E o o 10 00'N South China Sea I N D O N E S I A 10 00'N PROJECT LOCATION
PACIFIC OCEAN INDONESIA BRUNEI DARUSSALAM
REGIONAL ROADS MALAYSIA HALMAHERA DEVELOPMENT PROJECT 0o 0o KALIMANTAN SULAWESI BANGKA
SUMATRA BELITUNG PAPUA BURU SERAM Jakarta J a v a S e a KEPULAUAN ARU SUMBAWA FLORES o J A V A o N 10 00'S BALI TIMOR-LESTE 10 00'S SUMBA TIMOR I N D I A N O C E A N 0 50 100 150 200 250 110 o 00'E 130o 00'E Kilometers o 116 00'E
Conservation Area National Capital South China Sea Provincial Capital City/Town National and Strategic Road under the Project Other Road Heart of Borneo Boundary BRUNEI Provincial Boundary DARUSSALAM International Boundary Boundaries are not necessarily authoritative. o o 4 00'N 4 00'N
Malinau
Tarakan Tanjungselor
M A L A Y S I A Tanjungredeb
Liku
Sambas Aruk Singkawang EAST KALIMANTAN Kerumuk Badau Putussibau Longboh
Mempawah o o Pontianak 0 0 Tayan Sintang KALIMANTAN WEST KALIMANTAN Tenggarong Samarinda
Muara Teweh Balikpapan CENTRAL KALIMANTAN Ketapang Tanahgrogot Palangkaraya
Sampit Pangkalan Bun Barabai Kuala Kapuas SOUTH KALIMANTAN Kotabaru
Banjarmasin
o o 4 00'S 4 00'S J a v a S e a
o 112o 00'E 116 00'E
08-0536 HR o o 108 o 00'E 110 00'E 130 00'E
o o 10 00'N I N D O N E S I A 10 00'N South China Sea
BRUNEI DARUSSALAM PACIFIC OCEAN INDONESIA MALAYSIA REGIONAL ROADS DEVELOPMENT PROJECT HALMAHERA 0o 0o SUMATRA KALIMANTAN SULAWESI BANGKA
BELITUNG SERAM PAPUA
Jakarta J a v a S e a SUMBAWA FLORES o J A V A o N 10 00'S BALI 10 00'S TIMOR-LESTE PROJECT LOCATION SUMBA TIMOR
I N D I A N O C E A N 0 25 50 75 100 110 o 00'E 130o 00'E
Kilometers 112o 00'E Masalembo Is.
o 6 00'S Karimun Is. Bawean Is. 6 o 00'S JAKARTA Serang Karawang J a v a S e a Indramayu Labuhan Kandanghaur
Bogor Purwakarta Cirebon Pati Panaitan Islands BANTEN Cianjur Brebes Sukabumi Bandung Pekalongan MADURA Kudus Sumenep WEST JAVA Pemalang Lamongan Bangkalan Sapudi Is. Tasikmalaya Semarang Purwodadi Ciamis Salatiga CENTRAL JAVA Gresik Surabaya Pamekasan Raas Is. EAST JAVA Purwokerto S t r a i t of M a d u r a Kebumen Solo Situbondo Klaten Madiun Cilacap Pasuruan o Probolinggo 8 o 00'S 8 00'S J A V A Yogyakarta Bantul Kediri Malang Jember YOGYAKARTA Blitar Banyuwangi
Nusa Barung Is. National Capital Provincial Capital City/Town National and Strategic Road under the Project Proposed South Java Coast Strategic Highway Other Road I N D I A N O C E A N Provincial Boundary International Boundary Boundaries are not necessarily authoritative. 0 7 M - 3 7 a 4 0 p b
H o o 2
R 108 00'E 112 00'E 1
I. INTRODUCTION
1. During the 2006 country programming mission, the Government of Indonesia (Government) requested technical assistance (TA) to prepare the proposed Regional Roads Development Project for possible Asian Development Bank (ADB) financing. This project preparatory technical assistance (PPTA) was included in ADB’s Country Strategy and Program 2006–2009 for Indonesia.1 The Government’s medium-term strategy for the Ministry of Public Works (MPW) identified road development in less-developed regions, including northern Kalimantan and southern Java, as a priority. After several missions to Indonesia, 2 the Government agreed to the impact, outcome, outputs, implementation arrangements, cost, financing arrangements, and terms of reference (TOR) for the TA. The design and monitoring framework is in Appendix 1.
II. ISSUES
2. Indonesia is a middle-income country, with varied development across its provinces and islands. Access to roads is key to the country’s poverty reduction strategy, as improved transport accessibility reduces poverty both directly and indirectly, e.g., through better access to education and health facilities.
3. For medium-term development goals, the Government has committed to raising levels of sustainable economic growth, creating jobs, and accelerating achievement of its millennium development goals. It identifies infrastructure development and investment—including that related to road transport—as critical to meeting these objectives. Improved access to markets, strengthened intermodal integration, enhanced transport networks in less developed and border regions, and advanced regional integration and trade opportunities will result from this Government emphasis on road transport. The Government, through MPW, has given high priority to improving the road system through (i) removal of capacity constraints, (ii) rehabilitation of substandard highways, (iii) development of a sustainable maintenance system to preserve the country’s road system, including increased expenditure, (iv) investment in less developed area road networks, and (v) improved border area connections.
4. Road transport is the dominant mode in Indonesia, meeting 83% of passenger and 70% of freight demand. In recent years, MPW has concentrated major maintenance and rehabilitation on key highways in Java, Sumatra, Kalimantan, and Sulawesi.3 While about 45% of the road network is paved—including more than 75% of the national road system— non-national road network coverage is poor. Road network density is already low nationally at about 0.4 kilometer (km) per 1,000 square kilometers (km2), but is significantly lower in less developed regions.4 There are good road networks in northern Java and in parts of Sumatra, but road conditions in the rest of the country are fair to poor, especially in less developed provinces and border regions. Outside of Java and Sumatra, traffic is generally low on national and provincial roads.
1 The TA concept paper was included as Appendix A8.5, and it first appeared in ADB Business Opportunities on 30 October 2007. 2 Separate missions were fielded between 1 July and 29 August 2007 and 2–13 October 2007 to visit proposed project areas, hold preliminary discussions with the Government, and define the overall scope of the proposed project. 3 Several years of minimal maintenance expenditure after the Asian financial crisis in 1997 caused a major repair backlog, resulting in large neglected sections of the national road network. 4 The road density for Kalimantan is only 0.19 km per 1,000 km2, compared to 0.90 km per 1,000 km2 in Java. 2
5. Road sector development faces several ongoing problems: road maintenance, vehicle overloading, and road safety. Poor interdepartmental coordination and overlapping or ambiguous responsibilities further contribute to ineffective implementation of sector-level programs.5
6. Road maintenance funding for national highways is adequate, but poor maintenance planning and inefficient procedures impact its overall effectiveness. Variable quality of work and supervision for maintenance and new construction reduces the life of road assets that subsequently require higher maintenance expenditure. In addition, the common practice of vehicle overloading accelerates the deterioration of national roads. Recently, an increased number of weighbridge stations have been constructed, but they are relatively ineffective due to improper records, poor management, governance problems, inadequate equipment maintenance, ineffective implementation of traffic regulations, and poor inter- and intra- government cooperation.
7. Road safety is poor due to a rapid increase in vehicle ownership, both two- and four-wheel, on an inadequate road network, which leads to a drastic increase in traffic accidents. Road safety improvement is difficult due to substandard driver education and testing, poor vehicle safety standards, low awareness of accident risks, and limited use of road safety measures in accident-prone locations.
8. Although international donors have been active in Indonesia since 1970s, the Asian Financial Crisis in 1997 and recent decentralization laws have negated many improvements achieved under previous programs. Donor support has continued to the road sector, accounting for about 30% of MPW’s 2007 road budget. ADB and the World Bank provide assistance for overloading regulation, ADB and AusAID finance road safety programs, and all donors support capacity development for MPW, the Directorate General of Highways (DGH), and the Ministry of Transportation (MOT).
9. Donors actively coordinate with DGH and MOT to ensure adequate funding for government needs and sufficient segregation of network coverage under donor-assisted projects. MPW strategic plans for 2006–2009 and 2010–2104 have identified priority investments to improve road infrastructure in southern Java and to address development of border areas in Kalimantan.
10. In Java, economic growth and infrastructure development has favored regions and cities on the north coast, with south coast regions lagging far behind.6 Improved road infrastructure in southern Java is necessary for increased economic growth to improve access to markets and to attract investment in that area. The national road network in the south is incomplete, with some road sections of the main Southern Trans Java Highway not yet constructed, not classified as national highway, or constructed below national standards. There are gaps in network coverage, particularly in coastal areas, and cross-island linkages are limited.
11. Kalimantan is a resource-rich island with low population and road densities. Economic activity is concentrated in coastal regions due to difficult conditions and terrain that have restricted interior development. Road network development is key to ensure that economic
5 Institutional improvement in road safety issues is further effected by poor coordination with the police department, which is responsible for law enforcement, traffic management, and vehicle registration. 6 The 30 km-wide strip along the north coast of Java contains about one half of the country’s population, including the major cities of Jakarta, Semarang, and Surabaya; all major ports; and about 65% of the country’s economic activity.
3 development will occur in these less developed and remote areas. Whereas the national highway network has expanded along the coast from provincial capitals, the interior road network is very limited and characterized by low-standard roads, poor maintenance, and low traffic volumes. DGH, through World Bank financing, is undertaking the Kalimantan Road Network Development Study (KRNDS), which will develop a 20-year strategic plan for Kalimantan’s road and inland waterway network. 7 The KRNDS will define a priority-ranked listing of roads for all Kalimantan provinces on a multicriteria and economic basis.
12. Kalimantan’s border with Malaysia’s Sarawak and Sabah states has developed slowly, with only Entikong in West Kalimantan possessing full customs, immigration, quarantine and security (CIQS) and government agency facilities. Two other border posts, at Aruk and Badua, are at an advanced stage of developing full border facilities, and are expected to open in 2008.
13. Through the Brunei Darussalam-Indonesia-Malaysia-Philippines-East Association of Southeast Asian Nations Growth Area (BIMP-EAGA), ADB has funded TA for improving CIQS facilities and procedures, which included analysis of road and sea barriers to trade, identified institutional and procedural problems, and transport link capacity constraints. ADB will provide additional regional TA support in 2008 under the BIMP-EAGA initiative, which will include development of a land-based transport corridor connecting West Kalimantan province with Sarawak state. This assistance will address transnational issues and the need to develop inter- regional transport agreements to remove various barriers; assess legal, policy, regulatory, and institutional environments; and identify gaps that constrain economic integration in BIMP-EAGA.
14. In addition, under the ADB-funded Road Rehabilitation (Sector) Project 8 and Road Rehabilitation 2 Project9 and the World Bank-funded National Road Improvement Project, MOT is receiving support to improve its performance. Weighbridges are being constructed through private sector operation and management arrangements, and these projects also support road safety programs for black spot improvements, creating awareness in local communities, and training of MOT personnel.
III. THE PROPOSED TECHNICAL ASSISTANCE
A. Impact and Outcome
15. The impact of the PPTA will be to facilitate the transport of people and goods more efficiently and cost-effectively within the Project provinces, East and West Kalimantan and southern Java; nationally, between northern and southern Java; and subregionally, between the northern Kalimantan provinces and Malaysia. The outcome of the PPTA will be a multitranche finance facility project design and feasibility study for tranche 1, agreed upon by ADB and the Government. The study will outline a project, which is economically and technically feasible and socially and environmentally acceptable, to rehabilitate and upgrade road links and facilities along identified corridors. An initial poverty and social analysis for the proposed project is in Appendix 2.
7 The KRNDS draft final report will be submitted in March 2008. 8 ADB. 2001. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to Republic of Indonesia for the Road Rehabilitation (Sector) Project. Manila (Loan 1798-INO). 9 ADB. 2005. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to Republic of Indonesia for the Road Rehabilitation-2 Project. Manila (Loan 2184-INO).
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B. Methodology and Key Activities
16. The PPTA will prepare a project that is suitable for ADB funding. Its scope will include (i) an assessment of existing national and strategic roads within the northern Kalimantan and southern Java corridors, and feasibility studies for prioritized improvement works for selected road sections within these corridors 10 ; and (ii) an assessment of key road sector issues, including institutional and implementation arrangements for the proposed project.
17. The project preparation component activities will include: (i) assessing and prioritizing improvement works for selected road sections, using the KRNDS to identify priority road sections in Kalimantan; (ii) analyzing transport links to determine economic and technical feasibility, social and environmental impacts, and develop a methodology for prioritizing selection of roads to upgrade; (iii) preparing a matrix to rank road sections to form logical projects for a range of funding levels; and (iv) reviewing facilities at Indonesia–Malaysia border posts in northern Kalimantan.
18. The PPTA will also address road sector policy issues, including (i) a review of the Java Arterial Road Network Study11 and associated road sector issues, (ii) vehicle overloading, (iii) road safety for users and local communities, and (iv) institutional capacity. The latter activity will include identifying necessary training and strengthening programs, reviewing ongoing implementation problems in donor-funded projects, and assessing procurement and contract management issues.
C. Cost and Financing
19. The total cost of the PPTA is estimated at $1,625,000 equivalent, of which ADB will finance $1,300,000 equivalent. The TA will be financed on a grant basis by the Japan Special Fund, funded by the Government of Japan. The Government will finance $325,000 equivalent by providing counterpart staff, office furniture and facilities, local transport, local communications, maps, reports, and other information. The details of the cost estimates are in Appendix 3. The Government has been informed that approval of the TA does not commit ADB to finance any ensuing project.
D. Implementation Arrangements
20. MPW, as the Executing Agency, will have overall responsibility for the Government’s contribution and implementation. DGH, under MPW, will be the Implementing Agency. Due to recent experience with other ADB projects, DGH has the capacity to handle this PPTA successfully. The Government will utilize the existing road sector steering committee to oversee and coordinate all activities for carrying out the TA. The steering committee is chaired by the National Development Planning Agency (BAPPENAS) deputy minister and comprises representatives from MPW, BAPPENAS, and the ministries of transport and finance. The DGH will set up a subunit staffed with counterpart personnel for day-to-day coordination and to work with the PPTA consultants and other government agencies. The DGH will also provide office accommodation, local communication facilities, office support staff, and other administrative support.
10 The estimated length of road for the North Kalimantan Corridor is 1,300 km in West Kalimantan and 600 km in East Kalimantan. For the Southern Java Corridor, the length of road to be reviewed is estimated to be 1,700 km. Feasibility studies will cover about 800 km of priority road sections. 11 The Java Arterial Road Network Study was completed in 2002. It focused mainly on road improvements in northern Java.
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21. The PPTA will require about 145 person-months of consulting services, including 28 person-months of international and 117 person-months of national consulting services. Consultants will be engaged using ADB’s quality- and cost-based selection method, with simplified technical proposals.12 The PPTA will be implemented over 14 months, from May 2008 to June 2009. The outline TOR for consultants is in Appendix 4.
22. The consultants will submit the following reports: (i) an inception report, 1 month after services commence; (ii) an interim report, at the end of the third month of services; (iii) a draft final report, at the end of the ninth month, which presents all study results, including surveys, findings, recommendations, and social and environmental safeguard documentation; and (iv) a final report, 1 month after receiving comments on the draft final report from the DGH and ADB.
23. Tripartite meetings will be held after the submission of the inception, interim, and draft final reports. Workshops13 will be held before submission of the interim and draft final reports to present the proposed project to the Government and other stakeholders.14 The consultants will conduct seminars on ADB’s resettlement guidelines in each project province to raise awareness of process and implementation requirements.
24. The international consultants will have expertise in transport planning, transport economics, highway and pavement design, road safety, environmental assessment, resettlement, indigenous people and other social development issues, and institutional development. The national consultants will have expertise in transport planning, highway design, pavement design, structural design, economics, environmental assessment, resettlement, and social development. The consultants will be engaged by ADB in accordance with the Guidelines on the Use of Consultants (2007, as amended from time to time) and other arrangements satisfactory to ADB. TA-financed equipment will be procured in accordance with ADB’s Procurement Guidelines (2007, as amended from time to time) and will be transferred to the IA at the TA’s conclusion.
IV. THE PRESIDENT'S RECOMMENDATION
25. The President recommends that the Board approve the provision of technical assistance not exceeding the equivalent of $1,300,000 on a grant basis to the Government of Indonesia for preparing the Regional Roads Development Project.
12 The ratio for quality- and cost-based selection will be 80:20. 13 Workshops will be held in West and East Kalimantan and Yogyakarta Provinces prior to report submission. Tripartite meetings will be held in Jakarta within 2 weeks from report submission. 14 Other stakeholders will include provincial and kabupaten (district) government officials, private sector entities, and nongovernment organizations (NGOs).
6 Appendix 1
DESIGN AND MONITORING FRAMEWORK
Design Performance Data Sources/Reporting Assumptions Summary Targets/Indicators Mechanisms and Risks Impact Assumptions
Facilitate more efficient Improvement of Provincial and national • For the Indonesia- and cost-effective selected national and trade statistics Malaysia connections, movement of strategic roads to a the BIMP-EAGA passengers and goods sealed all-weather Customs reports transport agreements on the national road standard are finalized and network Traffic surveys implemented Increase in average travel speeds by 10km Department of Transport • Indonesia’s trade per hour and a survey of tariffs for relations with Malaysia decrease in average transport of goods and are stable road roughness index people by 4
Quantity of goods moving on project roads increases 5% per year in value
Quantity of goods moving across Indonesia-Malaysia border points in East and West Kalimantan increases 5% a year in value
Within 3 years of improvement work completion, traffic volume increases by 20%, bus fares are reduced by an average of 10%, and freight rates are reduced by 15% in real terms Outcome Assumptions
Multitranche finance Memorandum of Memorandum of • The Government’s facility project design understanding signed understanding priorities remain the and feasibility study for by the Government and same tranche 1 agreed on by ADB at completion of the Government and TA • The Government does ADB not seek other sources of funding
Appendix 1 7
Design Performance Data Sources/Reporting Assumptions Summary Targets/Indicators Mechanisms and Risks Outputs Risks
Technical assessments Draft final report Receipt of report by ADB • Restricted access to completed, including: submitted to the project sites in border (i) an assessment of all Government and ADB Receipt of report by areas of Kalimantan national and strategic by end of ninth month Government roads in the Northern after consulting Kalimantan and services begin Southern Java corridors, and feasibility studies for prioritized work on selected road sections; and (ii) an assessment of key road sector issues
Activities with Milestonesa Inputs • ADB: $1,300,000 1.1 Initial survey, improvement options, and data collection (month 2) 1.2 Economic analysis methodology (month 3) • Government: $325,000 1.3 Initial environmental and social impact assessment (month 3) 1.4 Poverty, social, and gender analysis (month 4) 1.5 International border facilities assessment (month 5) 1.6 Engineering design and cost estimates (month 7) 1.7 Road safety audits (month 7) 1.8 Financial management assessment of project agencies (month 7) 1.9 Initial environmental examination (month 7) 1.10 Economic analysis (month 8) 1.11 Resettlement and ethnic minority development plans/frameworks and gender strategy, including HIV/AIDS and human trafficking (month 8) 1.12 Project performance management system (month 8)
2.1 Java Arterial Roads Network Study review (month 3) 2.2 Road maintenance sustainability (month 6) 2.3 Assessment of road safety and overloading issues (month 6)
3.1 Inception report (month 1) 3.2 Interim report (month 3) 3.3 Draft final report (month 9) 3.4 Submission of final report within 1 month of receiving comments on draft final report
ADB = Asian Development Bank, BIMP-EAGA = Brunei Darussalam-Indonesia-Malaysia-Philippines-East Association of Southeast Asian Nations Growth Area, HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome. a Milestones are defined in terms of number of months from the start of consulting services. Due date is the end of the month.
8 Appendix 2
INITIAL POVERTY AND SOCIAL ANALYSIS
Country/Project Title: Indonesia/Regional Roads Development Project
Lending/Financing Multitranche Financing Facility Department/ SERD/SEID Modality: Division:
I. POVERTY ISSUES A. Linkages to the National Poverty Reduction Strategy and Country Partnership Strategy An improved transportation infrastructure is a goal of the National Mid-Term Development Plan of 2004–2009, as it opens isolated regions and supports economic development and national security. In the National Poverty Alleviation Strategy (Strategi Nasional Penanggunangan Kemiskinan), infrastructure development through national transportation management is a stated government policy for improving economic development and poverty reduction. B. Targeting Classification 1. Select the targeting classification of the project:
General Intervention Individual or Household (TI-H); Geographic (TI-G); Non-Income MDGs (TI-M1, M2, etc.) 2. Explain the basis for the targeting classification: The proposed project will generally improve the lives of those who live along the new roads by providing better access to education facilities, health facilities, and government services. Improved road access will also increase economic opportunities for those who live along the road package areas, leading to poverty reduction. C. Poverty Analysis 1. If the project is classified as TI-H, or if it is policy-based, what type of poverty impact analysis is needed? Further social analysis is required for indigenous peoples, conflict prevention, and gender impacts.
2. What resources are allocated in the PPTA/due diligence? $80,000
3. If GI, is there any opportunity for pro-poor design (e.g., social inclusion subcomponents, cross subsidy, pro-poor governance, and pro-poor growth)? Yes. Pro-poor and socioeconomic inclusion program design is required for the proposed project’s less-developed and indigenous community areas and is especially important for Kalimantan. Discussions with local governments on targeting poverty alleviation programs in these areas are suggested, since economic gaps between locals and migrants could widen with improved road access. II. SOCIAL DEVELOPMENT ISSUES A. Initial Social Analysis Based on existing information: 1. Who are the potential primary beneficiaries of the project? How do the poor and the socially excluded benefit from the project? Major beneficiaries are general road users. The poor also benefit from easy access to other areas, lower transportation costs, better access to government services and public facilities, and decreased prices for daily necessities. The poor and indigenous communities may be further disadvantaged by migrants or other population groups with stronger economic backgrounds who participate in new economic opportunities opened by improved road access. Social assessments will examine the potential negative impacts on poor communities and indigenous peoples, as well as possible social conflicts among various groups. The impact will be assessed by gender and ethnicity.
2. What are the potential needs of beneficiaries in relation to the proposed project? If the impact is significant, needs include major economic resources protection and the provision of employment opportunities or training for the poor and other disadvantaged groups. Microcredit programs, in collaboration with CBOs, will be explored in the proposed project areas. In East and West Kalimantan, social analysis will assess constraints faced by ethnic minority groups and other vulnerable peoples and will recommend measures to address them.
3. What are the potential constraints in accessing the proposed benefits and services, and how will the project address them? Economic limitation and lack of necessary skills for poor and indigenous communities may become major barriers to participating in the economic opportunities opened by the road projects. During the PPTA, assessments will be conducted for employment and small-scale economic development package programs for the poor and indigenous peoples. The use of existing government and donor programs will be explored. Through public consultation with concerned CBOs and leaders, programs will be designed to prevent social conflict that may arise.
Appendix 2 9
B. Consultation and Participation 1. Indicate the potential initial stakeholders. District and sub-district government officials, local parliamentary members, development and environmental NGOs, indigenous people organizations, affected community representatives, women’s organizations, national park and natural conservation agency officials, local tourism offices, plantation and forestry offices, and forest concession/plantation companies located in the proposed project areas.
2. What type of consultation and participation (C&P) is required during the PPTA or project processing (e.g., workshops, community mobilization, involvement of nongovernment organizations and community-based organizations, etc.)? A series of public consultations must be conducted at the district level, and if necessary at the provincial level, which involves concerned and relevant CBOs, environmental NGOs, and relevant local government officials and agencies in the proposed project areas. The public must be informed about final design and programs to avoid land speculation and social disruption.
3. What level of participation is envisaged for project design? Information sharing Consultation Collaborative decision making Empowerment
4. Will a C&P plan be prepared? Yes No Please explain. The consultant will prepare the C&P plan during the PPTA.
C. Gender and Development 1. What are the key gender issues in the sector/subsector that are likely to be relevant to this project/program? Female-headed households are commonly found in Kalimantan, as male members often leave the villages to work in Malaysia. Improved access to public facilities, e.g., education and health, will provide positive impacts to the female population’s well-being.
2. Does the proposed project/program have the potential to promote gender equality and/or women’s empowerment by improving women’s access to and use of opportunities, services, resources, assets, and participation in decision-making? Yes No Please explain. The proposed project will improve women’s access to education and health facilities as well as to other economic resources. A gender strategy will be prepared during the PPTA for various project components.
3. Could the proposed project have an adverse impact on women and/or girls or to widen gender inequality? Yes No There is no direct adverse impact on women. However, the influx of workers and migrants can pose a potential risk of HIV/AIDS and trafficking of women and children. In addition, resettlement activities can affect women’s subsistence activities. Increased road accidents may occur, impacting the majority of the road users who are area women traveling to their swidden fields. To address these potential adverse impacts, gender-specific measures will be included in the HIV/AIDS and human trafficking awareness programs, road safety awareness campaign, resettlement plan, and relevant social development activities. III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS
Issue Nature of Social Issue Significant/Limited/ Plan or Other No Impact/Not Known Action Required Involuntary Resettlement Clearance of road ROWs for Limited for road widening for Full Plan for each road improvements may land in rural areas or other province for displace housing and economic activities within tranche 1 economic livelihood ROW. Short Plan activities including roadside Resettlement shops and agriculture. For new road alignment, Framework for impact will be identified during tranches 2 and 3 Land acquisition for road PPTA. Funds for further No Action alignment may also affect investigation in the PPTA are Uncertain residential, commercial, and required. other livelihood activities such as agriculture.
10 Appendix 2
Issue Nature of Social Issue Significant/Limited/ Plan or Other No Impact/Not Known Action Required Indigenous Peoples Dayak communities in Significant to limited impact Plan in tranche 1. If Kalimantan. might occur if the proposed indigenous peoples road affects communal lands are affected by Might be affected by or hunting areas. involuntary involuntary resettlement, but resettlement, a only tranche 2 or 3; social Possible further combined assessment will be marginalization of indigenous resettlement and examined in PPTA. communities due to land ethnic minority transactions with migrant development plan communities. will be prepared. Other Action Indigenous peoples framework for tranches 2 and 3 No Action Uncertain Labor The proposed project will Limited impact may occur if Plan Employment bring employment the contractors bring their Other Action Opportunities opportunities to male and own workers into the areas. No Action Labor Retrenchment female community Uncertain Core Labor Standards17 members; provision of fair wages and basic facilities in the labor camp and preventive measures for child labor will be built into the contractor’s bidding document. Affordability Action No Action Uncertain Other Risks and/or High HIV/AIDS incidence in Significant to limited impact Plan Vulnerabilities northern districts of West might occur for land-based Other Action HIV/AIDS Kalimantan; potential for conflicts as improved access No Action Human Trafficking human trafficking. could intensify the tensions Uncertain Others (conflict, political and widen economic gaps instability, etc.), please Land-based conflict and between migrants and the specify: economic gaps between local population indigenous communities and migrants in East Kalimantan.
Possible future decrease of income for river transport enterprises in East Kalimantan.
IV. PPTA/DUE DILIGENCE RESOURCE REQUIREMENT 1. Do the TOR for the PPTA (or other due diligence) include poverty, social, and gender analysis and the relevant specialist/s? Yes No If no, please explain why. 2. Are resources (consultants, survey budget, and workshop) allocated for conducting poverty, social and/or gender analysis, and C&P during the PPTA/due diligence? Yes No If no, please explain why. CBO = community-based organization, HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome, NGO = nongovernment organization, PPTA = project preparation technical assistance, ROW = right of way.
Appendix 3 11
COST ESTIMATES AND FINANCING PLAN ($'000) Total Item Cost A. Asian Development Bank Financinga 1. Consultants a. Remuneration and Per Diem i. International Consultants 640.0 ii. National Consultants 182.0 b. International and Local Travel 77.0 c. Vehicle Rental 36.0 d. Reports and Communications 16.0 2. Equipmentb 14.0 3. Seminars and Meetings 32.0 4. Surveys 190.0 5. Miscellaneous Administration and 25.0 Support Costs 6. Representative for Contract Negotiations 5.0 7. Contingencies 83.0 Subtotal (A) 1,300.0
B. Government Financingc 1. Office Accommodation and Transport 150.0 2. Remuneration and Per Diem 135.0 of Counterpart Staff 3. Other 40.0 Subtotal (B) 325.0 Total 1,625.0 a Financed by the Japan Special Fund, funded by the Government of Japan. b Equipment to be procured will include the following: 3 desktop computers, including standard office software; 2 printers; 2 scanners; 2 handheld Global Positioning System units; 2 photocopiers; 1 fax machine; and 2 digital cameras. c In-kind. Source: Asian Development Bank estimates.
12 Appendix 4
OUTLINE TERMS OF REFERENCE FOR CONSULTANTS
1. The terms of reference (TOR) for the services under the project preparatory technical assistance will include, but not be limited to, the following:
A. Project Design and Management
2. Prepare the overall design of a multitranche financing facility (MFF) for the Regional Roads Development Project, taking into account the concept and priorities for the project prepared by the Directorate General of Highways (DGH). The design of the MFF should be composed of two to three tranches, based on a preliminary estimated cost for ADB financing of $500million. It is expected the latter tranches will include road sections that require a longer period for sub-project preparation.
3. Prepare a draft RRP, in the ADB format including all relevant appendices, for submission of the MFF and first tranche for approval by ADB’s Board. Prepare the overall design of latter tranches of the MFF, including designation of specific road improvement works, preparation of preliminary cost estimates, economic analysis and frameworks for resettlement, environmental and social issues and impacts identified during the project analysis.
4. Design a project performance monitoring system in accordance with the ADB’s Guidelines for Project Performance Monitoring. Develop a detailed evaluation and monitoring framework for the ensuing project including impacts, outcomes, and outputs with corresponding measurable performance indicators/targets, monitoring mechanisms and risks/assumptions. Provide baseline data for all proposed indicators. Identify agencies responsible for monitoring activities and when these activities should be undertaken.
5. The Consultant will undertake project preparation in two phases. Phase 1 is to review the overall road networks, assessing technical, economic, social and environmental issues to determine a priority list of road sections in each province. In Phase 2, the consultant will undertake a full feasibility study for each of the priority roads identified.
1. Project Preparation—Phase 1
6. For the northern Kalimantan corridor, review the draft final report of the Kalimantan Road Network Development Study to determine the validity of the recommended priority-ranked list of roads within the project area, identify additional information required, and complete any necessary further analysis. Prepare an assessment of the potential for economic corridor development from both a national and sub-regional perspective. For the southern Java corridor, in consultation with provincial authorities, review the identified road network in the area of interest, assess provincial and regional development plans and determine the need for expansion or reduction of the scope of project roads. Assess the national road standards applicable for the road classification and determine options for improvement to provincial and kabupaten roads.
7. Evaluate the economic growth potential of the project area on the basis of existing and planned investment projects, including a baseline survey of key monitoring criteria for each subproject road. Estimate the potential population growth in the project area and the tourism development potential on project roads.
8. Complete a road inventory survey of road and bridge conditions for each road section; review all bridges and major drainage structures to determine superstructure, substructure, and foundations type and conditions. Assess any requirement for repairs or refurbishment of bridge
Appendix 4 13 and drainage structures. Identify key geotechnical and geological conditions and constraints. Determine preliminary cost estimates for each of the project roads, based on estimated quantities for homogeneous sections and utilizing recent contract rates in the project provinces.
9. Evaluate the economic growth potential of the project areas on the basis of existing and planned investment projects. Estimate the potential population growth in the project area and the tourism development potential on project roads. Review existing traffic counts and origin- destination surveys, including axle load surveys and relevant information from sector wide studies to determine traffic growth and vehicle classification and trends for overloading. Based on vehicle operating costs for similar homogenous road sections or other acceptable economic analysis methodology, undertake a preliminary economic evaluation for each project road.
10. Assess the level of road accidents, the degree of road safety awareness of local communities, and level of road safety measures applied to roads in the project area. Review and analyze national and local institutional capacity of agencies responsible for implementing road safety measures and enforcement of regulations.
11. Undertake an initial environmental examination in accordance with the Ministry of Public Works’ (MPW) environmental guidelines, ADB’s Environmental Policy (2002), and guidelines on ADB’s website, including determining the environmental category for each road project.
12. Conduct field work to collect quantitative and qualitative data and prepare initial socio- economic profiles of the Project Affected Communities in the Project areas. Examine socioeconomic conditions for ethnic minority peoples and other vulnerable groups, to determine social and economic development and constraints. Undertake an initial evaluation of poverty and social issues based on the requirements of the ADB’s Handbook on Poverty (2006). Describe the incidence of poverty, and assess its causes and the extent to which the proposed project will address them. Undertake a social and gender analysis as per ADB guidelines above and ADB's social safeguard policies on Involuntary Resettlement (1995), Indigenous Peoples (1998), and Policy on Gender and Development (1998).
13. Prepare a matrix to determine viable levels of improvement for each link for a range of funding options, with priority ranking based on weighted multi-sector criteria. For roads in the northern Kalimantan, the evaluation will develop additional or alternative non-economic criteria for priority ranking to ensure that a fair balance of project roads is selected in each project area.
2. Project Preparation—Phase 2
14. Undertake a centerline survey of the project roads, undertake all necessary pavements testing to determine existing pavement conditions, identify and assess viable material sources for use during construction and complete an assessment for both minor and major drainage structures, including new bridges. Prepare an assessment of alternative pavement treatment methods for the different classes and vehicle loading on the selected project roads.
15. Prepare feasibility road and structure designs, including preparation of drawings. Bridges will include: (i) bridge type, (ii) length, (iii) geometry (of bridges and approaches), (iv) soil characteristics, and for existing bridges (v) general condition of structural components, (vi) current loading capacity for each bridge to be retained and recommend load restrictions. Determine and detail any requirement for repairs or refurbishment, including replacement of abutments and/or piers. Determine construction quantities, and overall construction costs for each road section for each improvement option based on engineering investigation results.
14 Appendix 4
16. Undertake necessary additional traffic surveys for each road section, including classified traffic counts, origin-destination surveys and axle load surveys. Undertake a baseline survey of key monitoring criteria for each subproject road.
17. Undertake road safety audits on each project road. Identify key community education and institutional constraints and determine training and capacity building programs, including detailed budgets and implementation schedules.
18. Calculate economic vehicle operating costs for each road section with and without the proposed improvements, based on estimated changes in surface roughness. Quantify the benefits, using shadow prices, for each section and for each improvement option, including time savings from improved road conditions, road maintenance savings, and fewer traffic accidents.
19. Prepare a matrix that shows viable improvement levels for each link for a range of funding options. This matrix will allow the identification by economic NPV of the optimum improvement packages for the proposed project within budget constraints. Assess the EIRR and NPV by homogenous road section based on ADB’s Guidelines for Economic Analysis of Projects (1997). Derive appropriate sensitivity and switching values by varying the major parameters affecting project viability, including a full distribution analysis. The economic analysis will evaluate alternatives using HDM-IV1 and will assess total life cycle costs. The analysis must identify risks and undertake a risk and sensitivity analysis of the EIRR in accordance with ADB’s Handbook for Integrating Risk Analysis in the Economic Analysis of Projects (2002). Undertake a comparative analysis of the proposed sub-projects using the IRMS and HDM-IV evaluation models to identify key differences in outputs. From a regional perspective for relevant roads near the international border in Kalimantan, prepare a distribution of benefits between Indonesia and Malaysia.
20. Review the condition of the Malaysian road network near the existing and proposed Indonesian border points. At each of the road border crossing posts between Indonesia and Malaysia analyze physical, institutional and capacity building requirements to improve existing border procedures to enable improved handling of customs, immigration, quarantine and security (CIQS) procedures. Review the existing and proposed facilities at border posts in Malaysia and assess their development plans in the border regions. Identify programs to compliment proposed CIQS systems and procedure improvements in Indonesia.
21. Describe the provision of transport services both within Indonesia and between Indonesia and Malaysia, make an initial evaluation of competitive forces on the provision of services and tariffs, and determine the potential service improvements. Determine the extent benefits from improvements to the transport network will be passed on to end users for different user groups;
22. Undertake a review of the activities of the Indonesia Road Maintenance System (IRMS), and conduct a critical analysis of road expenditure projections for IRMS revenues and expenses required to maintain the national road network. Assess maintenance planning, implementation procedures, and institutional capacity for road maintenance at the national and sub-national level.
23. Prepare an initial environmental examination, summary initial environmental examination, environmental assessment and review framework, and a regional assessment, as appropriate, in accordance with the Ministry of Public Works’s (MPW) environmental guidelines, ADB’s Environmental Policy (2002), and guidelines on ADB’s website.2
1 Highway development and management software, version IV. 2 Environmental Categorization and Rapid Environmental Assessment Checklists. Available: http://www.adb.org/documents/Guidelines/Environmental_Assessment/eaguidelines002.asp
Appendix 4 15
24. Estimate, and provide a breakdown of, costs of environmental mitigation measures, project monitoring, and capacity development, including preparation of an environmental monitoring plan. Assess the capacity of responsible central and provincial institutions to conduct environmental impact assessments and environmental management. Assess training needs, and recommend improvements to institutional arrangements.
25. Collect quantitative and qualitative data in the field, and prepare socioeconomic profiles of affected communities in project areas in accordance with ADB guidelines, including Handbook on Social Analysis (2007), Poverty Handbook (2006), and Handbook on Resettlement (1998). Include gender and ethnic minorities profiles. Examine socioeconomic conditions for indigenous peoples and other vulnerable groups to determine social and economic development and constraints.
26. Evaluate poverty and social issues in the project area based on ADB’s Handbook on Poverty (2006). Describe the incidence of poverty, and assess its causes and the extent to which the proposed project will address them. Identify potential barriers to the poor benefiting from economic growth, and recommend seasonal and long-term interventions that could maximize poverty reduction. The presence of ethnic minorities or other vulnerable groups within the zone of influence should be determined together with the proposed project’s potential impact. If negative impacts are identified, mitigation measures will be developed and their costs estimated.
27. Analyze the proposed project’s potential poverty impact, focusing on the impact of the road improvements on social services, movement of goods and people, and poverty. The proposed project’s economic analysis will include distributional analysis between stakeholders including the poor. A poverty impact ratio will also be calculated for the proposed project.
28. Prepare a resettlement framework for the project components within each province based on ADB’s Involuntary Resettlement (1995) and Handbook on Resettlement: A Guide to Good Practice (1998). Review and assess the impacts of land acquisition or loss of land use on project- affected people by gender and ethnic group, including impacts caused by permanent or temporary land acquisition. Assess the capacity of responsible central and provincial institutions to plan, manage, implement, finance, and monitor effective land acquisition, compensation, and resettlement. Identify capacity-development measures to be included in the proposed project.
29. Develop a time-bound indigenous people development plan (IPDP) and an indigenous people framework (IPF) for latter tranche sub-projects. The IPDP and IPF, developed in accordance with ADB’s Policy on Indigenous Peoples (1998), will include specific measures and approaches to address these concerns. Preparation should fully involve stakeholders and include executing and implementing agencies. Identify areas for institutional strengthening of DGH in implementing the IPDP and IPF, and recommend capacity development. The IPDP must be detailed enough to allow implementation of all proposed measures, and provide details of budgets, implementation arrangements, and schedules.
30. Assess HIV/AIDS programs in the project area and the implementation capacity of national and provincial authorities. Identify gaps in existing programs, or shortcomings in the capacity of responsible agencies to implement programs, and design measures to address them. Provide detailed TOR for proposed measures with details of budgets and schedules. Needs to be assessed will include awareness campaigns for project communities, including ethnic minorities, and for temporary communities associated with construction camps, and will include items to be incorporated in civil works contracts.
16 Appendix 4
31. Define project implementation arrangements. Review the implementation arrangements to make the project implementation structure and personnel more effective. Recommend a project implementation structure based on the above so that sub-projects are effectively prepared, managed, and implemented.
32. Prepare outline scope of works for a construction supervision consultant to be engaged during the implementation of the project. These terms of reference should provide details of budgets, implementation arrangements, and implementation schedules. Prepare outline TOR, with detailed budgets and schedules, to implement the strategies, training needs, capacity development, and other interventions identified above.
33. Describe the implementing agency’s accounting and audit processes and procedures. Include document and fund flows, particularly auditing integrity.
B. Road Sector Development
34. Review and assess the existing Java Arterial Roads Network Study and relevant road sector and institutional issues to determine the requirements for updating and expanding the study to cover all other transport modes in Java, including methodology of analysis, detailed assessment of the consulting services’ TOR, and financing requirements.
35. Assess the degree of vehicle overloading, the condition and operating procedures of existing weighbridge stations, and recent public-private partnership measures for facility operation to improve sustainability. Assess institutional capacity of all relevant agencies to implement policies and regulations, including enforcement to determine any capacity development requirements.
36. Review the current and future road safety issues for road users, government stakeholders, and local communities in the project area. Assess the Ministry of Transportation’s capacity to implement ongoing and proposed road safety programs and the road safety audit by MPW, and determine any training program required.
37. Undertake an institutional capacity review of DGH in technical and managerial project implementation and monitoring, identifying necessary training and strengthening programs. Review ongoing donor-funded projects, and identify implementation problems, including procurement and contract issues, and recommend necessary remedial measures.
C. Consultant Inputs and Reporting
38. The consultant team will consist of the following international experts: team leader/transport specialist (9 person-months), highway/pavement specialist (5 person-months), transport economist (5 person-months), road safety specialist (1 person-months), environmental specialist (4 person- months), and resettlement/social development specialist (4 person-months). The national consultants will have expertise in transport planning, highway design, pavement design, structural design, economics, environmental assessment, resettlement, and social development.
39. The consultants will submit: (i) an inception report; (ii) an interim report; (iii) a draft final report; and (iv) a final report. Tripartite meetings will be held after the submission of the inception, interim and draft final reports. Workshops will be held before submission of the interim and draft final reports.