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South Asia Subregional Economic Cooperation Highway Improvement Project Project Administration Manual Project Number: 52097-001 Loan Number: LXXXX Technical Assistance Number: TAXXXX August 2018 Nepal: South Asia Subregional Economic Cooperation Highway Improvement Project ABBREVIATIONS ADB – Asian Development Bank COBP – country operations business plan CPS – country partnership strategy DOR – Department of Roads EWH – East–West Highway FMA – financial management assessment GESI – gender equality and social inclusiveness GDP – gross domestic product km – kilometer MOPIT – Ministry of Physical Infrastructure and Transport PAM – project administration manual SAARC – South Asian Association for Regional Cooperation SASEC – South Asia Subregional Economic Cooperation SDR – special drawing rights TA – technical assistance CONTENTS I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 2 A. Project Readiness Activities 2 B. Overall Project Implementation Plan 3 III. PROJECT MANAGEMENT ARRANGEMENTS 4 A. Project Implementation Organizations: Roles and Responsibilities 4 B. Key Persons Involved in Implementation 5 C. Project Organization Structure 6 IV. COSTS AND FINANCING 7 A. Cost Estimates Preparation and Revisions 8 B. Key Assumptions 8 C. Detailed Cost Estimates by Expenditure Category 9 D. Allocation and Withdrawal of Loan Proceeds 10 E. Detailed Cost Estimates by Financier 11 F. Detailed Cost Estimates by Outputs 12 G. Detailed Cost Estimates by Year 13 H. Contract and Disbursement S-Curve 14 I. Fund Flow Diagram 15 V. FINANCIAL MANAGEMENT 16 A. Financial Management Assessment 16 B. Disbursement 18 C. Accounting 20 D. Auditing and Public Disclosure 20 VI. PROCUREMENT AND CONSULTING SERVICES 22 A. Advance Contracting 22 B. Procurement of Goods, Works, and Consulting Services 22 C. Procurement Plan 23 VII. SAFEGUARDS 24 A. Environment 24 B. Grievance Redress Mechanism 25 C. Involuntary Resettlement and Indigenous Peoples 25 VIII. GENDER AND SOCIAL DIMENSIONS 26 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 29 A. Project Design and Monitoring Framework 29 B. Monitoring 29 C. Evaluation 30 D. Reporting 30 E. Stakeholder Communication Strategy 30 X. ANTICORRUPTION POLICY 33 XI. ACCOUNTABILITY MECHANISM 33 XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 33 ATTACHMENTS A. Procurement Plan B. Design and Monitoring Framework C. Terms of Reference for Construction Supervision Consultants D. Terms of Reference for Road Safety Implementation Consultants E. Terms of Reference for Detailed Design Consultants F. Terms of Reference for Project Implementation Consultants (Individual) and Contract Management Specialists (International and National) G. Terms of Reference for Nongovernmental Organization for Human Trafficking Prevention and HIV/AIDS Awareness Project Administration Manual Purpose and Process 1. The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with 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. 2. The Ministry and Physical Infrastructure and Transport (MOPIT) and the Department of Roads (DOR) 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 MOPIT and DOR of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures. 3. At loan negotiations, the borrower and ADB shall agree to the PAM and ensure consistency with the loan agreement. Such agreement shall be reflected in the minutes of the loan negotiations. In the event of any discrepancy or contradiction between the PAM and the loan agreement, the provisions of the loan agreement shall prevail. 4. After ADB Board approval of the project's report and recommendations of the President (RRP), changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval, they will be subsequently incorporated in the PAM. I. PROJECT DESCRIPTION 1. The project will rehabilitate and upgrade the capacity, quality, and safety of about 87 kilometers (km) of the East–West Highway (EWH) between Kanchanpur and Kamala in southeastern Nepal. The EWH is the main domestic and international trade corridor of Nepal and forms part of the South Asia Subregional Economic Cooperation (SASEC) corridor 4 linking Kathmandu to Dhaka and Chittagong through India.1 The project will promote economic growth and contribute to enhancing the competitiveness of Nepal’s exporting industries by (i) improving interprovincial, national, and regional connectivity; (ii) providing greater access to social services, markets, and employment opportunities; (iii) supporting the development of the agriculture, industry, energy, and tourism sectors; and (iv) easing growing traffic congestion. The project will also improve road safety and road maintenance on the 1,027 km-long EWH corridor, and strengthen the capacity of the executing and implementing agencies in road safety and road maintenance. 2. The outcome of the project will be the improved efficiency and safety of the road transport system. The project is aligned with the following impacts: (i) transport connectivity within Nepal and with neighboring countries improved,2 and (ii) physical connectivity and multimodal linkages for land-based transport along major trade routes enhanced.3 3. The outputs of the project will be: (i) Output 1: Road network upgraded and maintained. The loan will rehabilitate and upgrade about 87 km of road between Kanchanpur and Kamala on the EWH to a four-lane standard, and include a 5-year performance-based maintenance period after completion of construction.4 (ii) Output 2: Planning and management for road safety strengthened. The loan will finance (i) civil works and equipment packages for road safety mitigation measures on the 1,027 km-long EWH; (ii) safety improvements for the project road, particularly for pedestrians, and bicycles and motorcycle users; and (iii) a road safety awareness campaign. The attached technical assistance (TA) will support (i) the preparation of a national road safety policy and action plan, (ii) the strengthening of the road safety council, (iii) a road safety assessment for the EWH, and (v) the implementation of gender equality and social inclusion (GESI) guidelines of the Ministry of Physical Infrastructure and Transportation (MOPIT).5 (iii) Output 3: Facilities and project readiness of Project Directorate (ADB) improved. The loan will finance (i) the preparation of detailed engineering design for pipeline road projects along the EWH, and (ii) the construction of a modern office for the Project Directorate (ADB). The attached TA will support a prefeasibility study and the preparation of design standards for service areas along the EWH. 1 SAARC Secretariat. 2006. SAARC Regional Multimodal Transport Study. Kathmandu; and SASEC Secretariat. 2016. Operational Plan 2016–2025. Manila. 2 Government of Nepal, National Planning Commission. 2016. Fourteenth Plan, FY2017–2019. Kathmandu. 3 SASEC Secretariat. 2016. Operational Plan 2016–2025. Manila. 4 Maintenance after completion of construction includes a one-year defect liability period and five years of performance- based maintenance. 5 MOPIT. 2017. Gender Equality and Social Inclusion Operational Guidelines. Kathmandu. Released in March 2018. 2 4. The detailed scope of the attached TA for Institutional Strengthening of Road Safety and Gender Equality includes the following outputs: (i) road safety policy and action plan developed, including the review of the current institutional and legal framework for road safety, the strengthening of the operation of the National Road Safety Council, the preparation of a gender-inclusive road safety policy, strategy for 2021–2030, and investment plan for 2021–2023, and the recommendation of a road safety assessment framework;6 (ii) road safety of the EWH improved, which includes a road safety assessment for the 1,027 km EWH corridor, the identification of safety blackspots, and a feasibility study for service areas along the EWH. Civil works packages are provided under the loan to mitigate safety blackspots on the EWH; (iii) road safety awareness increased, including the preparation of an interagency coordination plan, road safety campaign materials, and a pilot campaign; (iv) gender equality and social inclusion guidelines implemented, including support to promulgate the GESI operational guidelines in MOPIT.7 II. IMPLEMENTATION PLANS A. Project Readiness Activities Table 1: Project Readiness Activities 2018 Responsible Indicative Activities Individual/Unit/Agency/ Jun Jul Aug Sep Oct Nov Dec Government Advance contracting actions DOR Establish project implementation DOR, MOPIT arrangements ADB Board approval ADB Loan signing ADB, MOF Government legal opinion MOF provided Government budget inclusion MOF Loan effectiveness ADB ADB = Asian Development Bank; DOR = Department of Roads; MOF = Ministry of Finance; MOPIT = Ministry of Physical Infrastructure and Transport. Source: Asian Development Bank estimates. 6 Examples are the international road
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