RAWALPINDI ENVIRONMENTAL IMPROVEMENT PROJECT [Loans 2211-PAK/2212-PAK(SF)]

PROJECT ADMINISTRATION MEMORANDUM

FOR THE

ISLAMIC REPUBLIC OF PAKISTAN

April 2006

CURRENCY EQUIVALENTS (as of 29 October 2005)

Currency Unit – Pakistan rupee/s (PRe/PRs) Pre1.00 = $0.0167 $1.00 = PRs60

ABBREVIATIONS ADB – Asian Development Bank ADF – Asian Development Fund AIFC – average incremental financial cost AP – affected person CBO – community-based organization CCB – citizen community board CD – city district CDR – City District Rawalpindi CO – chief officer DA – development authority DPAC – district price assessment committee EA – executing agency EMP – environmental management plan EIA – environmental impact assessment EIRR – economic internal rate of return FIRR – financial internal rate of return GDP – gross domestic product GIS – geographic information system GRC – grievance redress committee HUD&PHED – Housing, Urban Development, and Public Health Engineering Department IA – implementing agency ICB – International competitive bidding IEE – initial environmental examination IS – International shopping LAC – land acquisition collector LCB – local competitive bidding LG – Local Government and Rural Development Department LIBOR – London interbank offered rate m3/day – cubic meters per day MDG – Millennium Development Goal mld – million liters per day NGO – nongovernment organization NRW – non-revenue water O&M – operation and maintenance OCR – ordinary capital resources P&D – planning and development PDP – 10-Year Perspective Development Plan PG – government of Punjab PHED – Public Health Engineering Department

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PLGO – Punjab Local Government Ordinance PMU – project management unit PPMS – project performance management system PPTA – project preparatory technical assistance PRS – poverty reduction strategy RAC – Resettlement advisory committee RCB – Rawalpindi Cantonment Board RDA – Rawalpindi Development Authority RMC – Rawalpindi Municipal Corporation RP – Resettlement plan RT – Rawal Town SDR – special drawing rights SDS – social development specialist SEIA – summary environmental impact assessment SOE – statement of expenditures STP – sewage treatment plant TA – technical assistance TMA – tehsil municipal administration TOTP – tax on transfer of immovable property UA – union administration UC – union council UNDP – United Nations Development Programme UNICEF – United Nations International Children’s Fund WACC – weighted average cost of capital WASA – Water and Sanitation Agency WHO – World Health Organization

GLOSSARY district – A district as notified under the Punjab Land Revenue Act, 1967. Punjab province consists of 34 districts. katchi abadi – An unauthorized settlement on state-owned land of more than 40 dwellings, without land rights or physical and social infrastructure services and facilities nazim – Head of city district or a town, or tehsil, or union administration. tehsil – A tehsil as notified under the Punjab Land Revenue Act, 1967. Punjab has 122 tehsils.

NOTES

(i) The fiscal year (FY) of the Government ends on 30 June. (ii) In this report, “$” refers to US dollars.

TABLE OF CONTENTS Page

PURPOSE OF PROJECT ADMINISTRATION MEMORANDUM v

KEY PERSONS INVOLVED IN THE PROJECT vi

LOAN PROCESSING HISTORY viii

REFERENCE MATERIALS ix

PROJECT FRAMEWORK x

MAP xiv

I. PROJECT DESCRIPTION

A. Area and Location 1 B. Objectives 1 C. Components and Outputs 1 D. Special Features 4

II. COST ESTIMATES AND FINANCING PLAN

A. Cost Estimates 5 B. Financing Plan 7 C. Allocation of Loan Proceeds 8

III. IMPLEMENTATION ARRANGEMENTS

A. Executing Agency and Implementing Agencies 9 B. Project Management 9

IV. IMPLEMENTATION SCHEDULE 11

V. PROCUREMENT A. Civil Works 12 B. Goods 12

VI. CONSULTING SERVICES 14

VII. DISBURSEMENT ARRANGEMENTS

A. Imprest Account 15 B. Statement of Expenditures 15 C. Condition for Withdrawal 15 D. Issuance of PCSS Numbers 15 E. Advice of Withdrawal 16

VIII. ACCOUNTING, AUDITING AND REPORTING

A. Accounting and Auditing 17 B. Reporting 17

IX. PROJECT PERFORMANCE MONITORING AND EVALUATION

A. Performance Monitoring and Evaluation 18 B. Review 18

X. ASSURANCES/COVENANTS 19

XI. ANTICORRUPTION 21

APPENDIXES

1. Project Area 2. Government Policy 3. Guide and Checklists for Procurement 4. Draft Terms of Reference of Consultants 5. Guide for the Engagement of Consultants 6. Auditing Requirements 7. Proforma of Progress Report 8. Project Performance Report 9. Project Performance Management System 10. Summary Environmental Impact Assessment

PURPOSE OF PROJECT ADMINISTRATION MEMORANDUM

This Project Administration Memorandum (PAM) contains project data and information that allows the Borrower, Executing Agency (EA), Implementing Agencies (IAs), Project Management Unit (PMU), other stakeholders, and the Asian Development Bank (ADB) to monitor project implementation and evaluate project impact.

This PAM

¾ provides concise and accurate detail, including maps and diagrams, on major aspects of project implementation;

¾ specifies roles and responsibilities of the EA, IAs, consultants, and ADB for the various actions required for satisfactory project implementation;

¾ assists project administration staff of the EA, IAs, and ADB to anticipate problems and initiate timely remedial actions or recommendations;

¾ contains a design and monitoring framework, including subsequent revisions that confirm the goal, purpose, outputs, activities, inputs, targets, indicators, key assumptions, and risks;

¾ provides a framework and checklist for monitoring progress to allow remedial actions and midstream modifications to meet project objectives;

¾ promotes systematic monitoring and evaluation of project objectives, and assessment of impacts on project beneficiaries through surveys, studies, and periodic and midterm reviews;

¾ provides the format and instructions for the EA and IAs to periodically update the project performance report in its current revised format; and

¾ references ADB’s Anticorruption Policy, indicating how ADB may be contacted about allegations of corruption and fraud.

This PAM is provided to the Government for overall monitoring of external assistance programs, and to facilitate government intervention in project implementation issues, should the need arise. It should be read along with the Report and Recommendation of the President (RRP), the Project Agreement, and Loan Agreements between the Islamic Republic of Pakistan and ADB. In case of discrepancies between the PAM, RRP, Project Agreement, and the Loan Agreements, the Loan Agreements will always prevail.

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KEY PERSONS INVOLVED IN THE PROJECT

A. ASIAN DEVELOPMENT BANK

The ADB’s Social Sectors Division (SASS) of the South Asia Department (SARD) is responsible for the implementation of the Rawalpindi Environmental Improvement Project in ADB. The ADB Pakistan Resident Mission (PRM) will support SASS in coordinating implementation activities.

ADB Headquarters

Director, SASS : Hun Kim

Sr. Urban Development : Shakeel Khan Specialist/ Project Officer : Tel no: (632) 632 5804 email: [email protected]

Control Officer : Preethi Wijeratne email: [email protected]

Asst. Project Analyst : Bernadine B. Racoma Tel. no: (632) 632 6872 email: [email protected]

Address : Asian Development Bank No. 1 ADB Avenue, Mandaluyong City 0401 Metro Manila, Philippines or P.O. Box 789, 0980 Manila, Philippines

Facsimile : (632) 636 2444 (ADB’s main fax) (632) 636 2293 (SASS)

Telephone : (632) 632 4444

ADB’s Website : http://www.adb.org

B. PAKISTAN RESIDENT MISSION

Project Officer : R.M. Farrukh email: [email protected]

Sr. Disbursement Assistant : Abid Ali Shah

Address : Overseas Pakistanis Foundation Bldg (OPF) Sharah-e-Jamhuriyat, G-5/2, Islamabad

Facsimile : +92 51 282 3324, 227 4718

Telephone : +92 51 282 5011-16, 208 7300

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C. EXECUTING AGENCY

The Executing Agency of the Project is the City District Rawalpindi (CDR). A Project Management Unit (PMU), established by CDR will be located at the Water and Sanitation Agency (WASA). The PMU will assist CDR, Rawal Town (RT), Rawalpindi Development Authority (RDA) and WASA in providing policy guidance and implementing project components.

City District Rawalpindi

City District Nazim : Raja Muhammad Javed Ikhlas

Project Management Unit

Project Director : Mr. Aslam A. Sabzwari Project Director

email : [email protected]

Address : check this

Facsimile : +92 51 55321188 check this

Telephone : +92 51 5774444 check this

D. EXCHANGE OF COMMUNICATIONS

All official letters/correspondence/fax messages, etc., must be signed by the Project Director, addressed to Director, SASS, and copied to Country Director, Pakistan Resident Mission.

LOAN PROCESSING HISTORY

(a) Approval of PPTA 21 April 2003

(b) Loan Fact-Finding Mission 11-24 March 2004

(d) Appraisal Mission 6-16 September 2005

(e) Staff Review Committee Meeting 12 October 2005

(f) Loan Negotiations 27-28 October 2005

(g) Board Circulation 22 November 2005

(h) Board Consideration and Approval 13 December 2005

(i) Loan Agreement Signing 22 December 2005

(i) Loan Effectiveness 27 February 2006

(k) Loan Closing Date1 30 September 2011

1 This date will be the closing date for withdrawals from the loan account. Goods must have been delivered and services rendered on or before this date to be eligible for payment by the Bank. No payments from the loan can be made after the loan closing date. However, when there is no formal request for extension of the loan closing date, the loan account may still be kept open for a period of three months beyond the loan closing date in order to complete disbursement of outstanding contracts under the loan. This would also allow the EA time to collect and submit documentation and invoices pertaining to expenditures incurred before the loan closing date.

REFERENCE MATERIALS

A. Project-Related ¾ Report and Recommendation of the President to the Board of Directors for Loans 2211-PAK/2212-PAK(SF) ¾ Loan Agreements between the Islamic Republic of Pakistan and ADB ¾ Project Agreement between the Province of Punjab and ADB

B. General ¾ Anticorruption Policy (2 July 1998) ¾ Anticorruption Policy: Description and Answers to Frequently Asked Questions (2000) ¾ Handbook on Management of Project Implementation (revised 1988)

B. Consultants ¾ Guidelines on the Use of Consultants by the Asian Development Bank and Its Borrowers (revised January 2005) ¾ Handbook for Users of Consulting Services (revised February 2005), 4 volumes

C. Procurement ¾ Guidelines for Procurement under Asian Development Bank Loans (revised November 2004) ¾ Guide on Bid Evaluation (August 2005) ¾ Standard Bidding Documents—User’s Guide on Procurement of Goods (November 2004) ¾ Handbook on Problems in Procurement for Projects Financed by the Asian Development Bank (Revised November 1987, reprinted October 1995) ¾ Standard Bidding Documents—User’s Guide on Procurement of Works (September 2005) ¾ Standard Bidding Documents—User’s Guide on Procurement of Works, Small Contracts (September 2005) ¾ Standard Prequalification Document—User’s Guide on Prequalification of Bidders (Revised September 2005)

D. Disbursement ¾ Loan Disbursement Handbook (January 2001)

E. Environment and Social Dimensions ¾ Handbook on Resettlement (1998) ¾ Summary of the Handbook on Resettlement (1998) ¾ Gender Checklists (2000/2003)

DESIGN AND MONITORING FRAMEWORK Design Summary Performance Data Assumptions and Risks Indicators/Targets Sources/Monitoring Mechanisms Impact • People’s perception Citizen score cards Living conditions, quality of life, and health of improved for better quality of PMU reports 1.4 million people in life Rawalpindi improved • Quality of drinking water Water quality surveys improved WASA reports

• Number of household connections to sewers and Annual Report of flush latrines increased Economic Survey, • Average monthly medical Government of Pakistan expenditures per household reduced from PRs510 to PRs350 per month Outcome Assumption Sustained reduction of • Water supply coverage Annual Report of • Future legislation continues environmental improved from 46% to 70% Economic Survey, to support consistency of degradation by end of 2010 Government of Pakistan the PLGO 2001 and CDR • Drinking water and sanitation sustainability Sustained operations of facilities in all schools in ADB review mission Risks basic urban services Rawalpindi ensured. reports • Land acquisition may delay • Sanitation coverage the implementation of STP improved from 30% to 75% Project completion and outfall sewer by end of 2010 report components • Sewage treated from the • Efforts for enhancement of existing no treatment to PPMS reports the revenue base and 199,000 m3/day by 2015 institutional strengthening • Frequency of solid waste Financial records and of RT and WASA may not collection and disposal to MIS of RT and WASA give sufficient and landfill sites improved sustainable results

significantly • Frequent turnover of

• Actions taken regarding trained staff and delayed

capacity building of RT and decision making on critical

WASA as proposed under issues by RT, WASA, and component C RDA may delay project implementation

Assumption • Autonomy extended to RT and WASA will help them manage their own affairs and positively affect organizational development Outputs Infrastructure developed (i) Sewerage System PMU monthly progress Risk for environmental • About 160 km sewerage reports • Land acquisition for STP sanitation network of trunk & area may delay execution of key sewers laid in the West 1 ADB review mission project components Sewerage District reports Assumptions • Transfer/outfall sewer to the • Water supply and sewage treatment plant Project completion sewerage customers are constructed report willing to pay more for

• All undersized sewers in the better services city replaced PPMS reports • Environmental mitigation • Local communities are MIS of RT and WASA works undertaken upstream interested and respond of Rawal Lake filtration plant positively • Sewer cleaning equipment Environment and and machinery procured for resettlement monitoring WASA reports

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Design Summary Performance Data Assumptions and Risks Indicators/Targets Sources/Monitoring Mechanisms (ii) STP of 199,000 m3/day • Continued government capacity constructed with: support for a • Inlet and outlet structures, comprehensive and forestation, laboratory, consistent devolution administration buildings, and policy protection bunds against the Soan River • Provincial governments • 4.0 m deep anaerobic ponds, and CDR remain 2.5 m deep facultative ponds, committed to actions on and 1.5 m deep maturation institutional policy reforms ponds

(iii) Storm Water Drainage Risks • Existing drains remodeled • Efforts to enhance the RT and new drains constructed revenue base may not be at Asghar Mall Road, Jamia successful, thus affecting Masjid Road, the general bus the sustainability of stand, Nia Mohallah, and improvements in financial Eidgah Road management and resource • Bank protection works generation undertaken at all critical locations of Lai Nullah • Frequent turnover of trained staff and delayed (iv) Solid Waste Management decision making on critical • About 47 RT staff trained for issues by RT, WASA, and improved solid waste RDA may jeopardize management project benefits • 6 trucks, 3 dumpers, and 6 tractors procured • RT staff respond positively • Solid waste transfer stations to training, and successfully constructed and 100 refuse use new skills and facilities collection containers provided throughout the city • A lined uncovered sanitary landfill site of 30 ha developed with a leachate collection system • A community participation program prepared and implemented • A solid waste recycling and composting program prepared and implemented • Scavengers licensed and institutionalized

(v) Slaughterhouse and Public Toilets • Additional hygienic, environmentally acceptable slaughterhouse facilities provided within the premises of the existing Sihala slaughterhouse • About 15 properly designed, suitably located public toilets constructed and connected to nearby sewer network

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Design Summary Performance Data Assumptions and Risks Indicators/Targets Sources/Monitoring Mechanisms Water Supply System • About 29 contaminated rehabilitated and and/or inefficient tubewells improved replaced and existing 32 tubewells rehabilitated • About 71 km of existing water pipeline rehabilitated and about 24 km added, with the rehabilitation of 2 storage reservoirs of 5 million gallon capacity, and about 50,000 water meters supplied and installed • Water quality and monitoring program established and implemented. • Latrines and safe drinking water connections provided to all schools in the project area

Institutional capacity of • 47 RT staff and 57 WASA RT and WASA staff provided training in strengthened technical and financial management, mapping, and asset management • Public awareness program conducted on urban issues, water quality, and sustainability of facilities • Improved accounting, management, and budgeting systems implemented by 2005, and over 80% collection efficiency of water and sanitation revenues achieved by WASA • Regulatory systems established and implemented • An environmentally sound urban development plan developed with base maps and GIS mapping of the specified area • Land use, zoning, and building laws revised and legislated • A separate asset management section set up in WASA and RT to maintain, update, and record assets for greater transparency and sustainability

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Design Summary Performance Data Assumptions and Risks Indicators/Targets Sources/Monitoring Mechanisms

Activities with Milestones Inputs ($ million)

1.1 PMU established and fully staffed by end of January 2006 • ADB 60.0 1.2 Consulting firms and individual consultants recruited by March 2006 • PG 21.4 • RT/WASA 4.3 2.1 Surveys conducted and detailed designs and tender documents prepared for Total 85.7 components A and B by June 2007 2.2 Community participation ascertained 2.3 Land acquired for STP by end of 2006 2.4 Tendering completed and contracts awarded for all components by end of 2007 2.5 Construction supervision conducted and implementation of all civil works completed by 2010

3.1 Training to WASA and RT staff completed by end of 2006 3.2 Design and implementation of public awareness program by end of 2006 3.3 Establishment of urban development plan and GIS mapping by mid-2007 3.4 PPMS update and regular quarterly reports prepared by PMU 3.5 Loan covenants monitored and respective actions taken by PG and CDR with regular follow-up by ADB during project implementation

ADB = Asian Development Bank, CDR = City District Rawalpindi, m3/day = cubic meters per day, MIS = management information system, PG = government of Punjab, PLGO = Punjab Local Government Ordinance, PMU = project management unit, PPMS = project performance management system, RDA = Rawalpindi Development Authority, RT = Rawal Town, STP = sewage treatment plant, WASA = Water and Sanitation Agency (Rawalpindi).

M A P

I. PROJECT DESCRIPTION

A. Area and Location

1. The operational area of RT and WASA covers the inner city area, over 50 newly developed colonies, and low-income slums. The beneficiaries are described in Appendix 1.

B. Objectives

2. The expected impacts of the Project are improvements in living conditions, quality of life, and health of the people of Rawalpindi by improving water supply and sanitation facilities, solid waste management, wastewater treatment, and slaughterhouse. The Project will result in sustainable reduction of environmental degradation and ensure sustainable operation of basic urban services.

C. Components and Outputs

3. The Project will comprise the following main components.: (i) Part A—environmental sanitation; (ii) Part B—water supply services; and (iii) Part C—institutional development, including municipal management system development, environmental support services, asset management, urban development, project implementation assistance, and incremental administration support. The project components are described below.

1. Part A—Environmental Sanitation a. Sewerage System (Subcomponent 1(a)) 4. The Project will install major sewerage networks which include:

¾ laying about (a) 160 kilometers (km) of sewerage network (trunk and area sewers) within the boundary limits of RT over 384 hectares (ha) to benefit a population of 190,000, and (b) secondary and lateral sewers in the catchment of existing trunk sewers in sewerage (SW) 02 and SW03;

¾ construction of a transfer/outfall sewer to the STP;

¾ replacement of undersized sewers in identified areas;

¾ environmental mitigation works upstream of Rawal Lake filtration plant; and

¾ procurement of sewer cleaning equipment and machinery.

b. Sewage Treatment Plant (Subcomponent 1(b)) 5. The STP will treat sewage from Rawalpindi and suburban areas, which will be received through a 24.5 km box conduit along the Lai Nullah and Soan River. Waste will be treated in stabilization ponds. The quantity of sewage from the city and suburban areas (with about 1.4 million inhabitants) is 141,000 cubic meters per day (m3/day) and is expected to increase to 272,000 m3/day by 2025. The STP will be designed for projected demand in 2025 but plant construction in this phase will be for 2015, with a projected flow of 199,000 m3/day. Treated effluent will be disposed of in the Soan River. The effluent must comply with Pakistan’s National Environmental Quality Standards. About 250 ha will be required for the plant. Components will include inlet and outlet structures, forestation, laboratory, administration buildings, and protection bunds against the Soan River. The conceptual design and layout have been prepared for 4 meter (m) deep anaerobic ponds, 2.5 m deep facultative ponds, and 1.5 m deep maturation ponds.

2 c. Stormwater Drainage (Subcomponent 1(c)) 6. The stormwater draining component includes:

¾ remodeling existing drains and construction of new drains at selected areas such as Asghar Mall Road, Jamia Masjid Road, the general bus stand, Nia Mohallah, and Eidgah Road; and

¾ carrying out (a) bank protection works at critical locations of Lai Nullah to mitigate negative impacts from floods, and (b) the necessary works for the protection of the rights-of-way of Lai Nullah.

d. Solid Waste Management2 (Subcomponent 1(d)) 7. This component will consist of:

¾ institutional strengthening of RT;

¾ procurement of vehicles and equipment;

¾ construction of solid waste transfer stations and provision of garbage bins throughout the city;

¾ development of a new lined uncovered sanitary landfill site with a leachate collection system in Mouza Losar, 30 km east of Rawalpindi;

¾ preparation and implementation of a community participation program;

¾ establishment of a solid waste recycling and composting program;

¾ development of licensing and institutionalizing of scavengers; and

¾ privatization of solid waste management systems.

8. The 30 ha landfill site will replace the temporary landfill site near central Rawalpindi. The new landfill site is expected to fulfill solid waste management requirements until 2010– 2011. Solid waste segregation is to be carried out at the community level. Bins and other adequate facilities will be provided for this purpose.

e. Slaughterhouse and Public Toilets (Subcomponent 1(e)) 9. The Project will build additional hygienic, environmentally acceptable slaughterhouse facilities on the premises of the existing Sihala slaughterhouse. This would provide a cost- effective solution with no land acquisition costs.

10. The Project will construct about 15 properly designed, suitably located public toilets connected to the nearby sewer network—near shopping centers, bus stops, and densely populated areas. Regular water supply will be enhanced through overhead tanks. O&M of the toilets will be undertaken by the private sector and revenues collected through user fees, following the example of similar successful programs in the region.3

2 A public–private partnership program has been proposed to: (i) improve solid waste collection, transportation, and disposal; and (ii) augment RT’s capacity. This is an innovative approach that meets the Government’s decentralization and devolution goals. UAs, with the help of experienced NGOs and private partners, will collect solid waste in their constituencies and dispose of it at designated transfer stations. RT, with the assistance of private agencies, will be responsible for final disposal of solid waste at the landfill. 3 Good examples are the Sulabh (privately financed) and Pune (publicly financed) public pay toilets in India; the ongoing successful experience in Karachi through the Citizen Police Liaison Committee; TMA toilets (public– private partnership); and a similar program that was initiated in Lahore in 2003 by the Lahore Horticulture Department.

2. Part B—Improving Water Supply (Subcomponent 2) 11. This component will improve the service and quality of existing water distribution systems. It will increase revenues by updating consumer databases, converting illegal connections to registered accounts, detecting and repairing leaks, and monitoring water quality. Distribution systems will be extended or rehabilitated for poorly served low-income communities with scarce or brackish groundwater. This component will include:

¾ replacement of about 29 contaminated and/or inefficient tubewells and rehabilitation of 32 existing tubewells; and

¾ construction or rehabilitation of distribution systems, including the rehabilitation of storage reservoirs and the supply and installation of 50,000 water meters.

12. It will also include a water quality and monitoring program to be conducted by WASA and the private sector, review and finalization of Rawalpindi master plan for water supply, and feasibility studies of additional water supply sources as part of the respective master plan. Under this component, the agreed PG policy for water supply (Appendix 2) will be implemented and updated following the water audit to be undertaken within a year of loan effectiveness. A comprehensive water audit will verify coverage, service level, status of actual payment of water dues and use of NRW, and examine people’s access to water.

13. As a priority, all schools in the project area will be provided latrines and safe drinking water connections. Health and hygiene education will be promoted. The Project will monitor the effects of improvements in water quality on health, especially child stunting, by organizing a representative sample study and project performance management system (PPMS).

3. Part C—Institutional Development a. Municipal Management System Development (Subcomponent 3(a)) 14. Planned interventions under the institutional development subcomponent will include:

¾ training in technical and financial management for RT and WASA staff, including mapping and asset management;

¾ increasing public awareness on urban issues, water quality, sustainability of facilities, and options for improving delivery of urban services;

¾ improving municipal financial management by introducing improved accounting procedures and management information systems that include budgeting, resource mobilization, enhanced O&M of assets, and improved billing, revenue collection, and reporting systems; and

¾ establishing regulatory systems to ensure that laws, standards, rules, and regulations are equitably and consistently applied. These interventions are critical to the long-term sustainability of urban centers. Wherever possible, technical training will be linked to measurable outputs to help determine whether skill levels have been achieved and technical training is applied. The design and implementation of measures for institutional strengthening will be coordinated with training programs provided under other ongoing programs.

b. Environmental Support Services (Subcomponent 3(b)) 15. An environmentally sound urban development plan will be elaborated to ensure a well-managed urban expansion in a fast-growing city with high demand for housing. This will

4 include preparation of base as well as geographic information systems (GIS) mapping of RT/WASA administered areas.

16. Land use, zoning, and building laws will also be revised and legislated to control urban expansion and monitor water and sanitation connections and charges. A comprehensive database will be available through this subcomponent to enable the asset management and billing departments of Rawalpindi Development Authority (RDA), RT, and WASA to increase and maintain revenue, in addition to controlling and guiding urban development, and improving urban transport.

c. Asset Management (Subcomponent 3(c)) 17. The assets of WASA and RT are scattered and no records are readily available. This subcomponent will also set up a separate asset management section to maintain, update, and record assets, resulting in greater transparency and sustainability.

d. Urban Development (Subcomponent 3(d)) 18. A baseline survey and GIS mapping of additional specified areas are proposed under this subcomponent, as are detailed land use, housing, and consumer surveys. This will lead to development of land use and urban housing databases to identify areas available for development. These actions are vital for both urban development and consumer records of water supply and sanitation.

e. Project Implementation Assistance (Subcomponent 3(e)) 19. The project implementation assistance component will comprise various types of consulting services, including project implementation support to the PMU for infrastructure design, construction supervision, community development, and institutional strengthening.

f. Incremental Administration Support (Subcomponent 3(f)) 20. Incremental administrative support for project implementation is required for the PMU, which, headed by a project director, will be responsible for coordination among RT, RDA, and WASA for planning and management of project activities. The PMU will include eight professional staff, representing different disciplines, and administrative support staff.

D. Special Features

21. Following the Southern Punjab Basic Urban Services Project, this is the second ADB-supported investment project in urban development to make concerted efforts to align its scope and focus, and institutional and financing modalities, with the new governance structure under PLGO 2001. The Project supports the PG and CDR authorities for adoption of arrangements envisaged under PLGO 2001. The Project has a number of special features with respect to devolution and collateral policy actions. The project design seeks to ensure that execution arrangements do not compromise the devolved authorities of the CDR. Project implementation follows the spirit of PLGO 2001, shifting from vertical to horizontal programming. It offers particular assistance to the transition from programs that are vertical and province-driven to programs that the CDR (through WASA and RT) should carry out autonomously.

22. In the past, a top-down approach was used in project preparation but the Project was designed in close collaboration with the CDR, beneficiaries, and NGOs at the grassroots level. In addition to extensive meetings in the field with these groups, three consultative workshops were organized at the inception, interim, and final stages of the PPTA. In the final workshop, all stakeholders endorsed the proposed scope and implementation arrangements of the Project, which confirms that the project scope is strictly in line with the urgent need for improved environmental and basic urban services.

II. COST ESTIMATES AND FINANCING PLAN

A. Cost Estimates

23. The total cost of the Project is estimated at $85.7 million equivalent (including taxes and duties), comprising $12.5 million equivalent (14.6%) in foreign exchange costs (including $1.1 million in interest charges during construction) and $73.2 million equivalent (85.4%) in local currency costs. Table 1 summarizes the estimated costs, and the detailed cost estimates are in Table 2.

Table 1: Cost Estimates by Component ($ million)

Item Foreign Exchange Local Currency Total Cost A. Base Costa 1. Environmental Sanitation 7.7 35.8 43.5 2. Water Supply Services 2.2 6.6 8.8 3. Institutional Development 0.1 0.4 0.5 4. Project Implementation Support a. Consultancy Services 0.6 3.5 4.1 b. Equipment and Vehicles 0.1 0.2 0.3 c. Incremental Administrative Support 0.0 0.8 0.8 5. Land Acquisition and Compensation 0.0 9.0 9.0 6. Taxes and Duties 0.0 9.4 9.4 Subtotal (A) 10.7 65.7 76.4 B. Contingencies 1. Physical 0.3 2.0 2.3 2. Price Contingenciesb 0.4 5.5 5.9 Subtotal (B) 0.7 7.5 8.2 C. Interest During Constructionc 1.1 0.0 1.1 Total Cost 12.5 73.2 85.7 Percent 14.6% 85.4% 100%

a 2005 prices. Physical contingencies have been taken as 3% of base cost. b Price contingencies have been calculated using the real inflation rate of 4.05% and 1.80% per year of project cost. c Interest during construction has been worked out on the basis of an interest rate of 1% per year. Source: ADB estimates.

6 Table 2: Detailed Cost Estimates ($ Million)

Foreign Local Total Item Exchange Currency Cost A. Civil Works 1. Environmental Sanitation a. Sewerage Network 0.41 5.79 6.20 b. Sewage Treatment Plant (i) Sewage treatment plant 1.02 9.41 10.43 (ii) Outfall sewer 2.14 14.81 16.95 c. Storm Water Drainage (i) City drains 0.00 1.66 1.66 (ii) Lai Nullah improvement 0.00 0.84 0.84 d. Solid Waste Management (i) Landfill site 0.00 0.05 0.05 (ii) Transfer station 0.00 0.17 0.17 e. Slaughterhouse and Toilets (i) Slaughterhouse 0.00 0.25 0.25 (ii) Public toilets 0.00 0.08 0.08 2. Water Supply Services a. Repair of WWI and II 0.00 0.36 0.36 b. Provision of Water Supply 0.90 4.52 5.42 c. Activation of OHR 0.00 0.52 0.52 d. Environmental Mitigation of Rawal Lake 0.00 0.51 0.51 e. Installation of Water Meters 0.00 0.42 0.42 3. Institutional Development a. Sub-office and Complaint Office 0.09 0.36 0.45 Subtotal (A) 4.56 39.75 44.31 B. Equipment and Material 1. Environmental Sanitation a. Sewerage Network 0.42 0.18 0.60 b. Sewage Treatment Plant (i) Sewage treatment plant 0.68 0.17 0.85 (ii) Outfall sewer tunneling 2.45 0.73 3.18 c. Solid Waste Management (i) Equipment and vehicles 0.44 1.53 1.97 (ii) Transfer station 0.08 0.08 0.15 d. Slaughterhouse and Toilets 0.09 0.00 0.09 2. Water Supply Services a. Repair of WWI and II 0.00 0.17 0.17 b. Provision of Water Supply 0.16 0.12 0.28 c. Supply of Water Meters 1.16 0.00 1.16 3. Institutional Development 0.04 0.09 0.13 Subtotal (B) 5.52 3.06 8.58 C. Project Implementation Support 1. Consultancy Services 0.55 3.52 4.07 2. Equipment and Vehicles 0.12 0.16 0.28 3. Incremental Administrative Support (PMU) 0.00 0.85 0.85 Subtotal (C) 0.67 4.53 5.20 Land Acquisition and Compensation 0.00 9.00 9.00 Taxes and Duties 0.00 9.37 9.37 Total Base Cost (A+B+C) 10.75 65.71 76.46 Physical Contingencies 0.32 1.97 2.29 Price Contingencies 0.39 5.50 5.89 Total Contingencies 0.71 7.47 8.18 Interest During Construction 1.07 0.00 1.07 Total Cost 12.53 73.18 85.71 OHR = overhead reservoir, PMU = project management unit, WW = water works. Source: Asian Development Bank estimates.

B. Financing Plan

24. The Government has requested two loans: one of $40 million equivalent from ADB’s Special Funds resources (Asian Development Fund [ADF]) and a second of $20 million equivalent from ADB’s ordinary capital resources (OCR) to help finance the Project.

25. The ADF loan will be provided from ADB’s Special Funds resources with a 32-year term, including a grace period of 8 years, an interest rate of 1% during the grace period and 1.5% thereafter, and such other terms and conditions as are substantially in accordance with those set forth in the draft loan agreement.

26. The OCR loan of $20 million equivalent will have a 25-year term, including a grace period of 5 years, an interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.75% per annum, no front-end fee, and such other terms and conditions set forth in the draft loan agreement.

27. The ADB loans will cover the entire foreign exchange cost ($12.5 million), including interest and other charges amounting to $1.1 million, and will finance $47.5 million equivalent (64.9%) of the local currency costs. The local currency cost to be financed by ADB will cover portions of the civil works, vehicles, consulting services, project management support, and land—excluding duties and taxes.

28. ADB will provide the loan to the Islamic Republic of Pakistan, which will relend it to the PG on the same terms and conditions. The foreign exchange risk will, however, be borne by the PG, which will make the loan proceeds available to CDR as a grant. Table 3 summarizes the financing plan.

Table 3: Financing Plan ($ million)

Source Foreign Exchange Local Currency Total % ADB 12.5 47.5 60.0 70 PG 0 21.4 21.4 25 RT/WASA 0 4.3 4.3 5 Total 12.5 73.2 85.7 100 ADB = Asian Development Bank, PG = government of Punjab, RT = Rawal Town, WASA = Water and Sanitation Agency, Rawalpindi. Note: The allocation of loan proceeds in the Loan Agreement will be presented in special drawing rights (SDR) equivalent of $40 million and $20 million, with reference only to total expenditure, in accordance with Cost Sharing and Eligibility of Expenditures for Asian Development Bank Financing: A New Approach. Source: ADB estimates.

8 C. Allocation and Withdrawal of Loan Proceeds

29. The allocation and percentage of financing for each category of goods, services and other items to be financed out of the proceeds of the loans are in Tables 4 and 5.

Table 4: Allocation and Withdrawal of Loan Proceeds [Loan 2211-PAK(SF)]

CATEGORY PERCENTAGE OF ADB FINANCING Amount Allocated Basis for Withdrawal Number Item SDR Percentage from the Loan Account

1 1. Civil Works 21,772,000 74.1* percent of total expenditure

2 2. Equipments and Materials 3,702,000 100* percent of total expenditure 3. Consultants 1,435,000 100 percent of total expenditure 4. Incremental Administration 444,000 100* percent of total expenditure 3 Costs 5. Interest Charge 374,000 100 percent of amounts due

Total 27,727,000 1 The civil works referred to in this Table shall be the civil works to be procured under subcomponents 1(a)(b)(c) and (d). 2 The equipments and materials referred to in this Table shall be the equipments and materials to be procured under subcomponents 1(a) and 1(b). 3 Incremental administration costs shall be withdrawn on the basis of the following percentages of each payment made for such costs during the Project implementation period: 100% in the first and second years of the Project implementation commencing from the Effective Date, 75% in the third year and 50% in the fourth and fifth year. *) exclusive of local taxes and duties, which are assumed at 15%.

Table 5: Allocation and Withdrawal of Loan Proceeds (Loan 2212-PAK)

CATEGORY PERCENTAGE OF ADB FINANCING Amount Allocated Basis for Withdrawal Number Item US$ Percentage from the Loan Account

1 1. Civil Works 8,090,000 87.5* percent of total expenditure

2 2. Equipments and Materials 4,880,000 100* percent of total expenditure 3. Consultants 2,000,000 100 percent of total expenditure

4. Land 4,500,000 50 percent of total expenditure

5. Interest Charge 530,000 100 percent of amounts due

Total 20,000,000 1 The civil works referred to in this Table shall be the civil works to be procured under subcomponents 1(e), 2 and 3. 2 The equipments and materials referred to in this Table shall be the equipments and materials to be procured under the Project, other than subcomponents 1(a) and 1(b). *) exclusive of local taxes and duties, which are assumed at 15%.

III. IMPLEMENTATION ARRANGEMENTS

A. Executing Agency (EA) and Implementing Agencies (IAs)

30. The EA and IAs are as follows:

Executing Agency ¾ City District Rawalpindi (CDR)

Implementing Agencies (IAs) ¾ Water and Sanitation Agency (WASA): for the sewerage system and STP subcomponents, and improving water supply component.

¾ Rawal Town (RT): for the storm water drainage, solid waste management, slaughterhouse, and public toilets subcomponents.

¾ Rawalpindi Development Authority (RDA): for the environmental support services and urban development subcomponents.

¾ WASA and RT: joint IAs for the municipal management system development and asset management subcomponents.

B. Project Management

31. The EA will establish a Project Management Unit (PMU) headed by the project director and located at WASA. The PMU, comprising professional staff supported by a team of consultants, will:

¾ assist CDR, RT, RDA, and WASA in providing policy guidance and implementing the project components; and

¾ support monitoring and evaluation of project implementation.

The implementation framework is in Figure 1.

32. For internal coordination, two committees will be set up within 3 months of loan effectiveness: ¾ A project implementation review committee: headed by the CDR nazim (head); comprising director general of RDA, managing director of WASA, the RT and Pothar town nazims, a city district officer of CDR, and one elected female representative from the district council. This committee will review the implementation progress of all project components at least once every 3 months.

¾ A project steering committee: headed by the Chairman, Planning and Development Board, PG; comprising senior officials from P&D; Housing, Urban Development, and Public Health Engineering Department (HUD&PHED); the PG finance department; RDA; WASA; and CDR and RT nazims. This committee will be set up at P&D, PG in Lahore to ensure smooth and orderly implementation, provide policy guidance on ongoing and new government initiatives, and resolve interagency problems. The committee will meet at least once every 6 months and decisions of the meetings will be reported to ADB.

Figure 1: PROJECT IMPLEMENTATION FRAMEWORK

Nazim , CDR

DG, RDA/WASA PMU Nazim, RT

Project Director

Dy. Project Dy. Project Director Dy. Project Director (WS) (SD&SWM) Director (Finance)

AM AM AM AM AM AM Monitoring and Water Supply Solid Waste Sewerage and Finance Administration Evaluation Management Drainage

AM = assistant manager; CDR = City District Rawalpindi; DG = director general; Dy. = deputy; nazim = head of city district or a town, or tehsil, or union administration; PMU = project management unit; RDA = Rawalpindi Development Authority; RT = Rawal Town; SD&SWM = sewerage, drainage, and solid waste management; WASA = Water and Sanitation Agency (Rawalpindi). Source: Asian Development Bank staff.

IV. IMPLEMENTATION SCHEDULE

33. The Project will be implemented over 5 years and will be completed in March 2011. The implementation schedule for all project components is in Table 6.

Table 6: Project Implementation Schedule Activities 2006 2007 2008 2009 2010 2011 1. Recruitment of Consultants 2. Surveys and Detailed Designs Part A: Environmental Sanitation a. Sewerage System • Laying of trunk and area sewers • Construction of a transfer/outfall sewer to

the sewage treatment plant • Replacement of undersized sewers in

identified areas • Construction of pumping lift stations along

the transfer sewer • Environmental mitigation works upstream

of Rawal Lake filtration plant • Procurement of sewer cleaning

equipment and machinery b. Sewage Treatment Plant • Land acquisition and resettlement • Construction of rising main from Moti

Mahal pumping station • Laying of gravity sewer pipes • Construction of sewage treatment plant c. Storm Water Drainage • Remodeling existing drains • Construction of new drains • Bank protection works at critical locations

of Lai Nullah d. Solid Waste Management • Land acquisition and resettlement • Institutional strengthening • Procurement of vehicles and equipment • Construction of solid waste transfer stations and provision of garbage bins throughout the city • Development of a new sanitary landfill

site e. Slaughterhouse and Public Toilets • Rehabilitation and improvement of slaughterhouse facilities in Sihala slaughterhouse • Construction of about 15 public toilets Part B: Improving Water Supply • Replacement/rehabilitation of selected

tubewells • Construction/rehabilitation of distribution

systems • Construction of water supply and

sanitation facilities for schools Part C: Institutional Development • Municipal management system

development • Environmental support services • Asset management • Urban development Source: Asian Development Bank estimates.

V. PROCUREMENT

34. All procurement services for the Project will follow ADB's Guidelines for Procurement and the rules and regulations of the Government.

A. Civil Works

35. Contracts for civil works that are estimated to cost more than $5 million equivalent will be issued using international competitive bidding (ICB) procedures. Contracts estimated to cost $5 million equivalent or less will be carried out through local competitive bidding (LCB) procedures. Minor development and maintenance may be carried out on a force account basis.

36. The EA should seek ADB approval for substantial variations for civil works contracts prior to implementation of such works.

B. Goods

37. The procurement of goods will preferably be grouped into packages larger than $500,000 to be suitable for ICB procedures. Miscellaneous minor goods that cannot be grouped into larger contracts, and are estimated to cost less than $500,000 per contract, will be procured through international shopping (IS) procedures.

38. Certain minor items of equipment and materials, the equivalent of less than $100,000, may be procured directly from the manufacturers or their agents. Prior to such procurement, a list of individual items to be procured, an estimate of their costs, an indication of potential sources of supply and any related documents shall be submitted to ADB for approval.

39. Indicative Contract Packages are in Table 7, and the Guides and Checklists for Procurement (ICB, LCB, IS, Direct Purchase, Limited Bidding/Repeat Order, and force Account) are in Appendix 3.

Table 7: Indicative Contract Packages

Description Packages Method Amount ($ million) 1. Laying of lateral and trunk sewers in service areas of SW04, 05, and 3 LCB 2.51 06 2. Replacement of undersized sewers 1 LCB 0.40 3. Laying of trunk and area sewer connected to transfer sewer on 3 LCB 2.27 western areas 4. Laying of trunk and area sewer connected to transfer sewer on eastern 1 LCB 1.02 areas 5. Construction of transfer sewer to sewage treatment plant 3 ICB/LCB 16.95 6. Ancillary civil and E&M works for outfall trunk sewer including those for 2 LCB 3.18 500 m tunneling 7. Construction of sewage treatment plant 2 ICB/LCB 10.43 8. Supply and installation of E&M works for sewage treatment plant Multiple ICB/IS 0.85 9. Construction of city drainage works (upgrading and improvements) 3 LCB 1.66 10. Lai Nullah improvement works (strengthening of banks) 2 LCB 0.84 11. Construction of landfill site dumping stations and offices 1 LCB 0.05 12. E&M vehicles and equipment for solid waste management and transfer Multiple ICB/IS/DP 2.12 station 13. Construction of transfer station 1 LCB 0.17 14. Construction of slaughterhouse 1 LCB 0.35 15. Public toilets (15) and latrines in schools 1 LCB 0.08 16. Repair of storage tanks 1 LCB 0.40 17. Refurbishment and repair of 32 tubewells and replacement of 29 2 LCB 1.12 tubewells 18. Replacement of old leaking primary and secondary lines 5 LCB 3.62 19. Laying of pipelines in underserved inner city 1 LCB 0.44 20. Water supply in unserved and underserved areas 2 LCB 1.05 21. Equipment for water supply Multiple IS/DP 0.13 22. Supply of 50,000 water meters Multiple ICB/IS 1.16 23. Installation of water meters 1 LCB 0.41 24. Rawal lake catchment pollution mitigation civil works 2 LCB 0.51 25. Construction of complaint cells 1 LCB 0.41 26. Laying of pipelines for activating overhead reservoirs and ancillaries 1 LCB 0.52 27. Training WASA personnel in financial and assets management 1 LCB 0.13 28. Surveys Multiple LCB 0.11 29. Supply vehicles for PMU 2 LCB 0.24 30. Supply computers, printers, and other office equipment Multiple LCB/DP 0.03 31. Provide consultancy services for PMU (package A) 1 a 3.26 32. Provide consultancy services for PMU (package B) 1 a 0.73 33. Provide consultancy services for PMU (package C) 1 a 0.08 Total 57.23 Excluded Land Acquisition and Resettlement 9.00 Incremental Administrative Expenditures 0.85 Taxes and Duties 9.37 Grand Total 76.45 DP = direct purchase, E&M = electrical and mechanical, ICB = international competitive bidding, IS = international shopping, LCB = local competitive bidding, PMU = project management unit, SW = sewerage, WASA = Water and Sanitation Agency (Rawalpindi). a As per guidelines. Source: Asian Development Bank estimates.

14 VI. CONSULTING SERVICES

40. To support project implementation and build the long-term capacity of RT and WASA, which are responsible for the planning and delivery of urban services, 1,478 person-months of consulting services (18 international and 1,460 domestic person-months) will be provided, covering:

¾ Package A: project management and implementation support to the PMU, including subproject detailed design, construction supervision, and monitoring and evaluation (13 international and 1,152 domestic person-months);

¾ Package B: institutional development (5 international and 164 domestic person- months); and

¾ Package C: community development and participation (144 domestic person- months), which will be contracted to local NGOs and individual social mobilizers.

41. The consultants for the domestic person-months under Package A and B will be selected as firms. The selection and engagement of the firms will be in accordance with the quality-and-cost-based selection method under ADB's Guidelines on the Use of Consultants or other arrangements satisfactory to ADB for the engagement of domestic consultants. The consultants for the international person-months under the same packages will be selected as individual consultants.

42. The Package C consulting services will be contracted to individual social mobilizers or local NGOs for facilitating the implementation of the solid waste component and community mobilization for the water supply and sewerage components. The individual social mobilizers will be selected as individual consultant and the local NGOs will be selected as firms using the quality-based selection (QBS) method under ADB's Guidelines on the Use of Consultants or other arrangements satisfactory to ADB for the engagement of domestic consultants. The use of QBS under Package C is due to the specialized nature of the assignment.

43. The draft terms of reference of the consultants are in Appendix 4. Steps and guide for engagement of consulting firms are in Appendix 5.

VII. DISBURSEMENT ARRANGEMENTS

44. To facilitate financial control, disbursement categories will be established by component and by expenditure type (work, goods, and services). The PMU will prepare disbursement projections and request budget allocations for counterpart funds.

A. Imprest Account

45. CDR will establish two imprest accounts (one each for Loan 2211 and 2212) in the name of the PMU at the National Bank of Pakistan (immediately after loan effectiveness) to expedite disbursement of loan proceeds, in accordance with ADB's Loan Disbursement Handbook and detailed arrangements between the Government and ADB. Except as ADB may otherwise agree, the accounts will consist of advances based on estimates of anticipated expenditure to be incurred for a 6-month period or 10% of the loan amount, whichever is lower.

B. Statement of Expenditures

46. The ADB statement of expenditures (SOE) procedure may be used to reimburse eligible expenditures and to liquidate and replenish advances made into the imprest account for individual payment transactions not exceeding $100,000. The CDR will coordinate the timely release of funds and maintain acceptable levels of financial control.

C. Condition for Disbursement

47. No withdrawals will be made from the loan account for the execution of the outfall sewer and STP until all land and right-of-way required for these subcomponents are acquired and involuntary resettlement is carried out in accordance with the updated resettlement plan agreed upon between the Government and ADB, the Government’s land acquisition and resettlement laws and regulations, and ADB’s Policy on Involuntary Resettlement, 1995.

D. Issuance of PCSS Numbers

48. Before a disbursement is made for any contract issued by the EA, ADB has to prepare a Procurement Contract Summary Sheet (PCSS). Copies of all signed contracts and supporting documents should be sent to ADB as soon as they are available. This is a basis for ADB to monitor performance against the projected annual activities made at the start of each year. A PCSS number will be assigned by ADB for each contract received and these data will be relayed to EA. The PCSS serves as an acknowledgment by ADB that the award of a contract has been checked and has been found to comply with ADB’s procurement guidelines. It also serves as a basis for disbursement. The PCSS is also numbered sequentially, not exceeding four digits, i.e. 0001, 0002, etc. The PCSS consists of following basic information:

¾ ADB Contract No. or the PCSS No. ¾ Date of ADB approval of the Award of Contract ¾ Date of Contract Approval by the EA ¾ Mode of Procurement ¾ Name and address of contractor or supplier ¾ Country of Origin of the Goods/Services ¾ Amount of Contract ¾ Terms of payment and currency of contract ¾ Component to which the expenditures will be charged

49. Without the PCSS, ADB’s Controller's Department would not proceed with the processing of payment for the W/A. When an amendment or a variation of a contract is made, a copy of the variation order should also be sent to ADB, for updating of the PCSS. To avoid delay in the processing of W/As, the PCSS No. should be indicated in the W/A to be submitted by the EA. The PCSS No. should be shown in the summary sheet.

E. Advice of Withdrawals

50. Advice of withdrawals and other loan disbursement information is available at the Controller’s Department website: http://lfis.adb.org.

VIII. ACCOUNTING, AUDITING, AND REPORTING

A. Accounting and Auditing

51. The CDR, acting through the PMU, will maintain records and accounts adequate to identify works, goods, and services financed by the loan proceeds. Specifically, the CDR will:

¾ maintain separate accounts for the Project;

¾ ensure that project accounts and financial statements are audited annually in accordance with sound accounting principles by independent auditors acceptable to ADB; and

¾ submit to ADB, not later than 6 months after the close of each fiscal year, certified copies of audited accounts and financial statements and the auditor’s report on them. Furthermore, unaudited financial statements will be provided to ADB not later than 6 months following the end of the fiscal year.

52. Audit of the project accounts will include an audit of the use of the imprest account and SOE procedures, and the annual audit report will have a separate audit opinion on the use of these procedures. Summary of ADB’s auditing requirements are in Appendix 6.

B. Reporting

53. The PMU will prepare monthly progress reports, be submitted to ADB by the end of the first week of the following month, in a format acceptable to ADB, with information on:

¾ progress made against established targets, including pre-identified monitoring indicators;

¾ delays and problems encountered, and actions taken to resolve them;

¾ work carried out by the consultants;

¾ updated results of water quality monitoring and action taken on problems encountered;

¾ progress made on PPMS;

¾ compliance with loan covenants;

¾ proposed program of activities for the next month; and (viii) progress expected during the next 3 months.

54. The progress report is an executive summary of the detailed reports; with format and content permitting ADB staff to readily capture key information for inputting into the project performance report (PPR), the main tool for monitoring project implementation performance within ADB. A proforma of the progress report is in Appendix 7. The PPR is in Appendix 8.

55. Within 3 months of physical completion of the Project, the CDR will prepare and submit to ADB a project completion report on the execution of the Project, including costs and compliance with the loan covenants.

18 IX. PROJECT PERFORMANCE MONITORING AND EVALUATION

A. Performance Monitoring and Evaluation 56. A short list of verifiable performance indicators for monitoring and evaluation was prepared in accordance with ADB's Project Performance Management System (Appendix 9) during the PPTA. The PG, CDR, and PMU will ensure that comprehensive PPMS is established within 9 months of loan effectiveness and maintained to monitor and evaluate the technical performance and social and economic benefits of the Project, especially for the poor and for women. The performance monitoring indicators and procedures will be tested with respect to data availability and other constraints, revised if necessary, and institutionalized as part of the Project’s MIS. The PMU will be responsible for establishing the PPMS, and monitoring and assessment of the performance of subprojects at 6-month intervals. To measure the Project’s impact on beneficiaries, particularly low-income groups, baseline information established during the PPTA will be updated at the beginning of implementation of each project component. This information will be the basis for determining the resulting impacts. Indicators that can be monitored will comprise:

¾ institutional development indicators, covering revenue generation, financial management, and O&M;

¾ subproject implementation indicators for the various categories and types of urban infrastructure, including levels of coverage and service delivery; and

¾ sectoral impact indicators, covering economic growth, public health, and community participation. The CDR will continue to update and forward to ADB the PPMS and MIS at 6 month intervals for at least 3 years after project completion. In addition, following the water audit, a civil society task force will be established to monitor implementation of the Government Policy (Appendix 2).

B. Review

57. The Project will be reviewed jointly by the EA and ADB semiannually to assess progress and will undergo a more comprehensive review at midterm. Taking into account the PPMS results, the midterm review will:

¾ evaluate the project’s scope, design, and implementation arrangements;

¾ evaluate the progress of the institutional reform and infrastructure development components;

¾ identify changes needed in any or all of the above areas;

¾ assess the implementation performance against agreed targets in the project framework;

¾ identify critical issues and constraints, if any; and

¾ recommend adjustments to the project design and/or implementation arrangements, if necessary.

X. ASSURANCES/LOAN COVENANTS

58. The Government, the PG and the CDR have given the following specific assurances, in addition to the standard assurances, which have been incorporated in the legal documents. (i) PG policy for water supply and sanitation, solid waste management, and urban development (Appendix 2) will be implemented and updated within one year of loan effectiveness following the water services survey to be undertaken within 6 months after loan effectiveness.

(ii) PG and CDR will ensure the implementation of a tariff revision in accordance with the tariff plan, agreed during phase-1 project.

(iii) PG and CDR will privatize the operation of the water tankers (bouzers) to the private sector through a fair and transparent mechanism to ensure that such operation will be undertaken by the most qualified and efficient private operator.

(iv) PG and CDR will ensure that the solid waste collection presently managed by the RT will be devolved to UAs within 6 months after loan effectiveness. Such devolution will be followed by the proper allocation of resources to the UAs.

(v) The Government and PG acknowledge that ADB, consistent with its commitment to good governance, accountability and transparency, reserves the right to conduct audits (including nonfinancial procurement audits) of any possible financial or management impropriety in the conduct of the Project. The Government, PG and CDR will cooperate fully with any such audit and will extend all necessary assistance, including access to relevant books, records and personnel.

(vi) The Government will update the environmental impact assessment (EIA), the summary environmental impact assessment (SEIA) (Appendix 10), and environmental management plans (EMPs) based on detailed engineering design. The EA will submit the revised EIA, SEIA, and EMPs to ADB for review and approval prior to award of any civil works contracts.

(vii) The PG will ensure that the design, construction, operation and implementation of all project facilities is carried out in accordance with the EIA agreed upon between the Government and ADB, and complies with the Government’s environmental laws and regulations, and ADB’s Environment Policy, 2002 and Environmental Assessment Guidelines, 2003. Any adverse environmental impacts arising from the construction, operation and implementation of the project facilities will be minimized by implementing the EMPs and associated monitoring plans, and PG will implement all mitigation and monitoring measures specified in the EIA and SEIA. Project implementation will include consultation with local communities on environmental issues and all necessary environmental clearances will be obtained from the Punjab Environmental Protection Department for all applicable components prior to starting any construction activities. The Government will ensure environmental requirements will be incorporated in bidding documents and civil works contracts.

20 (viii) The Government will update the draft resettlement plan (RP) based on final detailed design. The Government will submit the revised RP to ADB for review and approval prior to award of any related civil works contracts.

(ix) The Government will ensure that all land and right-of-way required for the Project are made available in a timely manner, adequate compensations are provided prior to the signing of relevant civil works contracts, and involuntary resettlement is carried out in accordance with the updated resettlement plan agreed upon between the Government and ADB, the Government’s land acquisition and resettlement laws and regulations, and ADB’s Policy on Involuntary Resettlement 1995.

(x) PG and CDR will ensure that no civil contracts will be awarded over the Mouza Losar landfill site until outstanding complaints regarding compensation for the purchase of the site have been redressed in accordance with (a) the updated resettlement plan agreed upon between the PG and ADB, (b) the Government’s land acquisition and resettlement laws and regulations, and (c) ADB’s Policy on Involuntary Resettlement, 1995.

(xi) The Government will ensure that the Project will not negatively impact on vulnerable groups and be carried out in accordance with ADB’s Policy on Indigenous Peoples, 1998 and Policy on Gender and Development, 2003.

(xii) PG and CDR will carry out a comprehensive organization development program for RT and WASA commencing within 6 months after loan effectiveness.

(xiii) The PG will ensure that adequate budgetary allocations of required counterpart funds are made and released in a timely manner to CDR.

59. The major loan covenants are found in the covenants section of the Project Performance Report (Appendix 8).

XI. ANTICORRUPTION

60. ADB’s Anticorruption Policy was explained to and discussed with the Government and PG. Consistent with its commitment to good governance, accountability and transparency, ADB reserves the right to investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive or coercive practices relating to the Project. To support these efforts, relevant provisions of ADB’s Anticorruption Policy are included in the Loan Regulations and the bidding documents for the Project. In particular, all contracts financed by ADB in connection with the Project shall include provisions specifying the right of ADB to audit and examine the records and accounts of the EA and all contractors, suppliers, consultants, and other service providers as they relate to the Project.

61. The ADB Office of the General Auditor is the point of contact to report allegations of fraud and corruption among ADB-financed projects or its staff. Within that office, the Anticorruption Unit is responsible for dealing with all matters related to allegations of fraud and corruption. Please refer to the ADB’s Anticorruption Policy Handbook. Anyone coming across evidence of corruption associated with the Project may contact the Anticorruption Unit, as follows:

Integrity Division Office of the General Auditor Asian Development Bank 6 ADB Avenue, Mandaluyong City 0401 Metro Manila, Philippines

Telephone : (632) 6325004 Facsimile : (632) 2152 Email : [email protected] (check on this)

22 Appendix 1

BENEFITS AND BENEFICIARIES

Project Component Benefits Beneficiaries

Water Supply Services Piped Water & Sanitation in Schools 200,000 schoolchildren Improved Health and Hygiene Education.

Piped water for first time. 100,000 people in informal settlements.

500,000 people who source Cost recovery tariffs with Sustainable piped water supply water from RWASA good metering, billing and connections. collection.

Sewerage Primary health and aesthetic benefits 190,000 people in developed and Sewage Treatment from environmental improvements. areas

Farmers use treated effluent for 5,000 farmers families.. agriculture fertilizer.

Public Toilets Convenience especially for women. 100,000 people.

Solid waste management Hygiene improvements and reduction of 500,000 people in informal improvements including disease. settlements. collection transfer and disposal. Less incidence of flooding.

Slaughterhouse Improved environmental conditions in the neighborhood, for the animals and 5000 people the workers.

Improved livelihood for farmers 50,000 farmers families

Stormwater Drainage People living in low lying areas not 10,000 families in informal subject to flooding settlements.

Appendix 2 23

II. GOVERNMENT POLICY

Water and Sanitation Objectives Water Supply and Sanitation Policy (i) Piped water supply services and Rawalpindi Water and Sanitation Agency (WASA) will be staffed with adequate sanitation for all people in competent trained management and employees committed on a long- Rawalpindi maintained in a sustainable term basis to providing services to the public. WASA management will manner through sound financial and human be given autonomy to manage and operate the water supply and resources management. sanitation services without outside interference. WASA shall publish for the public an annual report on its operations and development each year. A structured and systematic program of organization development will be implemented for WASA. (ii) Long-term planning and development of • The long-term goal is that tariffs will cover the operation and water resources for water supply purposes maintenance (O&M) costs plus capital costs plus debt servicing for all water supply, and the O&M costs of all sewerage. WASA will meet O&M costs for water supply and sanitation through enhancement of collection efficiency and increase in tariffs as per already agreed tariff plan, which require not to impose the tariff beyond the affordability of the consumers and increase it gradually with increase in the level of service. WASA will become a self-sustainable organization. Collection efficiency of tariffs must exceed 80% by March 2006 and non-revenue water should decrease from the existing estimated 40% to less than 15% by September 2006. Disconnections for nonpayment, presently enforced, will be further strengthened. WASA has computerized its revenue and accounting system and computerized bills are being issued to the consumers. Privatization of billing and collection will be introduced to improve the revenues and the billing will be conducted on a monthly basis. All complaint offices will be functional and WASA will maintain a management information system (MIS) to record and monitor the status of registered complaints. • Operation of delivering and selling water through the bouzers, currently facing financial loss shall be privatized by June 2006. Standposts shall be provided at identified locations and the O&M of these posts shall be handed over to the union administrations (UAs). • Rawalpindi Development Authority (RDA) on 15 March 2004 reduced the water connection fee from PRs1,500 to PRs500 for domestic consumers and from PRs3,500 to PRs1,500 for commercial consumers, effective 20 March 2004. This step helped to expand the consumer network and reduce the illegal connections. (iii) Conservation of water • All water supply services will be metered and payment for water use will be made on the basis of the volume consumed. No flat rate tariffs will be allowed. The tariff structure will reflect government policies on water conservation and lifeline rates for the urban poor. These reforms will be fully implemented by end of 2007. • Installation of water meters is in progress and out of 19,000 domestic and commercial meters procured under phase-I project, 10,000 water meters have already been installed. WASA has started billing on meter reading for metered supply. However, all the connections will be completed on procurement and installation of another 50,000 meters under the proposed project. • Non-revenue water, which includes both physical and commercial losses, shall be measured and reduced progressively each year. • WASA is making all efforts to minimize non-revenue water and this will be reduced to less than 15% by September 2006. (iv) Equitable access to and use of water • Service levels shall, wherever possible, be a household connection. If this is not possible, it shall be no less than a standpipe within 100 meters of any dwelling. Increase in service connections will be closely monitored and reported to the public each year. • Every school in Rawalpindi shall be provided adequate piped water supplies and toilets (latrines). Public toilets maintained by user charges shall be constructed in all high density public locations.

24 Appendix 2

(v) Awareness of the public and • A comprehensive water audit will be undertaken in 2005 to verify government about the facts of water supply coverage, examine the way all people get water, how much they get, services in Rawalpindi. and how much they pay; and to explore the use of non-revenue water. After analysis, the findings of this audit will be discussed at a stakeholder consultation and this will be the basis for formulation of new government policy. This will be conducted under the proposed Project. • Community awareness and community development will be promoted through WASA. It is already holding regular meetings with nazims and naib nazims of the union councils (UCs). However, in the future, NGOs will be involved to promote community awareness. Print and electronic media are also being used for this purpose. (vi) Sustainable use of groundwater All groundwater use other than that for one household shall be registered as to owner, type of installation, location, volume extracted, and use of water. (vii) Optimum utilization of sewerage • The sewerage connection fee will be reduced from the existing network PRs500 to PRs250 as an incentive to encourage consumers. • Prior to laying any new sewer in any UA, the communities will sign a memo of understanding with the project management unit (PMU), where a 50% connection fee will be collected by the UAs in advance and PMU will commence the work in those UAs where at least 80% of people have deposited the connection fee to their UAs. • Payment of Recurrent Sewerage Charges will be added to the water supply bill. Failure to pay the water and sewerage bill may then result in disconnection of the water supply. • Those connecting to the sewerage will no longer pay for the cost of periodic desludging of their septic tank or latrine. • Civil society and community-based organizations (CBOs) would be involved in the monitoring and reporting regarding the O&M of sewers. Solid Waste Management Solid Waste Management Policy Objectives are 100% collection and • Introduce public-private partnerships for collection. UCs, with the disposal of solid waste in Rawalpindi; and help of experienced nongovernment organizations (NGOs), CBOs and the cost of solid waste collection and private partners, will collect solid waste in their respective disposal be borne by the creator of the constituencies and dispose of it at designated transfer stations. RT, waste with the assistance of private agencies, will be responsible for final disposal of solid waste at the landfill. Long-term objective is to maintain efficient • Develop a new landfill site with transfer stations. solid waste management in a sustainable • Full cost recovery for solid waste management. manner through sound financial and human • Introduce sorting and recycling of materials. resources management • Rawal Town (RT) will be staffed with competent trained management and employees committed on a long-term basis to providing services to the public. • RT management will be given autonomy to manage without outside interference. • RT shall publish for the public an annual report on its operations and development each year. • A structured and systematic program of organization development will be implemented for RT. Urban Development Objectives Urban Development Policy Preparation, approval, and implementation • Implement land use planning and zoning. of land use plans, including adequate open • This will also include the base mapping/GIS system and areas, parks, playgrounds, and graveyards manual/standard operating procedures with legal backup of each category. • Coordinate infrastructure and services development. • Introduce public asset management. • Target housing and services for the poor. Source(s): {Please provide source(s) here.}

Appendix 2 25

A. Eligibility Criteria of Rawal Town

62. Complying with the Punjab Local Government Ordinance, 2001 (PLGO 2001), Rawal Town (RT) will take following outstanding actions to become eligible to use the project funds for its respective subcomponents of storm water drainage, solid waste management and slaughterhouse:

63. Requirements of the Punjab Local Government Ordinance, 2001 (PLGO 2001) for elections and conduct of business of Monitoring and House Committees are met.

64. The Tehsil Council Secretariat is strengthened with required staff and equipment, and as per PLGO 2001, budget provisions are made for its functioning.

65. Organization of Offices. (i) RT office and chief officer (CO) units are to be organized in accordance with PLGO 2001 requirements and the TMA rules of business. (ii) Where required, suitably qualified and trained engineering and technical staff will be provided to the CO units for provision of municipal services. (iii) All staff will be suitably designated to meet their specific job responsibilities and job descriptions.

66. An executive committee, as required under the TMA rules of business, is to be established.

67. Transfer of Functions. RT to hold discussions and prepare action plans for the transfer of functions to the union administration as per PLGO 2001.

68. Citizen Community Boards (CCBs). The RT will observe requirements of PLGO 2001 for providing 25% of the development budget for CCB projects, and the recently developed rules for registration of CCBs should be widely disseminated for public awareness.

69. Details of documents and other information to be made available to the public will be prepared, along with procedures for dissemination of the information, and how it can be obtained from RT.

70. Revenue-Enhancement Measures. A baseline survey will be initiated to determine revenue potentials of items such as licensing, parking stands, and transport stands. A program will be developed for conducting regular surveys to keep the revenue database updated.

71. Arrears. Budget rules regarding arrears will be complied with. All arrears will be detailed in the budget format, and reasons for non-recovery of arrears will be given.

26 Appendix 3

GUIDE AND CHECKLISTS FOR PROCUREMENT

I. INTERNATIONAL COMPETITIVE BIDDING (ICB)

A. Introduction

1. International competitive bidding (ICB) is the normally required mode of procurement under ADB loans. This provides an executing agency (EA) with a wide choice in selecting the best bid from competing suppliers and contractors. It gives prospective bidders from eligible source countries equal opportunity to bid on goods and related services or works that are being procured under ADB loans. The flow chart in pages 6 and 7 shows the main steps for procurement under ICB.

2. The EA must follow ADB’s Guidelines for Procurement and procedures in preparing prequalification, bidding, and contract documents; advertising bid invitations; and accepting, opening, and evaluating bids. In addition, draft prequalification and bidding documents, bid evaluation reports, and proposed awards of contract are subject to prior approval by ADB.

B. Price Thresholds for International Competitive Bidding

3. ICB procedures must be followed for any contract with an estimated value that exceeds the threshold values set for local competitive bidding (LCB) or international shopping (IS). The threshold values are normally stated in the Loan Agreement.

C. Type and Size of Contracts

4. Whenever possible, procurement should be such that each bid package or contract is large enough to attract ICB. The size and scope of individual contracts will depend on the size, nature, and location of the project. The objective is to divide the requirements of the project into a manageable number of appropriate contract packages that will produce the maximum competitive response from bidders. To do this, the nature and value of goods being grouped into each contract package, and the conditions of the potential market of supply, must be understood. Contract packaging is normally concluded during project processing by agreement between the EA and ADB, and the contract packages and modes of procurement are included in the report and recommendation of the President (RRP).

5. Each contract includes only goods of the same or related specialty. For projects requiring both civil works and supply and installation of equipment, separate contracts are normally awarded for these items. When a large, complex contract is to be undertaken, a turnkey contract should be considered. Sometimes, however, a project may comprise several components of similar works, where the works are located in areas far from each other. An example of this would be the construction of irrigation canals in different parts of the country. In this case, although the nature of the work is similar, the works can be awarded as separate contracts because of the distance between the construction sites.

6. Contract size must also be considered. International suppliers and contractors are unlikely to be interested in competing for small contracts, so where feasible, each bid package or contract is to be large enough to attract international competition.

7. For similar but separate construction works or items of equipment, bids are to be invited under alternative contract options so contractors or suppliers (both small and large) can bid for

Appendix 3 27 individual sections of the contract or for a group of similar goods. Bids and combinations of bids are evaluated simultaneously to determine the most advantageous offer. The method of evaluation and award of contract must be clearly stated in the bidding documents.

D. Turnkey Contracts

8. Turnkey contracts are those under which the engineering, design, supply of equipment, and the construction and commencement of operation of a complete plant are provided through a single contract.

9. Sometimes the EA itself prefers to undertake part of the works of a turnkey contract. This usually comprises simple civil works, certain local manufacturing and assembly, or installation and similar labor intensive works. Such contracts are referred to as semiturnkey contracts. Under such contracts the major part of the works, equipment, plant and machinery, and engineering are provided by the main turnkey contractor. ADB discourages this practice because of the split of the responsibility between the EA and the main contractor.

E. Bidding Procedures

10. ADB has adopted four bidding procedures from which the EA may select to suit the procurement: single-stage, one-envelope; single-stage, two-envelope; two-stage, two-envelope; and two-stage biddings. Choosing the appropriate bidding procedure will depend on the complexity of the contract and the circumstances surrounding procurement.

1. Single-Stage, One-Envelope Bidding Procedure

11. For this procedure, bidders submit the price proposal and the technical proposal in one envelope. These envelopes are opened in public on the date and at the time designated in the bidding documents. The bids are evaluated, and following ADB approval, the contract is awarded to the bidder who submitted the lowest evaluated substantially responsive bid.

2. Single-Stage, Two-Envelope Bidding Procedure

12. For this procedure, bidders submit two sealed envelopes simultaneously, one containing the technical proposal and the other the price proposal.

¾ Initially, only the technical proposals are opened on the date and at the time advised in the bidding documents. The price proposals remain sealed and are held in custody by the EA. The technical proposals are evaluated by the EA and cannot be amended or changed. The objective is to allow the EA to evaluate the technical proposals without referring to price. Bids that do not conform to the specified requirements may be rejected, with ADB’s approval, as deficient bids.

¾ Following ADB’s approval of the technical evaluation, and on the date and at the time advised by the EA, the price proposals of the technically responsive bidders are opened in public. The price proposals of the technically responsive bidders are evaluated, and following approval by ADB, the contract is awarded to the bidder who submitted the lowest evaluated substantially responsive bid.

3. Two-Stage, Two-Envelope Bidding Procedure

13. For this procedure, bidders submit two sealed envelopes simultaneously, one containing the technical proposal and the other the price proposal

28 Appendix 3

¾ Initially, only the technical proposals are opened on the date and at the time advised in the bidding documents. The price proposals remain sealed and are held in custody by the EA. The technical proposals are evaluated, and if the EA requires any amendments or changes they are discussed with the bidders, and all bidders are advised in writing by the EA of the changes required. The objective is to ensure that all technical proposals conform to the same acceptable technical standard and meet the EA's technical requirements. Bids of bidders who are unable or not prepared to amend their technical bids to conform to the final technical standard required by the EA may be rejected, with ADB approval, as deficient bids

¾ Following ADB’s approval of the evaluation of technical proposals, the bidders who meet the qualifying criteria are invited to submit revised technical proposals and supplementary price proposals. The supplementary price proposals must only contain changes in price resulting from changes in the technical proposals. Supplementary price proposals that contain changes other than those discussed during technical evaluation may result in rejection of the bids.

¾ The original and supplementary price proposals, and the revised technical proposals, are opened in public on the date and at the time advised by the EA. They are evaluated, and following ADB approval, the contract is awarded to the bidder who submitted the lowest evaluated substantially responsive bid.

4. Two-Stage Bidding Procedure

14. For this procedure, bidders first submit their technical proposals, in accordance with the specifications, but without prices:

¾ The technical proposals are opened on the date and at the time advised in the bidding documents. The EA evaluates the technical proposals and discusses them with the bidders. Any deficiencies, extraneous provisions, and unsatisfactory technical features are discussed with the bidders, and all bidders are advised in writing by the EA of the changes required. The bidders who meet the qualification criteria are invited to revise or adjust their technical proposals to meet the EA's technical requirements. The objective is to ensure that all technical proposals conform to the same acceptable technical standard and meet the EA's technical requirements. Bids of bidders who are unable or not prepared to amend their technical bids to conform to the technical standard required by the EA may be rejected, with ADB approval, as deficient bids.

¾ After ADB approves the evaluation of technical proposals, the second stage is to invite bidders who meet the qualification criteria to submit revised technical proposals and price proposals that are opened in public on a date and time designated by the EA. In setting the date, the EA is to allow time for bidders to prepare revised technical proposals and price proposals. The revised technical proposals and price proposals are evaluated and, following ADB’s approval, the contract is awarded to the lowest evaluated substantially responsive bidder.

5. Overview

15. The single-stage, one envelope bidding procedure is the main bidding procedure and is used in most procurement financed by ADB.

Appendix 3 29

¾ The single-stage, two-envelope bidding procedure allows bids to be evaluated initially on purely technical and commercial grounds without reference to price.

¾ The two-stage, two-envelope bidding procedure is used for large and complex contracts and for procurement where alternative technical proposals are possible, such as for certain types of machinery, equipment, or manufacturing plant.

¾ The two-stage bidding procedure may be adopted for large and complex contracts where technically unequal proposals are likely to be encountered or where the EA is aware of its options in the market, but for a given set of performance requirements, two or more equally acceptable technical solutions are available to the EA.

F. Invitation, Submission, and Opening of Bids

1. Introduction

16. To promote ICB as the preferred mode for procurement of goods and related services or works, the EA is informed of the following procedures for inviting, submitting, and opening bids.

2. Invitation for Bids and Bidding Documents

17. Three copies of the invitation for bids and all related bidding documents for ICB (including instructions to bidders, conditions of contract, specifications, and bid forms) must be submitted to ADB for approval and reach ADB at least 21 days prior to the proposed date for issuing bidding documents. This allows a specific notice to be published in the internet version of the ADB Business Opportunities (ADBBO), and review of draft bidding documents in ADB. EAs must use ADB’s appropriate standard bidding documents (SBDs). Modifying or departing from the SBDs for country-specific or project-specific conditions must be

¾ minimal and consistent with the Guidelines for Procurement; ¾ subject to ADB approval; and ¾ introduced only through bid data sheets, and the special conditions of contract and conditions of particular application.

Where ADB has not issued relevant SBDs, the EA must use similar internationally recognized bidding documents acceptable to ADB.

3. Issuing the Invitation for Bids

18. As soon as the invitation for bids is advertised in accordance with the Guidelines for Procurement, ADB is to be given a report on the advertising. Such a report must include

¾ the name of the newspaper in which the invitation for bid was advertised, ¾ the date of advertising, and ¾ a copy of the published newspaper advertisement.

19. For ICB procurement, invitations for bids require a minimum bidding periods of 60 days for supply contracts and 90 days for civil works and turnkey projects. These periods are counted from the publication date of the relevant invitation in the Business Opportunities section of

30 Appendix 3 adb.org, or a local English newspaper, or the date when prequalification documents are available for issue, whichever is the latest, up to the date for submission of bids.

20. The date, hour, and place for the latest delivery of the bids are to be clearly stipulated in the invitation. The manner for submitting bids must also be specified, and besides allowing for submission in person, delivery of bids by registered mail will similarly be acceptable and stated in the instructions to bidders.

4. Opening of Bids

21. Bids delivered after the deadline for submission are to be returned unopened.

22. Bids must be opened in public on the date and at the time and place stipulated in the documents. The name of each bidder and, where applicable, the total amount of its bid, discounts, bid security, and other important information are to be read aloud and recorded. All the aforementioned information is to be included in the record of the opening of bids, together with the names of the representatives present.

G. Examination and Evaluation of Bids and Award of Contracts

1. Examination and Evaluation of Bids

23. The examination and evaluation of bids must be consistent with the method, terms, and conditions set forth in the bid documents and follow the procedures set out in the Guidelines for Procurement.

2. Proposal for Award

24. As soon as the bids are evaluated and the EA has determined the lowest evaluated bid, the evaluation results and the proposal for award of contract must be approved by ADB before a contract is awarded or a letter of intent is issued. For this, promptly after the bid evaluation but at least 30 days prior to expiration of bid validity, ADB must be given three copies of

¾ an account of the public opening of the bids (together with the minutes of bid opening), ¾ a summary and detailed evaluation of the bids, ¾ the proposal for award (together with the consultants' recommendations, where applicable), ¾ a draft contract if such a draft differs from the draft previously approved by ADB, and ¾ an appropriate certificate of eligibility for the proposed contract.

For single-stage (two-envelope), two-stage (two-envelope), and two-stage bidding procedures, ADB's approval of the evaluation results of each envelope are to be obtained before the results are communicated to the bidders and prior to opening the second envelope or proceeding to the second stage.

3. Award of Contract

25. If the contract proposed to be executed differs substantially from the draft approved by ADB or if any substantial amendment to the contract is proposed, the proposed changes are to be submitted to ADB for prior approval. Promptly after each contract is awarded, ADB is to be given three copies of the contract as executed.

Appendix 3 31

32 Appendix 3

Appendix 3 33

II. LOCAL COMPETITIVE BIDDING

A. Introduction

72. International competitive bidding (ICB) is the normally required mode for procuring ADB- financed goods and related services, or works. However, other methods may sometimes be more appropriate. An alternative, exception is local competitive bidding (LCB) within the borrowing developing member country (DMC). Foreign bidders from other ADB member countries have the right to bid under ADB-funded LCB. LCB may be more economical than ICB as it normally requires less time and simpler bidding documents, as well as shorter prequalification and bidding periods. LCB also supports one of ADB's objectives: promoting domestic manufacturing and construction industries in the DMCs. The flow chart in page 10 shows the main steps for procurement under LCB.

B. Criteria for Allocating Contract Packages for LCB

73. LCB may be considered only if ADB is satisfied with four items:

¾ foreign contractors and suppliers are not likely to be interested in bidding; ¾ local production or construction facilities are available at reasonable cost and are adequate for prompt delivery; ¾ domestic procurement procedures are satisfactory to ADB; and ¾ the borrower requested use of LCB.

Moreover, LCB may be considered for contracts comprising the following conditions:

¾ small value; ¾ consist of a series of small-value works; ¾ located in several areas that may be far apart in the borrowing DMC; and ¾ to be executed at different times.

C. Evaluating LCB Procedures

74. While local procedures need not be identical to ADB's ICB procedures, they must provide adequate competition to ensure reasonable prices and must not conflict with the basic principles underlying ADB’s Guidelines for Procurement. Evaluating bids and contract awards must be fair, and evaluation criteria must be made known to all bidders. Factors to be considered when evaluating LCB procedures of an EA are briefly described in pages 11 and 12.

D. Treatment of Foreign Bidders under LCB

75. Contractors from all member countries are entitled to apply for prequalification or to bid for contracts under LCB. ADB requires the borrowing DMC to permit such participation, but foreign bidders must adhere to local procedures acceptable to ADB, including using the local language and paying in local currency, if required by the bidding documents. Under LCB, the delivered cost of materials including import duties and other taxes may be used when comparing bids. ADB's domestic preference policy does not apply to LCB.

E. International Advertising of LCB

34 Appendix 3

76. Bidding of LCB contracts estimated at $500,000 or more for goods and related services or $1,000,000 or more for civil works is advertised concurrently with the general procurement notices in the Business Opportunities section of adb.org. Prequalification, if used for LCB contracts, is similarly advertised.

F. Using Standard Bidding Documents for LCB

77. Borrowers are to be encouraged to use ADB-approved standard bidding documents for LCB. This will help ensure high quality and consistency in the documents and will hasten ADB's review. The documents must reflect local procurement requirements and be acceptable to ADB by not contravening the basic principles underlying the Guidelines for Procurement. If standard bidding documents acceptable to ADB are not yet available in borrowing DMCs, ADB may provide assistance to help develop them. Once prepared and approved, the use of standard bidding documents will be mandatory for all ADB-financed LCB contracts in the DMC (as for ADB-funded ICB contracts).

G. ADB Review of LCB Bidding Documents

78. For each project, the first draft English language version of the bidding documents should be submitted for ADB prior review and approval regardless of the estimated contract amount. The approved LCB bidding documents should be used as a model for the same project. Prior review will not be required for subsequent LCB procurement on the same project, where the contract value is estimated at less than $10 million.

H. Approval of Bid Evaluation Report and Contract Award for LCB

79. ADB will review the bid evaluation report (BER) and award of contract on a post-facto basis. The EA must submit copies of the BER and signed contract in English to the concerned sector division or resident mission for post review as soon as possible following contract award. ADB reserves the right to refuse financing for the contract if it is found during post review that the procurement has not been conducted in accordance with the Guidelines, or other provisions specified in the loan agreement. The concerned sector division may, however, agree with the EA to conduct prior review of the BER and to give prior approval for contract award. This would depend on the borrower’s procurement capacity and should be described in the project documentation. Notwithstanding the above, if the procurement requires consideration of the procurement committee, the EA must not award contract prior to the committee’s deliberations and subsequent ADB approval.

I. ADB Financing of LCB Contracts

80. Under ADB's uniform financing policy, when a local bidder wins a contract under ICB, ADB financing covers the ex-factory price of locally manufactured products (excluding taxes and duties on the finished product, but including import duties on raw materials and components). Similarly, ADB financing of LCB excludes taxes and duties imposed on civil works contractors.

Appendix 3 35

36 Appendix 3

Evaluating LCB Procedures

While LCB procedures do not need to be identical with the ADB's ICB procedures, the basic objectives of the latter such as economy, efficiency, transparency, and equal and fair opportunity for all eligible bidders must be met. The following checklist helps evaluate the procedures.

A. Eligibility

All qualified local bidders are eligible. For foreign bidders see para. 4 in the main text.

B. Advertising

LCB contracts estimated to cost $500,000 or more for goods and related services and $1,000,000 or more for civil works will be advertised in the Business Opportunities section of adb.org concurrently with the general procurement notice. Advertising in the local language in local newspapers is acceptable.

C. Bidding Period

This could be shorter than for ICB; 30 days is acceptable.

D. Prequalification

Prequalification is discouraged for contracts bid following LCB. Where used, an individual prequalification exercise is acceptable for each contract as is the use of a registration system (or approved standing list) of contractors based on criteria such as experience, financial capacity, and technical capacity. However, foreign bidders from eligible member countries must be allowed to obtain such registration and to bid without unreasonable cost or additional requirements.

E. Bidding

Bids can be made in the local language, restricted to local banks for bid and performance security, and limited to local currency for bidding and payment. Specifications are to be unambiguous; international standards are not required. A copy of the bidding documents must be made available in English to ADB for review.

The use of standard bidding documents is encouraged. Once ADB accepts the documents they must be used for all subsequent ADB-funded LCB in the DMC in all sectors.

Public bid opening and recording of bids is mandatory.

Two-stage bidding procedures are acceptable for eliminating nonresponsive bidders before opening price proposals.

Bracketing and lottery systems are not acceptable to ADB, nor is publishing the estimated values of the contracts.

The use of multiple-delivery places for bids and bid opening is unacceptable.

Appendix 3 37

Bids should not be invited on the basis of a percentage premium or discount over the estimated cost.

Bids should not be rejected only on the basis of a comparison with the EA’s estimate.

Extension of bid validity may be sought only under exceptional circumstances.

Factors, evaluation methodology, and evaluation criteria must be explicitly stated in bidding documents and applied consistently; and the contract award must be to the bidder who submitted the lowest evaluated substantially responsive bid.

Price negotiations with bidders before signing contracts is not acceptable, except when all bids received are substantially higher than the estimate and ADB gives prior approval to negotiate with the bidder who submitted the lowest evaluated substantially responsive bid for a price reduction, before resorting to rebidding.

F. Domestic Preference

ADB's domestic preference policy or any other domestic preference policies are not applicable under LCB. When foreign bidders participate, comparison will be on the delivered price including import duties and taxes.

G. Restrictions

Restrictions on the sources of transportation and insurance are acceptable.

H. Contract

Price adjustments for inflation, and settlement of disputes by local courts or local arbitration, are acceptable.

III. INTERNATIONAL SHOPPING

1. International shopping (IS) is employed where the estimated contract amount is not large enough to interest foreign suppliers and contractors through the ICB process. Normally, IS is permitted for contracts estimated at up to a maximum value of $1,000,000. For IS procurement, the executing agency (EA)

¾ advertises the notice inviting bids in a local English language newspaper, if practicable, with a bidding period of 30 days; ¾ issues written invitations to bid, providing clear technical specifications for the required goods and related services or works, and the terms and conditions of purchase, to at least three bidders representing more than one member country of ADB (member country for this purpose refers to the country of origin of the goods and not to the bidder’s nationality; therefore, quotations may be solicited from authorized local agents of foreign manufacturers); ¾ adopts the procedures for public bid opening; and ¾ evaluates the bids in the same way as for ICB.

2. Unless otherwise indicated in the loan agreement, ADB's review will generally occur after the award of the contract (but before authorizing disbursement) when the EA sends

38 Appendix 3

¾ the withdrawal application; ¾ copies of the signed contract; ¾ the bidding documents; ¾ details of bid opening procedures, including minutes of bid opening; ¾ the bid evaluation report; ¾ the results of the evaluation; and ¾ a certificate of eligibility of the contract where required by ADB.

3. These steps ensure fairness and transparency. ADB reserves the right to refuse to finance the contract in case of misprocurement. ADB, therefore, discourages the system of prior award of contract by the EA and after the fact approval by ADB unless the EA has sufficient funds to finance the contract if ADB declares misprocurement.

4. IS may also be appropriate if items needed are available only from a limited number of suppliers, or early delivery is of paramount importance for certain works under the project. Here, by the MRM, adopting IS (regardless of the amount involved) may be authorized, if it is fully justified and the requirements are identified during project processing.

Appendix 3 39

40 Appendix 3

IV. DIRECT PURCHASE, NEGOTIATION, OR SINGLE BID

1. Direct purchase, negotiation, or single bid involving particular manufacturers, suppliers, or contractors is allowed by ADB in any of the following circumstances:

¾ when buying small or off-the-shelf items valued at less than $100,000; ¾ when standardization is important, and equipment and spare parts needed to expand or repair existing equipment must be procured from the original supplier or from a supplier of identical goods; ¾ when the equipment or goods is proprietary and obtainable only from one supplier; ¾ when critical items are to be procured from specialist suppliers; and ¾ when the civil works are a natural extension of an earlier or ongoing job, or when engaging the same contractor is shown to be more economical and ensures compatibility of work quality.

In all these cases, ADB must be satisfied that the prices to be paid are reasonable and that competitive bidding offers no advantage.

2. Direct purchase for standardization is justifiable if the original equipment is suitable and outweighs the possible advantages of having another make of equipment and an alternative supplier. Similarly, in direct negotiation for extension of civil works, the following must be shown:

¾ the original contract was awarded following ICB, IS, or LCB procedures acceptable to ADB; ¾ the unit rates of the earlier contract, were updated in accordance with the provisions in the original contract to reflect any increase or decrease in the cost of construction, and were valid and reasonable; ¾ the contractor's performance has been satisfactory; and ¾ the additional work would be unlikely to result in lower prices if subjected to bidding.

3. If a number of distributors stock the same parts and are free to compete for their supply, then proprietary parts must be purchased through competitive bidding.

V. LIMITED BIDDING OR REPEAT ORDER

1. Additional items may be procured through limited bidding when more of the same items procured earlier through ICB are urgently needed, loan funds are available, and no advantage can be gained through competitive bidding. Under this procedure, bids may be invited only from those who submitted responsive bids for the earlier advertisement, or if many bidders originally responded, from the five original lowest responsive bidders, with a bidding period of 30 days.

2. In exceptional cases, when few bidders originally responded and the lowest evaluated bid was superior (in price, reliability of equipment, availability of spare parts and after-sales service, and delivery period) the additional items required may be procured by a repeat order with that bidder. This is if

¾ the repeat order follows shortly after the earlier order, ¾ no better offer is likely, and ¾ the unit price for the repeat order is not more than the original unit price.

Appendix 3 41

The repeat order is to follow within 18 months of the earlier order, and the additional quantities are not to exceed 30 percent of the original quantities. A repeat order may also be made when the EA, with ADB's agreement, provides an option to order additional items in the original contract documents.

VI. FORCE ACCOUNT

1. Execution of works by force account (departmental workforces) means undertaking works using the resources of a public agency of the EA’s government without competitive bidding or negotiated contracts. Use of force account is on an exceptional basis and must be fully justified at the MRM and, if approved, in the RRP.

2. Force account is employed when the size of the works and its location make it unsuitable to adopt competitive bidding (this may include work such as village wells and village access roads, minor irrigation works, and other small and remote scattered works). Force account may also be used in other special cases where local contractors do not express interest in undertaking the works or where force account can be demonstrated to be the most efficient and effective method of implementation.

3. In agreeing to the use of force account, ADB must be satisfied that the construction facilities are efficient and the EA is capable (with advisers' or consultants' assistance) of undertaking the works quickly and to the required quality, at reasonable cost.

42 Appendix 4

TERMS OF REFERENCE FOR CONSULTING SERVICES

I. OVERVIEW

1. Consulting services for the Project will be provided in three separate packages: Package A for Engineering Services (including Construction Supervision) to assist the Project Management Unit (PMU) in implementing the Project; Package B for Institutional Development to build long term capacity of the Rawalpindi Water and Sanitation Agency (WASA) and Rawal Town (RT); and Package C for NGOs/social mobilizing teams to assist in the process of establishing government-community partnerships.

2. A total of 16 person-months input of international consultants and 1,453 person-months of domestic consultants will be required as well as an input of 48 person-months from NGOs

i. Table 4.1: Summary of Consulting Services

Input (person-months) Consultancy Packages International Domestic NGOs 13 314 Package A. Engineering Services to PMU Construction Supervision - 838 - Subtotal (A) 13 1152 - Package B. Institutional Development 5 164 - Package C. Social Mobilization - - 144 Total Input 18 1316 144

3. Package A will include project management and implementation support to the PMU, including subproject-detailed design, construction supervision, and monitoring and evaluation. Package B will include Institutional development, urban planning, asset management, and financial analysis; and under Package C, NGOs and social moblizers will be engaged. The selection and engagement of all consulting services to be financed under the Project will be in accordance with the QCBS method of ADB's Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers, or other arrangements satisfactory to ADB for engagement of domestic consultants

II. TERMS OF REFERENCE FOR PACKAGE A—ENGINEERING CONSULTING SERVICES

Objectives

4. The objectives of the engineering consulting services are to assist the Project Management Unit (PMU), RDA, WASA and RT in project coordination, facilitation of public participation, carrying out studies, conducting surveys and investigations, preparing engineering designs, plans, specifications and contract documentation, undertaking bid evaluation, construction supervision of the Project work, monitoring and evaluation and preparing a project

Appendix 4 43 for the next phase of expansion of water supply, sewerage, drainage services and provision of solid waste management facilities in Rawalpindi. The consultancy will be procured by contracting domestic consulting firms.

Scope of Services

5. The scope of engineering consulting services will consist of detailed design, construction documentation, evaluation of contractor’s bids and construction supervision for: ¾ Laying of sewerage network in different parts of the city. ¾ Construction of transfer sewer to the proposed sewage treatment plant. ¾ Construction of sewage treatment plant. ¾ Construction/remodeling of city drains and Lai Nullah improvement works. ¾ Development of solid waste landfill site, dumping stations and office. ¾ Construction of solid waste transfer station. ¾ Design and construction of slaughterhouse. ¾ Design and construction of public toilets in the city and latrines in schools ¾ Repair of existing reinforced concrete water storage tanks. ¾ Laying of water distribution lines in the city and sub-urban areas. ¾ Refurbishment of 32 and replacement of 29 contaminated tubewells. ¾ Design and civil works for pollution mitigation and silt control of Rawal Lake. ¾ Design and construction of sub offices and complaint offices for WASA/RT. ¾ Procurement of vehicles and equipment for PMU, WASA and RT. ¾ Procurement and installation of water meters.

6. Carrying out Studies and recommending appropriate remedial measures for:

¾ Monitoring and evaluation of the project performance. ¾ Unaccounted for water. ¾ Hydrogeological study of known underground water resources, to define the program for tubewell replacement and to establish a monitoring program. ¾ Groundwater mathematical modeling. ¾ Tubewells performance evaluation. ¾ Water and sanitation audit. ¾ Feasibility study and detailed design for Chirah and Daducha Dam. ¾ Feasibility study of civil works proposed for pollution control and silt mitigation of Rawal Lake. ¾ Water quality monitoring to prepare program and procedure for regular monitoring by WASA of water quality of all sources. ¾ Leakage detection study.

44 Appendix 4

Preparation of Phase III Project:

7. Based on the development carried out in Phase-I and II develop the next phase project for water supply, sewerage, drainage and solid waste management for Rawalpindi.

Specific Tasks

8. Specific tasks for design and construction supervision will include, but will not necessarily be limited to the following: ¾ Prepare detailed designs, plans, specifications and contract documents conforming to the Bank’s guidelines for various components of the Project. ¾ Prepare detailed cost estimate broken down into direct foreign exchange, indirect foreign exchange and local costs. ¾ Assist PMU to carry out bid evaluation in accordance with the Bank’s guidelines. ¾ Carry out construction supervision of all works that are part of the Project; prepare progress payment certificates, including final payment certificates, and present them to the PMU for payment; and prepare project cost records as required: ¾ Provide technical advice on the strengthening of WASA’s control program in respect of leak detection, meter servicing and operator training. ¾ Provide technical assistance to WASA for establishing a detailed recording system for plans, specifications, technical data, operation and maintenance records; and performance monitoring, including provision of computer software. ¾ Develop in consultation with WASA detailed procedures and criteria for establishing a project performance monitoring system (PPMS) in accordance with Bank guidelines, assist WASA in obtaining baseline data for PPMS reporting and assist in training WASA staff to prepare BME reports. ¾ Consult with local residents, and affected persons of transfer sewer and sewage treatment plant, and Non Government Organizations (NGOs) to assess the environmental impacts of the Project. Identify all negative impacts, and determine corrective measures to be incorporated in design of Project works.

9. Specific tasks for the Sewerage System will include, but will not necessarily be limited to: ¾ Review of existing sewerage studies/designs and background data including operation of existing sewerage facilities ¾ Preparation of a base plan at a scale of at least 1: 1000 showing topographic features, urban development and future planning area, extent and details of existing sewers and location of major sewage discharges; ¾ Review of the projections of the average dry weather sewage flow, peak dry weather flow and peak wet weather flow, biochemical oxygen demand (BOD) and other relevant parameters for the sewage treatment plant up to the year 2025, including the areas of the eastern part of the Cantonment. ¾ Survey the site of the proposed treatment plant and review the treatment proposals made in the final report of the Bank’s Technical Assistance (TA 4098 PAK), Rawalpindi Environmental Improvement Project, completed in April 2004. Examine the potential for use of treated water and sullage in agriculture around the plant.

Appendix 4 45

¾ Review the PPTA proposals for the transfer sewer and the sewage treatment plant with regard to their capacities to ensure that both also cater for the transfer and treatment of sewage generated from the eastern part of the Cantonment, together with the city sewage, to the year 2025. [Construction of the sewage treatment plant in the Phase-II Project may however be limited to the components to cater for the requirements till the year 2015]. ¾ Update the sewerage master plan including implementation schedule for Phase III Project and estimates of costs to provide the basis for progressive development of sewerage for Rawalpindi and to guide future town planning decisions.

10. Specific tasks for Drainage will include but will not necessarily be limited to: ¾ Review of all available surveys, data and design including the existing utilities- water, sewerage, gas and telephone. ¾ Establish hydrological parameters for urban drainage of Rawalpindi. ¾ Review the design parameters of the Drainage Master Plan.

11. Specific tasks for Solid Waste Management (SWM) will include but will not necessarily be limited to: ¾ Review of existing operational, institutional and financial arrangements of the RT’s SWM system. ¾ Conduct field survey to establish sources and type of solid waste, composition and generation rates as per agreed random sampling, covering the entire Project Area. ¾ Update waste generation, service level and demand forecasts for the collection, transportation and disposal of waste for consideration of private sector participation in certain (or entire) areas/fields of SWM System. ¾ Review the existing available collection, transportation and disposal plant/equipment and its operations, in particular the reliability/maintainability and conditions of the hydraulic equipment. ¾ Review existing ancillary facilities, such as plant and equipment maintenance workshop and parking lots. Propose upgrading of ancillary facilities and estimate probable expenditures. ¾ In consultation with RT, prepare designs and/or specifications, cost estimates and tendering program for procurement of additional plant and equipment for collection and disposal, suggesting appropriate technology, imported or indigenous as considered suitable. ¾ Assist RT in the engineering, tendering and financial approvals of contractor’s bids. ¾ Asses possibility of recycling of waste material at proposed Transfer Station(s). ¾ In consultation with the RT prepare a plan for efficient operation of the Solid Waste Transfer Station. ¾ Study the operation of the existing landfill site in relation to its location, life, its cost effectiveness and its impact on the environment. ¾ Examine options in consultation with the client for co-operation in the construction and operation of the site with the Rawalpindi Cantonment Board (RCB) and any other interested organization or NGOs.

46 Appendix 4

¾ Study prevailing practice for the collection of recycleable material. Establish a training program for the scavengers. Prepare policy and considerations for issuing licensing and registration of scavengers. ¾ Develop and assist in implementing a program of training for the landfill operators at all landfills used by the RT. ¾ Assist the RT in selection of alternate landfill sites for the future considering the environmental and resettlement impacts in view of the cost-effectiveness and availability of land. ¾ In consultation with relevant private sector agencies, NGOs and CBOs, conduct technical and financial feasibility studies for the possible use of generated solid waste for the following three solid waste options. ¾ Recycling ¾ Composting and co-generation ¾ Lane level collection, and disposal

12. Specific tasks for the Hydrogeological Study will include, but will not necessarily be limited to: ¾ Collection and review of available hydrogeological data ¾ Collection and review of details of existing wells and tubewells, including their location, depth and extraction rates. ¾ Quantification of the discharge rate, with assessment of the rates and periods of extraction. ¾ Prediction of the effect of increased extraction or changes in usage patterns and location of the sustainable yield and quality of supply: ¾ Site selection and preparation of a program for the replacement of 29 tubewells. ¾ Preparation of a monitoring program, from which the potential long term development of the resource can be assessed. ¾ Specific tasks for Rawal Lake Catchment works will include, but will not necessarily be limited to: ¾ Preparation of a detailed feasibility for implementation of specific civil works proposed in the “Rawal Lake Catchment Management Study” conducted during the Phase 1 Project, for mitigation of pollution and control of silt entering the Lake, that can be undertaken with the funds allotted. ¾ Preparation of detailed design, tender documents and implementation of these works

13. Specific tasks for the Tubewells Performance Evaluation study will include but will not necessarily be limited to technical evaluation of the performance of the existing WASA tubewells and the possibility of replacement through carrying out well performance tests. The assessment will be used to help identify additional groundwater resources which seem presently unexploited because of poor performance of a significant number of existing WASA tubewells. The water supply may be augmented through an improved tubewells network.

14. Specific tasks for the Ground Water Computer Modeling will include preparation of a water balance including assessment of the recharge potential in the existing aquifer in and around Rawalpindi including water rich areas like the National Park. The study will look at the

Appendix 4 47 withdrawal from the aquifer and outline recommendations for the future exploitation of the groundwater aquifer & drilling of tubewells in the Rawalpindi Area.

15. Specific task for feasibility studies for construction of the Storage Dam (Daducha or Chirah), Raw Water Main and Water Treatment Plant will include but will not necessarily be limited to: ¾ Review of the geological, hydrological, structural, seismic, environmental and all other relevant aspects of the Chirah/Daducha Dams including an EIA (Environmental Impact Assessment) according to the ADB Guidelines. ¾ Preliminary design of the most economical and feasible option including all allied components. ¾ Preliminary design of the raw water conductance main from Chirah Dam, outlet to the water treatment plant with allied works located at Rawal Lake Filtration Plant and or new Conductance Main & Treatment Plant for Daducha Dam. ¾ Preliminary design of Rapid Gravity Filtration Plant of required capacity including intake structure, clarifiers, rapid gravity filters with back washing system, control valves and flow measurement arrangements, chemical dosing, chlorination, standby power, electrical/mechanical works, etc complete in all respects. ¾ Preliminary design of service reservoirs and other related works.

16. Specific tasks for Preparation of Phase-III Project for future development of water supply, sewerage, drainage and solid waste management in Rawalpindi will include, but will not necessarily be limited to: ¾ Using the previously prepared PPTA, determine the scope, priorities and cost estimates of the works to be included in Phase-III of water supply, sewerage, drainage improvements and solid waste management, taking into account the funding limit for Phase-III of the Project. ¾ In consultation with local residents and NGOs, assess the socio-economic benefits, carry out an initial environmental examination and set up procedures for benefit monitoring and evaluation of the Phase-III works in accordance with Bank guidelines. ¾ Carryout financial analysis of the proposed Phase-III project, including the calculation of financial internal rate of return.

Input

17. The design and construction program is planned to continue for five years. Design and construction supervision and other associated works including the studies will require a team of well qualified engineering consultants with inputs of about 13 person-months of international expertise and 416 person-months of local expertise in addition to 849 person-months of domestic consultants for construction supervision. Professionals with expertise and experience in large sewerage projects involving treatment, groundwater development, water distribution and solid waste management will be required. Various disciplines of engineering are involved, including civil, mechanical, electrical, chemical and computer engineering.

18. In order to maximize on-the-job training, all design work will be carried out at Rawalpindi unless it is clearly not feasible to do so, in which case the design work may be carried out in the consultant’s home office or in the office of the sub-consultants.

48 Appendix 4

Reports

19. The following documents and reports in the English language are required with regard to detailed design and construction supervision, operation and maintenance and next phase of development. ¾ Design reports on Sewage Treatment Plant (STP) and requirements of STP identifying the most appropriate sewage treatment option; transfer sewer; extension of the sewerage system; drainage works; solid waste transfer station and landfill site; dumping stations, public toilets, slaughterhouse, tubewell rehabilitation and replacement and extension of the water supply network. ¾ A report on the hydrogeological study, presenting a program for tubewells development and setting out a groundwater monitoring program. ¾ A report describing the procedures and criteria for project benefit monitoring and evaluation (BME) and provision of assistance to PMU in WASA in the preparation of BME reports and quarterly progress reports. ¾ Operation and maintenance manuals of the concerned Project Works like STP, pump stations, tubewells, pumps etc. ¾ Reports presenting advice on the strengthening of WASA’s control program in respect of leak detection, unaccounted for water, water quality monitoring, meter servicing, operator training and establishment of a recording system and water distribution and sewerage network plan at the minimum scale of 1:1000; ¾ A comprehensive report on the next phase development of water supply, sewerage, drainage and solid waste management including project scope, cost, estimates, implementation arrangements, financial justification and social and environmental implications. ¾ Reports on the surveys and studies carried out under the Project including the water and sanitation audit, the analysis of its results and the stakeholder consultation.

Submissions

20. The consultants will be required to submit to the client in addition to the electronic file copy, the following hard copy reports concerning the Project implementation work, in accordance with their respective time frame:- ¾ Inception Report 5 copies ¾ Design Report for each proposed work 5 copies ¾ Study/Survey Reports 10 copies ¾ Tender Documents including all technical specifications, drawings, special conditions, bills of quantities and cost estimates 10 copies ¾ Bid Evaluation Reports 5 copies ¾ Monthly Progress Reports 10 copies ¾ Quarterly Progress Reports 10 copies ¾ Project Completion Report along with: 10 copies ¾ Four bound sets of “As Built” Drawings on A1 size.

Appendix 4 49

¾ One set of “ As Built” Drawings on sepias. ¾ One set of diskettes/CD containing all “As Built Drawings”. ¾ Two sets of O&M manuals. ¾ Two sets of final agreed and certified measurements. ¾ Two sets of Construction Progress Photographs in Albums. ¾ Project Preparation Report for Phase-III 10 copies

Assignment Period

21. The contract period for this assignment is 60 months. Schedule of input of all the consultants is illustrated in Tables 4.2 and 4.3.

50 Appendix 4

Table 4.2: Engineering Services (Professionals) Input (person-months) Position International Domestic a/ Team Leader/Urban Development Specialist 0 60 Water Supply Specialist 0 30 Sewerage/Sewage Treatment Specialist 6 48 Drainage Specialist 0 12 Hydrologist 0 12 Hydrogeologist 0 10 Mechanical Engineer 2 12 Electrical Engineer 0 12 Solid Waste Management Specialist 2 12 Waste Management Policy Specialist 1.5 3 Civil Engineer- Structural Specialist 0 24 Geo-Tech Engineer 0 6 Ground Water Modeling Specialist 1.5 9 Environmental Specialist 0 20 Contracts Management Specialist 0 36 Digitization – GIS Specialist 0 8 Total 13 314 a/ The international consultants will be engaged as individual consultants.

Table 4.3 - Construction Supervision Inputs (Person- Months) Expertise International Domestic Construction Specialist- CRE - 42 Resident Engineers (6 Nos) - 208 - Construction Supervisors (18 Nos) 504 Materials/Quality Assurance Engineers (2 Nos) - 72 Total - 826

Consultants’ Qualification

22. All professional personnel must have qualifying university degrees in the respective disciplines. The Team Leader must have at least twenty years of relevant professional experience. Foreign professional personnel must have at least fifteen years of relevant professional experience, including at least seven years in developing countries, and they must have the specialized experience and skills essential to the assignment. Successful previous relevant working experience in Pakistan is desirable. Local professional personnel must have at least six years of relevant working experience and must have a good command of the English language.

23. Terms of reference and respective qualification of each of the above disciplines are highlighted as follows:

Appendix 4 51

Tasks of Individual Consultants

4. Team LeaderI Urban Development Specialist (60 Person-Months)

24. The Team Leader will take the overall responsibility for the completion of all activities envisaged under the Project and submission of all reports in accordance with the Terms of Reference (TOR). He will prepare a work plan for each individual and supervise all field investigations and studies, carry out the quality assurance of all the reports submitted to the Client and co-ordinate the work of all the team members and ensure the active involvement of various stakeholders during the currency of Project. The Team Leader would ensure that the requirements of the TOR for each specialty are fulfilled and that the achieved pace/progress of work is relevant or corresponding to the time requirements. The Team Leader in this regard will fix various performance targets for the team ensuring both the progress of work and the quality of submission. The Team Leader will also represent the Team in all matters including meetings with Clients, stakeholders and Govt. representatives etc. He will prepare the Monthly Progress Reports & submit them to the Client/Govt. representatives on Schedule. He will also ensure that all the Investigations and surveys needed for the detailed design of services i.e. Water Supply, Sewerage, Sewage Treatment Plant, Stormwater Drainage and Solid Waste Management are initiated and completed in time, so that the results of the same can be properly incorporated for the preparation of the detailed design and tender documents of various services.

5. Water Supply Specialist(s) (30 Person-Months)

25. Water Supply Specialist(s) will be responsible for the detailed design of various Water Supply components of the Phase-II Project proposed under the Project including replacement of old pipelines, extension of water supply services to the new distribution areas, rehabilitation of old water tanks (Tanks I & II), installation of water meters, activation of old water supply reservoirs & preparation of a suitable strategy for mitigation of the pollution entering into the Rawal Lake.

26. The Water Supply Specialist(s) under the supervision of the Team Leader will also guide the technical feasibility of the Chirah & Daducha Dam(s) and Co-ordinate all other surveys & investigations related to the design of water supply services including topographic surveys, water quality surveys, leakage studies and public awareness complaints etc for conservation of water. The Water Supply Engineer(s) will review the overall population of Rawalpindi and make the Water Supply demand and availability projections up to year 2015/2025.

27. The detailed design of water supply services will take into account any current water supply infrastructure and will try to incorporate it (depending on age and serviceability) into the design of the new system.

28. The Water Supply Specialist(s) will also review the overall quality of water supplied to Rawalpindi based on the water quality monitoring surveys carried out under the Project/previous work done by Pakistan Council of Scientific and Industrial Research (PCSIR), Pakistan Council of Research in Water Resources (RCRWR), National Institute of Health (NIH) etc. & build suitable remedial measures into the Project component design wherever applicable.

29. The Water Supply Specialist(s) will prepare Engineering drawings, technical specifications, BOQ's and tender documents for the proposed water supply components.

52 Appendix 4

6. Sewerage/Sewage Treatment Specialist(s) (48 Person-Months Domestic, 6 Person-Months International)

30. Sewerage/Sewage Treatment Specialist(s) will be responsible for the preparation of the detailed design to be taken up under the Sewerage System component in the City including replacement of undersized sewers of Khayaban-e-Sir Syed and Satellite Town, design of pumping stations, review of the design of Phase-1 balance works (and preparing them for tendering etc), and design of transfer sewer).

31. The Sewerage/Sewage Treatment Specialist(s) will supervise all necessary investigations for the design of the proposed sewerage networks and the sewage treatment plant including but not limited to any topographic, geotechnical Investigations, surface water quality investigations and surveys.

32. The Design Report for the proposed Sewage Treatment Plant will include all mitigation measures including any resettlement, afforestation and/or flood protection measures.

33. The Sewerage/Sewage Treatment Engineers will prepare drawings, profiles, technical specifications, BOQ's and tender documents of the proposed works. For low income and poor/slum areas, the need for any special/economical designs based on community participation approach would also be considered whenever found necessary and appropriate.

7. Waste Management Policy Specialist (3 Person-Months Domestic, 1.5 Person- Months International)

34. Waste Management Policy Specialist(s) will prepare Policy Guidelines for Environmental Sanitation including but not limited to the disposal of Sewerage/Sewage treatment, Solid Waste Management, Environmental Sanitation/assessment in light of the applicable National/ International Standards and provide guidance to the respective specialists on those issues.

8. Drainage Specialist (2 Person-Months)

35. Stormwater Drainage Specialist will prepare the detailed design & tender documents, for the various packages/contracts proposed to be carried out inside the city including the new drain from Asghar Mall Road to Murree Road and the remodelling of Jamia Masjid Road Drain, Murree Road Drain, Bus Stand Drain, Nia Mohallah Drain and Eidgah Drain, etc.

36. He will also prepare the detailed design and tender documents for the lai Nullah Protection Works at its critical sections, based on a storm water return period of 25 years.

37. He will prepare the necessary design, drawings, technical specifications, BOQ's, profiles & tender documents for the proposed works.

9. Hydrologist (12 Person-Months)

38. Hydrologist will assist the Stormwater Drainage Specialist in the estimation of stormwater runoff for the design return period(s) to be utilized in the design of proposed City Drainage Works & the Lai Nullah Protection Works.

39. Hydrologist will also review the suitability of application of the Rational Method (Q&CIA), hydrograph method and the USGS method for the design of the above Project components and discuss their merit & suitability for the above mentioned works.

Appendix 4 53

40. Hydrologist will also prepare a "Hydrology Report" for the City Drainage Component and the Lai Nullah, Protection Works Component.

10. Hydrogeologist (10 Person-Months)

41. The hydrogeological expert will formulate and supervise the hydrogeological investigations in the Project Area, including the assessment of ground water potential and identification of water rich areas. He will also assist WASA in formulation of a "Ground Water Management Policy" so that the excessive withdrawals from the ground water could be checked/minimized. The Hydrogeological expert will also work closely with the Ground Water Modelling Expert in preparation of a Ground Water Model for the Project Area.

11. Groundwater Modelling Expert (9 Person-Months Domestic, 1.5 Person- Months International)

42. The Ground Water Modelling Expert will be responsible for the preparation of the Ground Water Model of the Project Area, based on the ground water investigations in the Area. This will include the preparation of water balance, assessment of present withdrawal including an inventory of private & WASA tubewells. Present overall withdrawal, potential recharge & future potential for ground water exploitation, also identification of areas for ground water exploitation on a long and short term basis, keeping in view both the quantity and quality of the ground water resource.

12. Solid Waste Engineer (12 Person-Months Domestic, 2 Person-Months International)

43. Solid Waste Engineer will prepare the design and tender documents of the proposed landfill site, transfer stations, workshops and supply of equipment etc. This will include preparation of BOQ's, technical specifications, detailed drawings and tender documents. In this respect, he will evaluate any proposals for private -public partnership and .incorporate any needed changes into the design of services.

44. Solid Waste Engineer will review all previous reports related to Solid Waste Management prepared by RT, UNDP, JICA, NGOs and other parties. Solid Waste Engineer will build in his design, any possible improvements to current practices including collection, transfer and disposal at community, primary and secondary levels.

13. Mechanical Engineer (12 Person-Months Domestic, 2 Person-Months International)

45. Mechanical Engineer will assist the Water Supply/Sewerage, Stormwater Drainage and Solid Waste Engineer in the design of any mechanical components related to the design of any tubewell machinery, pumping stations, mechanical equipment, disposal stations, sewage cleaning machinery etc. He will also prepare the technical specifications, tender drawings for the supply and/or installation of the above component packages including BOQ’s and cost estimates.

54 Appendix 4

14. Electrical Engineer (12 Person-Months)

46. Electrical Engineer will assist the Water Supply/Sewerage, Stormwater Drainage and Solid Waste Engineer in the design of any electrical equipment related to the design of any tubewell machinery, electric meters, pumping stations, electric starters/equipment, disposal stations etc.

47. He will also prepare the technical specifications, tender drawings for the preparation of above component packages including BOQ’s and cost estimates.

15. Structural Engineer (12 Person-Months)

48. Structural Engineer will prepare the detailed design, BOQ's, technical specifications and engineering drawings for any structural component of the Project including the water tanks (to be renovated) any support requirements for the proposed pipelines, proposed outfall sewer, sewage treatment plant, Landfill site, Lai Nullah Protection Works etc.

49. He will also work in close association with the Water Supply & Sewerage Engineer for a safe and appropriate design of any major water supply/sewerage pipeline foundations.

16. Geotechnical Engineer (6 Person-Months)

50. The Geotechnical Engineer will formulate and supervise all necessary Soil/Geotech Investigations envisaged under the proposed Project components, including those for any deep sewers/water pipeline installations, outfall sewer, sewage treatment plant, Lai Nullah Protection Works), landfill site and any other site of relevance.

51. He will disseminate the information/analysis obtained from the Geotech Investigations to the concerned specialists for incorporation of the results into the design of various Project components.

17. Environmental Specialist (20 Person-Months)

52. Environmental Specialists will carryout the EIA's of any Project Components as listed under the TA PAK 4098 Study or otherwise including assistance to PMU for the implementation of the Environmental Management Plan and monitoring the Project at both the Design and Implementation stage. They will ensure that the mitigation measures identified in various Project components included in the respective IEE's of the TA PAK Study/EIA are incorporated into the design of various facilities and for that purpose, they will transmit the required data/information to the concerned specialists.

53. The Environmental Impact Assessment/monitoring will be carried out according to the applicable ADB Guidelines and will also consider all social, resettlement and other relevant aspects.

18. Contracts Management Specialist (40 Person-Months)

54. The Contracts Engineer will assist the Team in formulation and preparation of the various Contract Packages keeping in view various institutional/legal and ICB/LCB requirements. He will prepare the “Special Conditions of Contract” to judiciously safeguard the interest of all stakeholders i.e. the Client, the Contractor and the workers at site, whose health ands safety safeguards will be built into the contract documents.

Appendix 4 55

CONSTRUCTION SUPERVISION

19. Chief Resident Engineer

55. The Chief Resident Engineer will be responsible for detailed construction supervision of all the Investment Works listed for the Phase-II Project, from the initiation to completion stage in the Water Supply, Sewerage/Sewage Treatment, Stormwater Drainage, Solid Waste and Urban Development Sectors including but not limited to the installation of proposed water supply distribution lines/repair of pipelines, activation of overhead reservoirs, repair of existing RCC tanks, repair and refurbishment/replacement of tubewells, laying of trunk and lateral sewers, replacement of sewer pipelines, construction of outfall sewer, construction of proposed sewage treatment plant, construction/remodeling of city drainage works, construction of proposed Landfill Site & Transfer Station and construction of Slaughter House and Public Toilets/Complaint Offices and Sub-Offices etc. He will make sure that with the help of his Resident Engineer (RE), Assistant Resident Engineers (AREs) and Supervisor/Inspectors at site, the technical specifications provided in the tender documents/tender requirements as laid out at the detailed design/tender awarding stage are fully complied at site including strict progress reporting/monitoring and conflict resolutions for all the on-going works.

56. He will provide necessary guidance/supervision to the Contractor(s), so that all works carried out at site, are of proper quality and workmanship & all necessary precautions for public safety/environmental protection are being observed by the contracting firm (The construction activity will be planned in such a way so as to cause minimum inconvenience to the public, including forward planning/co-ordination with other public sector agencies/utility departments for protection/safeguarding the existing utilities at site).

57. With the help of his supervisory staff, he will ensure a smooth running of the various construction works, bringing any unwarranted delays to the notice of concerned authorities for necessary corrective action. He will also prepare cases for variation orders, if absolutely necessary, providing necessary justifications, wherever required & process/recommend contractor’s bill for payment to the Client after getting due measurements done through his staff/workers in the field.

58. At the end of the Project, he will be responsible for final closure of the Project/submissions including submission of as built drawings etc as laid out in the Contract.

56 Appendix 4

20. Supervisory Staff

a. Resident Engineers

b. Assistant Resident Engineer

c. Supervisors/Inspectors

59. The above supervision staff will assist the Chief Resident (CRE) in the performance of his duties at different sites/works & ensuring the quality/progress of work for which a detailed Job description for each category of staff/staff member will be developed & issued by the CRE according to the type & nature of work involved.

• PACKAGE - B (INSTITUTIONAL AND URBAN DEVELOPMENT CONSULTANCY)

Objectives

60. Under the Project Institutional and Urban Development Consultancy an Urban Development Plan of the City of Rawalpindi will be prepared and assistance given to WASA, RDA and RT in the fields of municipal management, environmental support services, asset management, financial management including training of RT and WASA staff.

61. Specific tasks for provision of these services by the Consultants include but are not necessarily limited to those described under each component:-

Urban Development Plan

a. Analyze and demarcate appropriate boundaries of the proposed urban growth. The Consultants will follow the Guidelines described in the National Housing Policy and Environmental Policy for carrying out the following tasks: (1) Prepare comprehensive development plans and guidelines for Urban Expansion and Slum Improvement. (2) Formulate a zoning plan and landuse plan. (3) Formulate an Urban Design concept applicable to all areas of RT. (4) Determine appropriate urban density (high and low) in each built-up area within the operational jurisdictions of WASA/RT. (5) Determine future urban form in terms of both horizontal and vertical development of the RDA-RT area. (6) Formulate relevant regulations for urban development and expansion. (7) Formulate an Infrastructure - Services Development Plan coordinating with IESCO, SNGPL, PTCL, RT and WASA. (8) Develop plans for open spaces and areas where recreational facilities are to be provided. (9) Develop transport network, plan and a transportation plan focusing on new street lines, motorway and road linkages with a North South Highway through the proposed Ring Road.

Appendix 4 57

(10) Develop an industrial zone plan to exploit the areas directly linked with the motorways M-1 and M-2. (11) Develop a trade zones plan along the southeastern periphery of the city for sustaining city development using the motorways. (12) Prepare legislation for private sector housing development schemes. b. Prepare comprehensive urban design guidelines for high density, slum and low- income concentrated development areas to cater for the projected demand.

c. Formulate appropriate development plans based on the following articulated strategies: (1) Economic Strategy (2) Investment Strategy (3) Marketing Strategy (4) Implementation Strategy (Economic, Legal, Industrial) (5) Management Strategy (6) Development Strategy (7) Agricultural and Archaeological Conservation Strategy (8) Environmental Conservation Strategy (9) Infrastructure Development Strategy (10) Planning & Building Regulation Strategy. d. Undertake land use survey and urban housing survey to prepare a database to identify areas available for urban development. e. Develop database and GIS mapping of additional specified areas of extended WASA jurisdiction. f. Prepare Guided Development Plan showing the main trunk sewers, main highways and roads, as well as water rich areas to guide the investment in those areas that can meet the criterion of urban expansion. g. Prepare plans for slum upgrading through public – private partnership.

Institutional and Municipal Management System Development

62. Development of municipal management systems for RT and WASA, and capacity building of RDA involves: a. Comprehensive Organization Development of RT and WASA (See Reference “A Challenging Experience in Organization Development” authored by Nancy Barnes and produced by GTZ). b. Training in technical and financial management for RT and WASA staff including training for asset management; c. Increasing public awareness of urban issues, water quality, sustainability of facilities, and options for improving the delivery of urban services. d. Improving municipal financial management by introducing improved accounting procedures and management information systems that include

58 Appendix 4

budgeting, resource mobilization, enhanced O&M of assets, and improved billing, revenue collection, and reporting systems. e. Establishing regulatory systems to ensure that laws, standards, rules, and regulations are equitably and consistently applied. f. Reviewing the existing institutional and financial arrangement including organizational structures and staffing of RT and WASA to ensure sustainable operations in water supply, sewerage, drainage and solid waste management. g. Implementing a revised tariff plan that matches the financial assumptions used in appraisal of this Project. h. Assisting PMU, WASA and RT in preparation of job descriptions and staffing schedules. i. Building capacity of RT/WASA in resource mobilization through efficient collection of revenue, improved financial management including budgeting, and enhanced operations and maintenance of their assets. j. Assisting RT and WASA to establish networks that can provide a forum for the exchange of experiences, ideas, knowledge and information. k. Carrying out training needs assessment of RT and WASA and design curricula for various training programs, ensuring that training services being availed from outside are effective, and fit into the Project’s plan for institutional strengthening of WASA and RT. l. Conducting training services for capacity building of WASA and RT in revenue generation, collection, accounting and financial operations.

Asset Management

a. Review the system record maps of urban services in Rawalpindi under the charge of WASA/RDA and RT, including water supply, sewerage & drainage, storm water drainage and solid waste collection and disposal systems etc. b. Conduct baseline surveys including field investigations and surveys, physical checking/verification of above ground and below ground infrastructure to complete the system record maps of water supply, sewerage & drainage system and solid waste collection and disposal; and update the existing system record maps of WASA/RDA and RT. c. Develop asset inventories, computerized databases for all the assets of WASA/RDA and RT including land and buildings, plant, pipelines and miscellaneous items and a system to keep them continually updated. d. Provide technical assistance to WASA/RDA and RT to develop and establish an intranet, which will provide access to all users, using the same internet browser as interface for the integrated asset management system. e. Develop and implement an integrated asset management and decision support system in WASA/RDA and RT designed to make available online asset records, analysis tools and system maps to its users through local intranet site of WASA/RDA and RT. f. Develop asset management and data warehouse analysis tools that support all aspects of the asset management process: data collection and analysis, performance modeling, management alternatives and scenarios generation, decision analysis, and management information and reporting.

Appendix 4 59

g. Digitize the system record maps of WASA/RDA and RT, including the existing maps and the urban service maps updated through actual field surveys under the Phase-II Project, which can be incorporated into Geographic Information System (GIS). Digitization of water supply and sewerage maps for REIP was done during (TA-4098) in 2004. h. Assist WASA/RDA and RT to develop and implement a Geographic Information System (GIS) and GIS based database that can be used to characterize the condition of the multi-facility urban services and enable the asset managers to gain better understanding of infrastructure performance and keep track of the conditions, history, and pattern of assets, and use this information to generate reports and predict maintenance requirements. j. Review and enhance the capabilities of the existing Management Information System (MIS) of WASA/RDA developed under Phase-I Project, so as to fulfill the requirements of inventories database structure and become part of the integrated asset management system. k. Provide technical assistance to WASA/RDA and RT for establishing an Asset Management Section (AMS) within those organizations, which will be responsible for the development and implementation of integrated asset management system by them. l. Assist WASA/RDA and RT establish training cells under the Asset Management Section to cater for the training needs of staff of WASA/RDA and RT, including asset management; assess training needs and formulate an overall plan and training programs for both the in-house and international training of concerned staff in asset management; and provide on the job training in asset management to WASA/RDA and RT staff. Resettlement

a. Review all available documents relating to resettlement and rehabilitation including Land Acquisition and Resettlement Plan; b. Review and finalize land requirements for various sub-projects identified by the TA consultants and assist RT and WASA in demarcation and notification for acquisition. c. Demarcate boundaries and undertake physical (topographical) survey of selected sites and prepare base map(s) for each identified site at a scale of 1:1000, showing all natural and man-made features and services. d. Update the land records with respect to size of landholdings of current landowners and inheritance, and prepare final list of the affected persons for each site involving resettlement; e. Prepare list of affected homeowners and disadvantaged groups, i.e. tenant farmers, farm laborers, women headed households, etc. f. Prepare survey instruments i.e. questionnaires, checklists, etc. and undertakes baseline surveys for the (completely or partially) affected persons at each site for acquisition and resettlement and rehabilitation as per requirements of “ADB Handbook on Resettlement”.

g. Collect information on land value from different sources and assess the land acquisition cost in consultation with the affected persons;

60 Appendix 4

h. Verify the material and other assets (livelihood, etc.) going to be lost for each affected person, and assess the compensation at full replacement value. j. Coordinate with the EA/concerned agencies in framing the modality for land acquisition and in determination of the award and realizing the payment; and ensuring the completion of land acquisition process in time. k. Assess the land requirements for relocating the affected persons (APs) considering the land use and spatial standards of the EA. Evolve criteria for selection of site/sites and assist EA in the final selection of the site/sites. (Subject to willingness of the affected persons and agreement on terms and conditions with the APs). l. Prepare time schedule for land acquisition, planning and engineering design of selected site(s), execution of development works, terms and conditions for shifting at relocated site, shifting of affected persons, realization of loans for APs, etc. (subject to willingness of the affected persons and agreement on terms and conditions with the APs).

Assignment Period

63. The contract period for this assignment is 24 months. Schedule of input of all the consultants is illustrated in Table 4.4.

ii. TABLE 4.4 - PACKAGE B Institutional Development Consultant Inputs Expertise International pm Domestic pm a/ Urban Development Specialist 3 24 Institutional Development Specialist 18 Asset Management Specialist 15 MIS Data Base Specialist 18 Financial Management Specialist 18 Resettlement Specialist 12 Social Mobilizer/Gender Specialist 12 Water Quality Monitoring Specialist 8 Infrastructure Management Trainer 6 TQM Specialist 12 Municipal O&M Specialist 12 Transportation and Land Use Specialist 5 Urban Development Legal Expert 4 Total Inputs Package B 3 164 a/ The international consultants will be engaged as individual consultants.

Appendix 4 61

Consultant Qualification

64. All professional personnel must have qualifying university degrees in the respective disciplines. The Urban Development Specialist must have at least twenty years of relevant professional experience. Foreign professional personnel must have at least fifteen years of relevant professional experience, including at least seven years in developing countries, and they must have the specialized experience and skills essential to the assignment. Successful previous relevant working experience in Pakistan is desirable. Local professional personnel must have at least six years of relevant working experience and must have a good command of the English language.

65. Terms of reference of each of the above disciplines are highlighted as follows:

Tasks of Individual Consultants

21. Urban Development Specialist (24 Domestic Person-Months & 3 International Person-Months).

a. Scope of Work

66. The consultants will work closely with the Planning Section of RDA and RT and will coordinate with local communities, NGOs and community organizations. The consultants are also required to coordinate with other service providers like, IESCO, Sui GAS, PTCL, Private sector developers and various agencies working under the Govt. of Punjab (GoPb). The scope of work for the consulting assignment will include:

Analyzing and demarcating appropriate boundaries of the proposed urban growth. The Consultants would follow the Guidelines described in the National Housing Policy and Environmental Policy for carrying out the following tasks:

(i) Prepare comprehensive development plans for Urban Expansion and Slum Improvement.

¾ Formulate a zoning plan and landuse plan. .Formulate an Urban Design concept applicable to all areas of RT. ¾ Determine appropriate urban density (high and low) in each built-up area within the operational jurisdictions of WASA. ¾ Determine future urban form in terms of both Horizontal and Vertical development of the RDA- RT area. ¾ Formulate relevant regulations for urban development and expansion. ¾ Develop Urban -Environmental Guidelines in the light of National Housing and Environmental Policy. ¾ Formulate conservation guidelines for Takht Pari and Adiala Forests within RDA boundaries, special project areas and flood prone areas along Lai and Soan river ¾ Formulate an Infrastructure -Services Development Plan coordinating with RESCO, Sui Gas, PTCL, RT and WASA. ¾ Develop plans for open spaces and areas where recreational facilities are to be provided. *All Man-Months are local unless otherwise specified

62 Appendix 4

¾ Develop transport network, within the Guidelines of the Development Plan, to link public out door open areas, urban forest areas and green belts, water bodies and areas reserved for public development. ¾ Develop a transportation plan focusing on new street lines, Pakistan Motorway and road linkages. ¾ Prepare plans to link the proposed North South Highway through proposed ring roads. ¾ Develop Industrial zone to exploit the areas directly linked with the Motorways M-1 and M-2. ¾ Develop trade zones along the south-eastern periphery of the city for sustaining city development using the Motorways. ¾ Prepare legislations for private sector to develop housing and ensure proper urban building development.

(ii) Prepare comprehensive urban design guidelines for high density, slum and low- income areas; concentrated development to cater to the projected demand covering

Main urban design concept for Rawalpindi City Local Urban Design for Nodal Points within the city Local Infrastructure Plans Landscape/Streetscape/Townscape Design & Guidelines Architectural and Conservation Guidelines Traffic & Transportation Management Plans. Environmental Protection and Improvement Schemes - especially by implementing proper septic tanks construction and underground and over head water tanks within every house. Develop housing building planning & zoning and density guidelines.

(iii) Formulate appropriate development plans giving considerations to the following

Economic Strategy Investment Strategy. Marketing Strategy Implementation Strategy (Economic, Legal, Industrial) Management Strategy Development Strategy Agricultural and Archaeological Conservation Strategy Environmental Conservation Strategy Infrastructure Development Strategy Planning & building regulation strategy.

22. Institutional Development Specialist (18 Person-Months)

a. General

67. In total, 24 months of domestic consultants are required to carry out the terms of reference associated with institutional strengthening of RT, WASA and RDA. The consultancy services will be provided for the first two years of the project i.e. 2006 to 2007. A range of activities related to institutional development will be carried out related to various implementing agencies. The objectives of the consulting services are to assist PMU, WASA, RT and RDA to

Appendix 4 63 implement the Phase-II of the Project in an effective, efficient, and timely manner, and to enable those institutions to be technically, financially and self-sustaining.

b. Major Tasks

68. The major tasks associated with provision of institutional support during the Phase-II Project will be as follows:

(i) Assisting the PMU and the relevant institutions in coordinating the work of the Project design and supervision of the Project.

(ii) Facilitating effective community participation in the implementation of Sub- Projects.

(iii) Ensuring that training services contracted to outside organizations are effective, and fit within the Project's plans for strengthening WASA and RT.

(iv) Assisting PMU, WASA and RT in preparation of job descriptions and staffing schedules.

(v) Assisting the PMU and other participating institutions in monitoring and advising on the staffing and administrative improvements.

(vi) Preparing an overall benefit monitoring and evaluation (BME) system for the Phase-II Project and to ensure that the necessary independent inputs are in place when and where required.

(vii) Assisting PMU in the design, preparation, planning and management of the community participation component.

(viii) Assist the PMU in the selection of NGOs to be involved in the community participation program, prepare TORs and job descriptions; interview and brief NGOs on project objectives, and discuss proposed role of NGOs.

(ix) For efficient delivery of services, the Consultants will help RT and WASA to establish networks that can provide a forum for the exchange of experiences, ideas, knowledge and information between RDA, WASA, RT, UCs, NGOs/CBOs and the private sector. The Consultants will develop a mechanism so that the network can liaise and articulate the perspectives and concerns of the communities.

(x) Build capacity of RT/WASA in resource mobilization through efficient collection of revenue, improved financial management including budgeting and enhanced operations and maintenance of their assets.

(xi) Design detailed curricula for the various training programmes for WASA/RDA/RT

64 Appendix 4

23. Asset Management Specialist (15 Person-Months) Data Base Expert (18 Person-Months)

a. Objectives

69. The objectives of the Consultancy Service for Assets Management are to assist WASA/RDA and RT, Rawalpindi in developing and implementing an integrated Asset Management System covering all aspects of asset- management process; and to develop appropriate asset management tools and procedures for the above ground assets and the buried infrastructure which will enable optimal deployment and efficient operation and maintenance of assets, achieving effective service delivery and maximizing public profit.

b. Scope of Services

70. The Consultants will review WASA/RDA and RT's existing asset management procedures; assist WASA/RDA and RT to develop and implement an Integrated Asset Management System (IAMS) and Decision Support System (DSS) and appropriate asset management and analysis tools that cover all aspects of asset management process and provide decision makers with adequate and reliable basis for making asset-deployment decisions. The Consultancy will also study the existing system record maps and asset inventories; assist WASA/RDA and RT for updating system record maps and development of assets inventories and computerized inventories databases, including use of appropriate technology, development of appropriate computer software, review and provide technical assistance to WASA/RDA for the enhancement of the existing management information system modules.

71. The Consultancy services will also assist to establish asset management unit within WASA/RDA and RT for implementing asset management program and provide training to the concerned staff on all aspects of asset-management.

72. The Consultants will provide all the necessary technical assistance to WASA/RDA and RT for implementing the asset management program and making it fully functional within the stipulated time frame.

c. Specific Tasks

73. Specific tasks for Assets Management Consultancy will include but will not be limited to :

i) Review the system record maps of urban services in Rawalpindi under the charge of WASA/RDA and RT, including water supply, sewerage & drainage, storm water drainage and solid waste collection and disposal systems etc.

ii) Conduct baseline surveys including field investigations and surveys, physical checking and verification of above ground and below ground infrastructure to compete the system record maps of water supply, sewerage & drainage system and solidwaste collection and disposal; and update the existing system record maps of WASA/RDA and RT.

iii) Assist WASA/RDA and RT in the creation of asset inventories of all the fixed and movable assets including land and buildings, plants, pipelines and miscellaneous items.

Appendix 4 65

iv) Develop asset inventories, computerized data bases for all the assets of WASA/RDA and RT including land and buildings, plant, pipelines and miscellaneous items. v) Provide technical assistance to WASA/RDA and RT to develop and establish an intranet which will provide access to all users, using the same internet browser as interface for the integrated asset management system. vi) Develop and implement an integrated asset management and decision support system in WASA/RDA and RT which should be designed to make available online asset records, analysis tools and system maps to its users through local intranet site of WASA/RDA and RT. vii) Development of asset management and data warehouse analysis tools that support all aspects of asset management process: data collection and analysis, performance modeling, management alternatives and scenarios generation, decision analysis, and management information and reporting. viii) Digitizing the system record maps of WASA/RDA and RT, including the existing maps and the urban service maps updated through actual field surveys under the Phase-II Project, which can be incorporated into Geographic Information System (GIS). ix) Assist WASA/RDA and RT to develop and implement a Geographic Information System (GIS) and GIS based databases that can be used to characterize condition of the multi-facility urban services and enable the asset managers to gain better understanding of infrastructure performance and keep track of the conditions, history, and pattern of assets, and use this information to generate reports and predict maintenance requirements. x) Review and complete the water distribution network model of existing system developed by Phase-1 consultants. The model will be calibrated and verified, identifying and correcting any flaws/deficiencies. The Consultants will also provide training to the WASA/RDA staff in practical use of the model to enable them to optimize the operations and maintenance of the water distribution network model, achieving efficient performance and improving service delivery to the consumers. xi) Review and enhance the capabilities of the existing Management Information System (MIS) of WASA/RDA developed by the Phase- I Project Consultants, so as to fulfill the requirements of inventories database structures and become part of the integrated asset management system. xii) Provide technical assistance to WASA/RDA and RT for establishing Asset Management Unit (AMU) within those organizations, which will be responsible for the development and implementation of integrated asset management system by them. xiii) Assist WASA/RDA and RT for establishing training cells under the Asset Management Unit (AMU) to cater for the training needs of staff of WASA/RDA and RT, including asset management; assess training needs and formulate an

66 Appendix 4

overall plan and training programs for both the in-house and foreign training of concerned staff in asset management; and provide on the job training to WASA/RDA and RT staff.

d. Consultant Input

74. This assignment will be carried out by domestic consultants and will require input of a total of 18 domestic person-months for the consultancy services for asset management and 18 person-months for Data Base/MIS expert.

75. The consultants will provide input in the field of asset-management, GIS development, computer software and database development and financial analysis. The Consultants will be appropriately qualified and having relevant experience in water utilities and urban services in similar environment.

24. Financial Management Expert (18 Person-Months)

a) Investigate WASA and RT's existing accounting system, Conduct training session for capacity building of Accounting Department.

b) Introduce financial performance measures;

c) Formulate strategies for the improvement of financial operations.

d) Conduct on the job training sessions for providing clear understanding of accounting systems to concerned RT and WASA staff;

e) Assist RT in the valuation of assets turned over by RMC;

f) Introduce financial performance measures including rate of return on assets, current ratio, debt service coverage ratio and quick asset ratio;

g) In-depth Study of the existing revenue collection system of RT and WASA and propose remedial measures.

h) Review the feasibility of RT for conversion to a computerized billing system and determine the outputs for accounting purposes;

i) Investigate potentially available software and select and modify software as necessary to suit RT and WASA needs;

25. Resettlement Specialist (12 Person-Months)

76. The scope of work for the Phase II Consultants in the Resettlement Sector will consist of the following:

(a) Review all available documents relating to resettlement and rehabilitation including Land Acquisition and Resettlement Plan;

(b) Review and finalize land requirements for various Sub-Projects of Rawalpindi Environmental Improvement Project (REIP) identified by the T A consultants;

Appendix 4 67

(c) Identify, evaluate, and select new sites as per requirements of the Phase- II Project in consultation with the agencies concerned; and ascertain the resettlement effects;

(d) Coordinate with the agencies concerned to get the areas notified for land acquisition and carry out land acquisition survey (LAS);

(e) Demarcate boundaries and undertake physical (topographical) survey of selected sites and prepare base maps for each identified site at a scale of 1:1000 showing all natural features (such as agricultural lands, orchards, forests, trees, barren land with or without vegetation, rivers, nullahs, depressions, ponds, etc.), and man-made features (houses, structures by type, graveyards, boundary walls, streets and paths, vacant land, electricity lines, telephone lines, on-ground and underground public services such as water mains, trunk sewers, water supply pipelines, sewerage system, drains, etc.

(f) Prepare the list of landowners for each designated land area, by consulting different types of land revenue records (cadastral maps, records of property/ownership rights, surveys of cultivation, etc., etc.);

(g) Update the land records with respect to size of landholdings of current landowners and inheritance, and prepare final list of the affected persons for each site involving resettlement;

(h) Prepare list of affected homeowners for each site;

(i) Prepare list of the disadvantaged groups, i.e. tenant farmers, farm labourers, women headed households, etc.

(j) Prepare survey instruments i.e. questionnaires, checklists, etc. and undertake baseline surveys for the (completely or partially) affected persons at each site for acquisition. The survey should be comprehensive and cover all aspects (including tenure, income, livelihood, etc.), required for resettlement and rehabilitation as per requirements of "ADB’s Handbook on Resettlement".

(k) Collect information on land value from different sources and assess the land acquisition cost in consultation with the affected persons;

(l) Verify the material and other assets (Livelihood, etc.) going to be lost for each affected person, and assess the compensation at full replacement level;

(m) Coordinate with the concerned agencies in framing the modality for land acquisition and in determination of the award and realizing the payment; and ensuring the completion of land acquisition process;

(n) Programme the restoration of income plan for the disadvantaged persons and/or ensure their training for the construction projects;

(o) Assess the land requirements for relocating the affected persons (APs) considering the land use and spatial standards of concerned agencies. Evolve criteria for selection of site/sites and assist in the final selection of the site/sites.

68 Appendix 4

(Subject to willingness of the affected persons and agreement on terms and conditions with the APs).

(p) Prepare time schedule for land acquisition, planning and engineering design of selected site(s), execution of development works, terms and conditions for shifting at relocated site, shifting of affected persons, realization of loans for APs, etc. (subject to willingness of the affected persons and agreement on terms and conditions with the APs).

26. Training Specialist (18 Person-Months)

77. The Training Specialist will identify the training needs of the RT & WASA Staff (both Professional & Para Professional), with identification of weak areas where immediate training is required including but not limited to operation & maintenance of the water treatment plants, pumping stations landfill site and proposed sewage treatment plant Employees in operation and maintenance departments will be specially trained to create a public servant attitude and a "Prevention is better than cure" behaviour for operation of the Public Utilities. Staff at both the Rawal Lake Filtration Plant and the Sangjani Treatment Plant need to be given proper training in different plant operations.

78. The training Specialist will identify various areas of training (Managerial, Finance, Engineering, Social interaction/orientation) for both the Professional/Para- Professional Staff and advise means & ways of providing necessary means through in-house/on-the-job training and through workshops/seminars/field visits to other parallel agencies carrying out similar but efficient operations and also through other places of learning like universities and/or training schools etc.

79. He will prepare a Training Manual to be followed by both WASA and RT staff for better & efficient skill development & delivery of services.

27. Water Quality Monitoring Specialist (8 Person-Months)

80. The Water Quality Specialist will prepare a plan for monitoring the water quality of the surface and groundwater sources of Rawalpindi on a regular basis by dividing the city into various zones.

81. He will mainly focus on reinforcing the capability of WASA testing laboratory located at the Rawal Lake Filtration Plant and evaluate its shortcomings to recommend proper improvement measures to the concerned authorities. The Laboratory should be made capable of carrying out physical, chemical and bacteriological parameters in-house (and if possible) testing for metal analysis. He will train WASA Staff in various sampling/analytical techniques.

82. He will also supervise the monitoring of water quality of the City's ground and surface water sources on a regular basis.

Appendix 4 69

28. Total Quality Management Specialist (12 Person-Months)

83. The TOM Specialist will prepare the Quality Manuals (based on ISO 14000) to uplift the Quality of working of RT/WASA especially in the following fields:

Human Resource Development (HRD) Water Production Water Consumption Cost Recovery Level and Quality of Service

84. The TQM Specialist in co-ordination with the Training Specialist will review the existing situation of WASA's/RT's operations and recommend various measures for uplifting the quality of working and delivery of services for both WASA/RDA to bring them at par or close to ISO 14000 regulated organizations.

• TERMS OF REFERENCE FOR CONSULTING SERVICES PACKAGE C

Social Mobilizer/NGO's Co-ordinator (48 Person-Months)

85. The Social Mobilizers which will be employed at the design stage and will review the Socio-economic Survey undertaken during the (TA-PAK 4098) and confirm/update the results through field visits of randomly selected sites, particularly the slum and underserved area. Review the impact of proposed Sub-Projects on Women and poor people and identify all possible options to enhance the participation of beneficiaries particularly at the design and construction stages. Maintain liaison with male and female district, tehsil and Union Councillors during the design of services.

86. Prepare eligibility criteria for NGO's, CBO's and Union Councils for solid waste management/community participation

87. The Social Mobilizers will also update current data on NGO's and CBO's. They will also Co-ordinate & arrange for Seminars and Workshops for community education and participation.

70 Appendix 5

STEPS AND GUIDE FOR THE ENGAGEMENT OF CONSULTANTS

I. First Submission

81. The borrower first prepares a long list, which normally includes 15–20 technically qualified firms with experience in similar projects. The borrower may ask ADB for a list of qualified firms from the DACON. The borrower decides whether to include any of these firms on the long list and may also add other experienced firms to the list.

82. The borrower then prepares a shortlist of five to seven firms, which normally includes no more than one firm from any ADB member country. The borrower may propose to include two firms from one member country on the shortlist in special cases, for example, when not enough firms have the required expertise.

83. The borrower next finalizes the detailed TOR and recruitment schedule, and prepares the request for proposal (RFP) documents, a draft contract, and a format for evaluating the consultant’s performance. The RFP states the borrower’s budget for the consulting services and that the costs of the financial proposals, after the borrower evaluates them, are expected not to exceed this budget. The borrower then makes its first submission to ADB, in ADB’s standard format. The ADB’s consultant selection committee (CSC) reviews and approves

¾ the shortlisting criteria ¾ the shortlist, to ensure that all the firms are technically qualified and reasonably geographically spread ¾ the TOR and background information to ensure that they are clear and accord with the provisions in the loan document ¾ the RFP to ensure that the documents are clear and provide enough information for the consultants to fully prepare responsive proposals ¾ the proposed selection method, to make sure it is reasonable ¾ the proposed type of technical proposals that will be requested ¾ the proposed criteria for evaluating the technical proposals, including the weights for each criterion and the summary evaluation sheet ¾ the proposed recruitment schedule ¾ the draft contract to ensure that it complies with ADB procedures, and that the terms and conditions are reasonable ¾ the format for evaluating the consultant’s performance

The CSC’s review takes place before the loan negotiations, unless ADB agreed that the borrower would not use advance recruitment action.

84. The concerned division advises the borrower of the CSC’s or the division's decision.

II. Second Submission

85. The borrower then sends RFPs to the consultants on the shortlist. The RFPs ask the consultants to submit technical and financial proposals at the same time in separate sealed envelopes. Any proposals received after the stated deadline are rejected.

86. The borrower evaluates the proposals in two stages: first, the quality of the technical proposals, and second, the cost of the financial proposals. The borrower securely stores the unopened financial proposals and opens the technical proposals. The borrower’s CSC then

Appendix 5 71 evaluates the technical proposals using the evaluation criteria approved in the borrower’s first submission.

87. The borrower then makes its second submission to ADB in ADB’s standard format. The borrower submits the documents included in its first submission plus a technical evaluation report that includes

¾ a summary evaluation sheet, highlighting any proposal that scored less than the minimum of 750 points out of 1,000 ¾ a personnel evaluation sheet for each proposal ¾ comments on the strengths and weaknesses of each proposal ¾ minutes of the evaluation meeting(s)

88. ADB’s CSC reviews and approves the borrower’s technical evaluation report. The concerned division advises the borrower of the CSC’s decision.

89. The borrower informs any firms that submitted technical proposals that scored less than 750 points that they were unsuccessful and that the borrower will return their financial proposals unopened at the end of the selection process.

III. Third Submission

90. The borrower then informs the firms whose technical proposals scored 750 points or more of the time and place where the borrower will publicly open their financial proposals. The borrower also advises ADB when and where the opening will take place. The borrower schedules the opening at least 2 weeks after the notification.

91. At the public opening, the borrower records the names of those attending and reads aloud the technical scores of the firms whose proposals scored at least 750 points. The borrower then opens those firms’ financial proposals and reads aloud the total price shown in each proposal. All the other information in the financial proposals is kept confidential. The borrower prepares minutes of the proceedings.

92. The borrower next evaluates the financial proposals. The borrower

¾ checks that the commercial terms in the proposals comply with the requirements in the RFP ¾ corrects any mathematical errors ¾ makes sure that the costs of all the items in each firms’ technical proposals are included in their financial proposals ¾ makes sure that the proposals include the costs of any provisions the firms stated and of the contingency amount specified in the RFP ¾ makes sure the proposals exclude any identified local income tax on the international experts ¾ converts any amounts in other currencies to US dollars using the source for the exchange rates that was stated in the RFP

All the evaluated prices are not expected to exceed the contract budget stated in the RFP.

93. The borrower then calculates the score of each financial proposal by dividing the price of the lowest priced proposal by the price of the proposal being considered and multiplying the result by 1,000.

72 Appendix 5

94. The borrower calculates the total score for each firm by adding 80% of the technical score to 20% of the financial score. The borrower ranks the firms based on their total scores and prepares a financial evaluation report that includes five forms provided by ADB.

95. The borrower then makes its third submission to ADB, in ADB’s standard format. The borrower submits the documents included in its first two submissions plus the minutes of the public opening, the financial evaluation report, the ranking, and the minutes of the financial evaluation meeting(s).

96. ADB’s CSC reviews and approves the borrower’s documents. The CSC’s approval is final, and ADB does not consider any revised rankings submitted later. If the borrower has not followed the agreed selection procedures, ADB reserves the right not to finance the contract. The concerned division advises the borrower of the CSC’s decision.

IV. Fourth Submission

97. The borrower then negotiates a contract with the first-ranked firm. The negotiations include the firm’s methodology, work plan, and personnel schedule; the EA’s counterpart facilities; and the quantities of cost items in the firm’s financial proposal. Any changes made in the TOR requirements are minor because no substantial change may be made in the firm’s technical and financial proposals. The borrower and the firm may make minor changes in the quantities of the cost items in the financial proposal, but may not change the firm’s proposed rates for remuneration and expenses. When asked by the borrower, COCS provides a staff member to assist with the contract negotiations, if one is available.

98. If the borrower and the firm cannot reach agreement, the borrower may terminate the negotiations with ADB’s prior agreement and start negotiations with the next-ranked firm in turn until an agreement is reached.

99. After reaching an agreement with the selected firm, the borrower makes its fourth submission to ADB, in ADB’s standard format. The borrower submits the draft negotiated contract and the minutes of the contract negotiations. The concerned division reviews and approves the documents. The division

¾ makes sure that the negotiated terms and conditions are satisfactory ¾ asks COCS, Controller's Department, and OGC for comments, if necessary

The division advises the borrower of its decision.

V. Finalizing the Contract

100. After receiving ADB’s approval, the borrower signs the contract, obtains the consultant’s signature, and submits a copy to ADB for its records. After receiving the signed contract, the concerned division checks that it is substantially the same as the draft negotiated contract approved earlier.

101. The borrower returns the unopened financial proposals of the firms whose technical proposals scored less than 750 points.

Appendix 6 73

SUMMARY OF AUDITING REQUIREMENTS

102. ADB requires the submission of audited financial statements and separate project accounts and records exclusively for the Project to ensure that the Loan funds were used only for the objectives set out in the Loan Agreements.

103. The submission period is 6 months after the end of related fiscal year.

104. The accounts and records pertaining to the Project must be consistently maintained in accordance with sound accounting principles. The Auditor should also express an opinion whether the financial report has been prepared using international accounting standards or local generally accepted accounting standards and policies, which have been consistently applied.

105. To the extent possible, ADB prefers that project accounts are maintained in accordance with international accounting standards prescribed by the International Accounting Standards Committee. In this context, please specify to your Auditor to also comment on the impact of deviations, if any, of the accounting standards applied by the Borrowers from the international accounting standards.

106. The project accounts should be audited in accordance with appropriate auditing standards consistently applied by the Auditor. The Auditor should specify in the Auditor’s Report the auditing standards followed by them in conducting their audits. Furthermore, they should expand the scope paragraph in the Auditor’s Report by disclosing, at least, the key audit procedures followed in the audit. If there are any supplementary Financial Statements to the Project’s main financial statements, the Auditor should also make a statement whether the same audit procedures have been followed for the supplementary financial statements as for the Project’s main financial statements.

107. To the extent possible, ADB prefers that Auditors conform to international auditing standards issued by the International Federation of Accountants. In cases where other auditing standards are used, the Auditors should indicate in the Auditor’s Report the extent of differences, if any, and the impact on the audit, of the use of such auditing standards compared with that of the international auditing standards.

108. Apart from expressing an opinion on the financial condition of the Project, the Auditors should also express an opinion as to whether:

(i) the proceeds of the ADB Loans have been utilized only for the Project in accordance with the Loan Agreements;

(ii) the financial information contains data specifically agreed upon between the Borrowers and ADB as being necessary for inclusion in the Financial Statements;

(iii) the financial information complies with relevant regulations and statutory requirements; and

(iv) all the financial covenants of the Loan Agreements have been complied with.

74 Appendix 6

109. When a qualified opinion, adverse opinion, or a disclaimed opinion is given, the Auditor’s Report should state in a clear and informative manner all the reasons therefor.

110. Actions or deficiencies disclosed by the Auditors in their Report should be resolved by the Borrower effectively and within a reasonable time. The Auditors should review and comment upon the adequacy of the corrective measures taken by the Borrowers in the subsequent Auditor’s Report.

111. In case of six months delay in the submission of audited accounts and financial statements, ADB will automatically suspend processing of reimbursements or commitment letters, replenishment of imprest account, and approval of award of new contracts.

112. If the audited accounts and financial statements are not received 12 months after its due date, ADB will consider the suspension of the Loans.

Attachments

I. Sample Terms of Reference for the Audit of Project Financial Statements II. Sample Form of Auditor’s Opinion

Appendix 6 75

Attachment I

SAMPLE TERMS OF REFERENCE FOR THE AUDIT OF PROJECT FINANCIAL STATEMENTS

Audit Objectives

The objective of the audit of the Project Financial Statement is to ensure, through the auditor’s professional opinion on the financial position of the Project at the end of each fiscal year and of the funds received and expended for the accounting period ended as reported by the Project, that Project funds are being utilized properly to achieve the intended objectives of the Project, and that the financial covenants of the Loan Agreements are being adhered to.

The project accounts provide the basis for preparation of the Project Financial Statement and are established to reflect the financial transaction in respect of the project, as maintained by the project executing agency.

Audit Scope

The audit will be carried out in accordance with internationally accepted standards of auditing, and will include such test and procedures as the auditor considers necessary under the circumstances. In conducting the audit, the following should also be taken into consideration:

(a) all funds provided by the Asian Development Bank (ADB) and its cofinanciers have been used in accordance with the conditions of the relevant loan agreements, with due attention to economy and efficiency, and only for the purposes for which the loans were granted. Relevant loan agreements are (name of loan agreements);

(b) counterpart funds have been provided and used in accordance with the relevant agreements, with due attention to economy and efficiency, and only for the purposes for which they were provided;

(c) goods and services financed have been provided in accordance with the relevant ADB and/or its cofinanciers’ loan agreements;

(d) all necessary supporting documents, records, and accounts have been kept in respect of all project expenditures (including expenditures reported using Statement of Expenditures or Imprest Fund procedures);

(e) where Imprest Fund have been used, they have been operated in accordance with the provisions of the relevant loan agreements.

(f) the financial statements follow acceptable accounting standards and give true and fair description of the financial positions of the submitting entity.

76 Appendix 6

Attachment II

SAMPLE FORM OF AUDITOR'S OPINION

IMPREST ACCOUNT

We have examined the Statement of Imprest Accounts of ADB Loans 2211-PAK(SF)/ 2212-PAK: Rawalpindi Environmental Improvement Project for the period ______up to ______, pursuant to the Loan Agreements dated 22 December 2005.

Our examination was made in accordance with generally accepted auditing standards emphasizing the adequacy and completeness of the supporting documents of the Imprest Accounts and other auditing procedures as we considered necessary in the circumstances.

In our opinion, the Statement of Imprest Accounts and supporting documents and information submitted with them can be fairly relied on to support the applications for reimbursement/payment in accordance with ADB's requirements as set out in the Loan Agreements.

STATEMENT OF EXPENDITURES

We have also examined the Statements of Expenditures submitted to ADB during the period in support of applications for liquidation of the Imprest Accounts pursuant to the above- mentioned Loan Agreements. Our examination was made in accordance with generally accepted auditing standards and, accordingly included such tests of the accounting records, verification of assets and other such auditing procedures as we considered necessary in the circumstances.

In our opinion, the Statement of Expenditures submitted, together with the internal control and procedures involved in their preparation, can be fairly relied on to support the applications for liquidations in accordance with the requirements of the above-mentioned Asian Development Bank Loan Agreements.

Appendix 7 77

I. PRO FORMA OF THE PROJECT PROGRESS REPORT

A. Introduction and Basic Data

Provide the following:

¾ ADB loan number, project title, borrower, executing agency(ies), implementing agency(ies); ¾ total estimated project cost and financing plan; ¾ status of project financing including availability of counterpart funds and cofinancing; ¾ dates of approval, signing, and effectiveness of ADB loan; ¾ original and revised (if applicable) ADB loan closing date and elapsed loan period based on original and revised (if applicable) loan closing dates; and ¾ date of last ADB review mission.

B. Utilization of Funds (ADB Loan, Cofinancing, and Counterpart Funds)

Provide the following:

¾ cumulative contract awards financed by the ADB loan, cofinancing, and counterpart funds (commitment of funds to date), and comparison with time-bound projections (targets); ¾ cumulative disbursements from the ADB loan, cofinancing, and counterpart funds (expenditure to date), and comparison with time-bound projections (targets); and ¾ reestimated costs to completion, need for reallocation within ADB loan categories, and whether an overall project cost overrun is likely.

C. Project Purpose

Provide the following:

¾ status of project scope/implementation arrangements compared with those in the report and recommendation of the President (RRP), and whether major changes have occurred or will need to be made; ¾ an assessment of the likelihood that the immediate development objectives (project purpose) will be met in part or in full, and whether remedial measures are required based on the current project scope and implementation arrangements; ¾ an assessment of changes to the key assumptions and risks that affect attainment of the development objectives; and ¾ other project developments, including monitoring and reporting on environmental and social requirements that might adversely affect the project's viability or accomplishment of immediate objectives.

D. Implementation Progress

Provide the following:

¾ assessment of project implementation arrangements such as establishment, staffing, and funding of the PMU; ¾ information relating to other aspects of the EAs’ internal operations that may impact on the implementation arrangements or project progress; ¾ progress or achievements in implementation since the last progress report; ¾ assessment of the progress of each project component;

78 Appendix 7

¾ assessment of progress in implementing the overall project to date in comparison with the original implementation schedule—quantifiable and monitorable target, (include simple charts such as bar or milestone to illustrate progress, a chart showing actual versus planned expenditure, S-curve graph showing the relationship between physical and financial performance, and actual progress in comparison with the original schedules and budgets, the reference framework or guidelines in calculating the project progress; and ¾ an assessment of the validity of key assumptions and risks in achieving the quantifiable implementation targets.

E. Compliance with Covenants

Provide the following:

• the borrower's compliance with policy loan covenants such as sector reform initiatives and EA reforms, and the reasons for any noncompliance or delay in compliance; • the borrower’s and EAs’ compliance with financial loan covenants including the EAs’ financial management, and the provision of audited project accounts or audited agency financial statements; and • the borrower’s and EAs’ compliance with project-specific loan covenants associated with implementation, environment, and social dimensions.

F. Major Project Issues and Problems

Summarize the major problems and issues affecting or likely to affect implementation progress, compliance with covenants, and achievement of immediate development objectives. Recommend actions to overcome these problems and issues (e.g., changes in scope, changes in implementation arrangements, and reallocation of loan proceeds).

II. FRAMEWORK AND GUIDELINES IN CALCULATING PROJECT PROGRESS

A. Introduction

1. To ensure that all implementation activities are reflected in measuring implementation progress against the project implementation schedule, the term "physical completion” in the PPR has been changed to "project progress.”

2. Physical and precommencement activities are considered in calculating project implementation progress. These activities, which may include recruitment of consultants, capacity building, detailed design, preparation of bid and prequalification documents, etc., could constitute a significant proportion of overall implementation and therefore should be counted.

3. Each activity in the implementation schedule will be weighted according to its overall contribution (using time as a reference) to progress of project implementation. These weights will then be used to calculate the percentage of project progress along the entire time span of the project. This is to provide a holistic view of the pace of implementation.

B. Framework for Compiling Activity List and Assigning Weights

4. As implementation activities and their corresponding weights will vary according to the

Appendix 7 79 type of project, sector, and country, sector divisions or RMs will be responsible for determining and including them in the project administration memorandum. The actual project implementation progress of these activities should be reported regularly through the EAs’ quarterly project progress report. To ensure ADB-wide consistency, the following framework has been established; its application will be monitored through the PPR.

1. Compilation of Activity List

5. Sector divisions or RMs concerned should identify major implementation activities and include them in the implementation schedule, which is attached as an appendix in the report and recommendation of the President (RRP). The implementation schedule should follow the critical path of the project’s major activities in project implementation taking account of various country, sector, and project constraints.

2. Assignment of Weights

6. Corresponding weights for each activity should be assigned to ensure that “project progress" measures the percentage of achievement (nonfinancial except when the project has credit components) for all events during the entire duration of the implementation schedule. To avoid disproportionate assignment of weights, to the extent possible these should be evenly distributed along the implementation schedule. When activities are concurrent, avoid “double counting.”

3. Computation of Project Progress

7. Once all activities are identified and corresponding weights assigned, project progress should be calculated using the following steps:

(i) Determine the actual percentage progress (nonfinancial) of each activity. (ii) Multiply these percentages by the assigned weight of each activity to arrive at the weighted progress. (iii) Add up the resulting weighted progress of all activities to determine the project progress.

80 Appendix 7

Below is an illustration of this calculation using a generic sample implementation schedule of an education project.

Implementation Schedule with Activities and Weights

Yr1 Yr2 Yr3 Yr4 Yr5

a B

b C d c D ef A C T I V E S A

1. Sum of all weights should equal 100 percent (a+b+c+d+e+f+g = 100%) 2. When calculating the percentage of “project progress,” all completed activities should be counted as accomplished, regardless of when they were scheduled to be completed. For example, when calculating the percentage of “project progress” after year 3, if activity D is completed in year 3 rather than in year 2, it should still be included in the computation. 3. Total weight of each activity is as follows: Activity A–a; Activity B–b; Activity C–c; Activity D–d; and Activity E–e + f +g 4. Project progress of a project is the summation of the actual percentage of progress for each activity multiplied by the total weight of each activity.

Appendix 9 81

DRAFT PROJECT PERFORMANCE MANAGEMENT SYSTEM

• INTRODUCTION AND APPROACH

1. Project Performance Management System (PPMS) is a set of activities to identify, record and analyze information in order to ensure that a planned intervention has the desired results and beneficial impact. It will seek to establish a cause-and-effect relationship between the Project and the impact. In accordance with ADB's PPMS Handbook and the Project objectives, PPMS will assist the Project in bringing about the improvements in basic urban services that benefit people's health and well-being, and their environment. Indicators pertaining to physical and socio-economic development are identified to facilitate monitoring and evaluation of benefits that will accrue from the Project components to the beneficiaries.

• PPMS FRAMEWORK

2. The PPMS will cover three aspects of Project implementation, namely:

(i) Institutional strengthening of the Rawal Town, and RWASA under the Project, as reflected in an increased capacity to manage, finance and maintain the basic urban services included under the Project; (ii) Implementation of sub-projects, including (a) design, tender and construction, (b) service delivery, and (c) beneficiary satisfaction; (iii) Impact evaluation, identifying citywide changes in economic growth, poverty reduction, public health, and community participation.

3. A baseline survey will be carried out at the start of Project implementation to collect any missing indicator values on the indicators outlined in the next section. A mid-term PPMS survey be performed to enable data to be available at the time of the ADB mid-term review, determine the necessary adjustments to be made in the set of performance indicators, and a final PPMS survey to be conducted at the end of the Project to determine the overall impact.

• PERFORMANCE INDICATORS

Institutional Strengthening Indicators

29. Revenue Generation and Financial Management of Rawal Town

(i) Ratio of total annual revenue to total annual expenditure; (ii) Percentage change in locally generated revenue (taxes, rents, fees, sale of treated sewage to farmers; and other charges); (iii) Budgeted and realized expenditure for O&M in each sub-sector (water supply, sewerage and solid waste management) (iv) Change in property tax collection efficiency (total collected over total levied annually); (v) Change in user charge collection efficiency (the ratio of total user charges collected over total local user charges levied) for water supply, sewerage, and solid waste;

82 Appendix 9

(vi) Status of actions taken by the Rawal Town on the institutional action plan (agreed versus actual progress); (vii) Timings of training provided and number of staff trained in urban infrastructure management and revenue generation, and execution & operation of supplementary urban facilities under Organization Development Program;

30. Revenue Generation and Financial Management (RWASA)

(i) Total annual revenue. (ii) Total annual expenditure (iii) Collection efficiency (iv) Average tariff (total billings divided by total consumption) Rs/m3 (v) Average household water consumption per month (m3) (vi) Average household water bill per month (Rs) (vii) Number of registered domestic connections (viii) Number of registered non-domestic connections (ix) Non-Revenue Water as % of water produced. (x) Proportion of all connections metered (%) (xi) Number of staff trained and days training per staff) under Organization Development Program (xii) Total number of staff / positions vacant (xiii) Coverage % of Rawalpindi Population with Piped Water in Home (xiv) Annual Report on Operations published by RWASA.

Sub-project Implementation Indicators

31. Water Supply

(i) The number of tubewells, ground storage reservoirs, and lengths of distribution pipelines constructed and/or rehabilitated; (ii) The number of water meters installed; (iii) Increase in volume of water delivered; (iv) Planned vs. actual duration for detailed design, tender and construction; (v) Planned vs. actual cost; (vi) Delivery and use of water broken down by type of connection (house connection, standpipe, commercial, industrial, institutional, other), estimated number of beneficiaries, volume of consumption, and hours of service; (vii) Quality of water produced (physical, chemical, heavy metals, and bacteriological); (viii) Average tariff, billings and accounts receivable in each customer category; and (ix) Beneficiary satisfaction surveys

32. Sewerage and Sewage Treatment

(i) Type and size of facilities constructed (sewage treatment plant, pumping stations, transfer tunnels and sewers – lengths and sizes);

Appendix 9 83

(ii) Number of sewerage house connections (a) total (b) in low income areas (iii) Planned vs. actual duration for detailed design, tender and construction, and procurement of equipment; (iv) Planned vs. actual project cost; (v) Volume of sewage treated as percentage of volume generated; (vi) Quality of treated sewage (Bio oxygen demand); (vii) Volume of treated water being used for irrigation and revenue generated with its sale; and (viii) Beneficiary satisfaction surveys.

33. Solid Waste Management

(i) Type and number of waste collection and disposal equipment required and provided; (ii) Solid waste transfer stations developed and used; (iii) Number of scavengers licensed; (iv) Extent of recycling and composting; (v) Number of public-private partnerships established; (vi) Landfill site developed and maintained; (vii) Number of Rawal Town staff trained; (viii) Type and extent of involvement of private sector/NGOs; (ix) Increase in solid waste collection efficiency (ratio of volume of solid waste generated and collected); (x) Increase in solid waste disposal efficiency (monthly data for the number of trucks/trolleys used per day); (xi) Efficiency of maintenance of machinery (ratio of total number of vehicles available and operative), and O&M budget (allocated and released) for vehicles and landfill site; (xii) Total number of households, and the households being billed; (xiii) Increase in user charges collection ratio (ratio of amount billed and collected); (xiv) Beneficiary satisfaction surveys

34. Stormwater Drainage

(i) Length of drains remodeled and constructed; (ii) Planned vs actual duration for design, tender and construction; (iii) Number of households benefiting from improved drainage;

35. Slaughterhouse

(i) Type and size of slaughterhouse constructed; (ii) Planned vs. actual duration of design, tender and construction; and (iii) Planned vs. actual cost;

36. Community/Public Sanitation

(i) Number of community and public toilets constructed; and (ii) Number of households benefiting from the facilities.

84 Appendix 9

37. School Water Supply and Sanitation

(i) Number of schools connected to safe drinking water supply; (ii) Number of schools connected to latrines constructed; and (iii) Number of pupils benefiting from the facilities.

Impact Evaluation Indicators

38. Poverty Alleviation and Economic Growth

(i) Change in average household income level, and percentage of urban population in absolute poverty; (ii) Percentage increase in land values within 100-meter project improvements;

39. Public Health

(i) Percentage change in incidence of diarrhea and other water-borne diseases; (ii) Percentage change in BOD 5 and e-coli count in a representative sample of well water and/or pipe-borne water; and (iii) Percentage change in incidence of vector borne-diseases from insects.

40. Access to Serviced Residential Plots

(i) Percent change in the annual number of existing dwelling units gaining access to individual water connections as a proportion of new connections over existing connections. (ii) Percent change in the annual number of new connections to the sewerage system as a proportion of new connections over existing connections;

41. Community Development

(i) Percent change in the number of Community Development Committees, other community-based organizations (CBOs), and Women's Groups registered with the Rawal Town.

Appendix 10 85

SUMMARY ENVIRONMENTAL IMPACT ASSESSMENT

113. An environmental impact assessment (EIA) was prepared for the Rawalpindi Environmental Improvement Project (the Project). This summary focuses on the Project’s key environmental impacts and mitigation measures, and environmental management plans.

A. Key Environmental Impacts and Mitigation Measures

114. Water Quality. The groundwater table in Rawalpindi has sharply depleted over the past 20 years. Provision and rehabilitation of new tubewells will consider the overall impact that further water extraction would have on the local water table and existing tubewells. Detailed engineering design will undertake modeling and provide calculations to establish an optimal extraction rate. Selected aquifers should be suitable for water consumption and contain sufficient resources. Water testing will be undertaken in all cases by the Public Engineering Health Department. At the proposed sewage treatment plant (STP) site, lining and sealing of the base and sides of the ponds with high-quality, impermeable material will be ensured during the detailed design. Protection embankments will be provided to prevent flooding of the STP and sewage overflow from the stabilization ponds. Effluent from the proposed STP is designed to meet national standards. The Project includes a comprehensive water quality monitoring plan, and onsite laboratory facilities.4 Construction and operation of a larger slaughterhouse will generate additional biological waste, which, if improperly managed, could contaminate watercourses and spread communicable diseases. Collection, treatment, and disposal systems for different types of slaughterhouse wastes are an integral part of the design.5

115. Air Quality. Unmanaged air pollution from construction may create nuisance and, in extreme cases, adverse health impacts and property damage. Mitigation measures will include (i) operating construction vehicles within agreed time periods, (ii) covering wagons and skips, (iii) enclosing demolition sites, (iv) spraying dusty roads, (v) maintaining moisture on construction materials, (vi) covering transportation and garbage vehicles, (vii) controlling vehicle speed, (viii) selecting transportation routes to minimize impact on sensitive receptors, (ix) covering exposed soil or storage areas, (x) limiting excavation and land leveling works to rainy season, and (xi) minimizing the onsite storage time of construction material. All vehicles and construction machinery will be operated in compliance with prescribed vehicle emission standards and engines will be properly maintained to reduce air pollution from exhausts and oil spills.

116. The proposed landfill is expected to produce certain amounts of toxic gases6 that could create nuisance and health hazards for nearby communities if they are not appropriately controlled. Mitigation measures proposed include provision of proper soil cover, buffer zone, plantation and an adequate gas control system. Methane monitoring will be essential, especially considering the close proximity of brick kilns. Odor from open stabilizations ponds will disturb neighboring areas when the STP is operating. Odor control measures will be based on an impact assessment during detailed design. Proper operation and maintenance of the plant—and

4 The STP is designed to treat municipal sewage from the city. Its operational efficiency and life could be seriously affected by the ingress of any industrial/hazardous waste. Although Pakistan’s environmental legislation prohibits such practices, implementation and monitoring are weak. Municipal authorities have committed to address this issue by preventing the issuance of sewage discharge permits, exerting tight control, and issuing heavy fines to violators. 5 Environmental monitoring and compliance mechanisms will be built into the structure of the slaughterhouse management and a waste management plan developed during detailed design will be endorsed and implemented prior to slaughterhouse operation. 6 Primarily methane and carbon dioxide; and small quantities of hydrogen sulfide, carbon monoxide, and ammonia as a result of solid waste decomposition.

86 Appendix 10 mitigation measures such as tree planting and development of a greenbelt as a buffer zone— will be required to minimize odor.

117. Geology and Soils. Project design will ensure against soil erosion and damage to water quality resulting from construction works by immediate resurfacing and stabilizing newly exposed surfaces and cuts. Wherever possible, surplus earth and spoil material from excavation will be used to produce bricks, to mix with cement, or to build embankments for the STP site. Surplus material will be appropriately disposed of in designated areas. Engineering design and construction will include a detailed geological study that will carefully consider topography, faults, and any other soil characteristics to ensure safe practices. The contractor will provide satisfactory treatment and disposal of solid and liquid wastes at the work site and workers’ camps to prevent soil degradation, pollution, and abuse of natural resources. Adequate monitoring and mitigation of complaints from the community will also be undertaken.

118. A drainage system for upper areas of the STP will be developed during detailed design. Sludge will be sampled and tested to ensure compliance with agricultural standards and if toxic materials are found in the dry sludge, municipal authorities will consider safe underground disposal and the significant cost increases associated with treatment.

119. Change in Land Use. The proposed site for the STP is currently used to grow food crops and vegetables. The proposed STP requires a large surface area and will significantly change the present land use, degrade aesthetics of the area, and depress property value. These impacts will be permanent, but intensity will be minimized with suitable landscaping, planting, and vegetation.7

120. Ecosystems. Mitigation measures are required to limit sediment concentration during construction which can affect aquatic habitat, minimize construction noise which can disturb wildlife and birds, minimize impacts on human settlements, and minimize effects on ecosystems. The Project will significantly improve aquatic environments by treating sewage. Tree plantation at the proposed landfill and STP sites will be undertaken to enhance the appearance of the sites and provide a natural buffer. This will enhance soil retention and erosion control, providing an aesthetic and visual screen against sound, dust, toxic emissions, night glare, and pollution of watercourses. Preference will be accorded to indigenous species to ensure their adaptability to the natural ecosystem.

B. Environmental Management Plans

121. Environmental management plans (EMP) have been formulated for the proposed STP and landfill site. They will serve as guidelines for municipal authorities, selected contractors, and other parties involved in mitigating potential environmental impacts. Regular environmental monitoring will be carried out and results will be used to evaluate the actual extent of the environmental impacts, performance of the environmental protection, prevention and mitigation measures, compliance with rules and regulations, and overall EMP effectiveness. A comprehensive EMP will be prepared for every component during detailed design. During review missions, ADB will assess environmental compliance by the Project Management Unit (PMU), authorities, and communities. To ensure that contractors comply with the EMPs, the following specifications should be incorporated in all construction bidding procedures: (i) a set of environmental prequalification conditions for potential bidders, (ii) a list of environmental items to be budgeted by the bidders in their proposal, (iii) environmental evaluation factors for bid

7 Land acquisition and resettlement impacts are discussed in Appendix 10.

Appendix 10 87 reviewers, (iv) environmental clauses for contract conditions and specifications, (v) full EIA for compliance, and (vi) ADB’s environmental procurement guidelines.

122. The executing agency for the Project will be the Rawalpindi Development Authority. The PMU will be responsible for overall coordination, planning, implementation, and management of all project activities. Private contractors will execute subprojects and be responsible for implementing environmental mitigation measures. The PMU, with the assistance of the environmental consultant, will supervise and monitor compliance.8 During the operation phase, the TMA will be responsible for compliance and monitoring of environmental mitigation measures for the proposed landfill site and slaughterhouse, while the Rawalpindi Water and Sanitation Agency will ensure compliance and monitoring of mitigation measures for the remaining subprojects. The Punjab Environmental Protection Department may check at any point whether activities comply with national environmental legislation and monitor enforcement of recommendations for environmental mitigation measures as prescribed in the EIA.9

C. Conclusions

123. The Project will result in substantial environmental benefits including improved ground and surface water quality, as well as improved solid waste and sewage collection and treatment. This will significantly improve health and quality of life in Rawalpindi, as well as agriculture and fishing in the Soan River downstream.

124. Predicted adverse significant impacts have been identified. Some impacts are minor and easily mitigated, while others could potentially be significant, long term, and irreversible if mitigation measures and monitoring plans are not enforced. In this regard, draft EMPs and monitoring plans have been developed for finalization during detailed design based on recommendations documented in the summary EIA (Supplementary Appendix F). ADB will review the finalized EMPs. Since all project components are still at the preliminary design stage, the EIA and EMP need to be updated based on the final engineering design. The revised EIA and EMP will be submitted to ADB for concurrence.

8 As part of the consulting services provided to the PMU under this Project, an environmental engineer with good knowledge of water treatment, disposal, and solid waste management will be engaged on a full-time basis for the duration of the Project. In addition, environmental monitoring and occupational health and safety services training will be provided as part of the training requirements provided in the EMPs. 9 The government of Punjab is committed to providing at least one environmental engineer and one environmental scientist for the STP every shift of operation. The engineer will undertake environmental compliance and day-to- day running of the wastewater treatment plant and effluent, the scientist will conduct discharge analysis and general environmental onsite monitoring.