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Railway Efficiency Improvement Project Project Administration Manual Project Number: 49111-005 Loan and Technical Assistance Grant Number: LXXXX, TAXXXX July 2019 Democratic Socialist Republic of Sri Lanka: Railway Efficiency Improvement Project ABBREVIATIONS ADB – Asian Development Bank CSRP – Colombo Suburban Railway Project DMF – design and monitoring framework DPD – deputy project director EMP – environmental management plan EMOP – environmental monitoring plan FMA – financial management assessment GRC – grievance redress committee IEE – initial environmental examination MOTCA – Ministry of Transport & Civil Aviation PIC – project implementation consultant PMU – project management unit OCR – ordinary capital resources SLR – Sri Lanka Railways SLGRTTC – Sri Lanka German Railway Technical Training Center SOE – statement of expenditure SPS – Safeguard Policy Statement TA – technical assistance CONTENTS I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 3 A. Project Readiness Activities 3 B. Overall Project Implementation Plan 4 III. PROJECT MANAGEMENT ARRANGEMENTS 6 A. Project Implementation Organizations: Roles and Responsibilities 6 B. Key Persons Involved in Implementation 7 C. Project Organization Structure 8 IV. COSTS AND FINANCING 11 A. Cost Estimates Preparation and Revisions 12 B. Key Assumptions 12 C. Detailed Cost Estimates by Expenditure Category 13 D. Allocation and Withdrawal of Loan Proceeds 14 E. Detailed Cost Estimates by Financier 15 F. Detailed Cost Estimates by Outputs 16 G. Detailed Cost Estimates by Year 17 H. Contract and Disbursement S-Curve 18 I. Fund Flow Diagram 19 V. FINANCIAL MANAGEMENT 20 A. Financial Management Assessment 20 B. Disbursement 23 C. Accounting 24 D. Auditing and Public Disclosure 24 VI. PROCUREMENT AND CONSULTING SERVICES 26 A. Advance Contracting and Retroactive Financing 26 B. Procurement of Goods, Works, and Consulting Services 26 C. Procurement Plan 27 D. Consultant’s Terms of Reference 27 VII. SAFEGUARDS 29 A. Environment 29 B. Grievance Redress Mechanism 30 C. Involuntary Resettlement and Indigenous Peoples 30 VIII. GENDER AND SOCIAL DIMENSIONS 32 A. Gender 32 B. Health 32 C. Labor 32 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 33 A. Project Design and Monitoring Framework 33 B. Monitoring 33 C. Evaluation 34 D. Reporting 34 E. Stakeholder Communication Strategy 36 X. ANTICORRUPTION POLICY 38 XI. ACCOUNTABILITY MECHANISM 38 XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 38 ATTACHMENTS A. Procurement Plan B. Design and Monitoring Framework C. Terms of Reference for Project Implementation Consultants D. Terms of Reference for Feasibility and Detailed Design Consultants–Kandy Suburban Railway E. Terms of Reference for Consulting Services Package Support for Preparation of Involuntary Resettlement Safeguards for Kelani Valley Railway Improvement Program Phase 1–Sections 1, 2, 3, and 4 F. Terms of Reference for Capacity Building Consultants–Modernization of Sri Lanka German Railway Technical Training Center G. Terms of Reference for Strategic Development Consultants–Transit-Oriented Development and Land Value Capture for Kelani Valley Line Corridor H. Terms of Reference for Individual Consultants for Advisory Services Project Administration Manual Purpose and Process 1. The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with the policies and procedures of the government and Asian Development Bank (ADB). The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. 2. The Ministry of Transport & Civil Aviation (MOTCA) and the Sri Lanka Railway Department (SLR) are wholly responsible for the implementation of ADB-financed projects, as agreed jointly between the borrower and ADB, and in accordance with the policies and procedures of the government and ADB. ADB staff is responsible for supporting implementation including compliance by MOTCA and SLR of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures. 3. At loan negotiations, the borrower and ADB shall agree to the PAM and ensure consistency with the loan agreement. Such agreement shall be reflected in the minutes of the loan negotiations. In the event of any discrepancy or contradiction between the PAM and the loan agreement, the provisions of the loan agreement shall prevail. 4. After ADB Board approval of the project’s report and recommendations of the President (RRP), changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval, they will be subsequently incorporated in the PAM. I. PROJECT DESCRIPTION 1. The proposed Railway Efficiency Improvement Project is the first project loan of the Asian Development Bank (ADB) in the railway sector of Sri Lanka. The project will finance high-impact subprojects to modernize the country’s railway network by improving the operational efficiency, maintenance capacity, safety management, skills development, and implementation capacity of Sri Lanka Railways (SLR) and the Colombo Suburban Railway Project (CSRP)–Project Management Unit (PMU), which has been set up under the Ministry of Transport & Civil Aviation (MOTCA) to implement ADB-financed projects. 2. The main components to be financed by the project include modern: (i) telecommunications system, (ii) ticketing system, (iii) operations headquarters and train control center, (iv) railway workshops, (v) maintenance equipment, (vi) housing blocks, and (vii) technical training center. By strengthening the efficiency and sustainability of railway operations, the project will (i) promote inclusive economic growth and the development of competitive services, industries, and supply chains across Sri Lanka; and (ii) contribute to improving the market share of railway transport and mitigating the impacts of road congestion, particularly in suburban Colombo. 3. The outcome of the project will be the improved efficiency, safety, and sustainability of railway operations in Sri Lanka.1 The project is aligned with the following impact: efficient, inclusive, safe, and sustainable movement of people and goods promoted to support sustainable economic development.2 4. The outputs of the project are: (i) Output 1: Operational efficiency improved. The project will improve three operational bottlenecks by: (i) procuring an island-wide, long-term evolution (LTE/4G) equipment to replace the telecommunications system installed in 1985, which cannot communicate with train drivers since the telegraph network was dismantled, does not allow voice recording or data transmission, does not reach all stations, and results in frequent delays;3 (ii) installing a modern multichannel (paper, mobile, and smart card) system to replace the cumbersome ticketing system, which requires tickets to be printed on custom-made paper for over 60,000 ticket combinations;4 and (iii) constructing a modern operations headquarters and train control center to replace both the current headquarters that cannot accommodate all operations departments of SLR, and the outdated control center opened in 1962 to monitor railway operations in the Western Province. (ii) Output 2: Maintenance capacity strengthened. The project will construct three workshops at SLR’s main maintenance facility at Ratmalana for engine overhaul and testing and repair of coach brakes. The project will also procure equipment to improve track and rolling stock conditions. The attached technical assistance (TA) will support the development of a detailed road map for the implementation of an 1 The design and monitoring framework is in Appendix 2. 2 Government of Sri Lanka, Ministry of National Policies and Economic Affairs. 2017. Public Investment Programme, 2017–2020. Colombo. 3 Most worldwide railway networks rely on older GPRS technology. Supply, operation, and maintenance will be carried out by an external telecommunications provider, based on performance reliability standards of 99.99%. 4 Pre-printed tickets are available for main origin–destinations. Sales are manually recorded at each station, and summarized on a monthly basis. There is limited flexibility for introducing new ticket types or fare structure. 2 asset maintenance strategy, particularly to support the modernization of the rolling stock and track maintenance capacity of SLR. (iii) Output 3: Railway safety improved. The project will support civil works for the construction of housing blocks to enable proposed resettlement matters for the railway lines including Kelani Valley line. Over 2,000 families live on the right-of- way within a meter of passing trains, resulting in frequent accidents. The project will also upgrade an old railway underpass between two major stations in Colombo, and upgrade traffic and pedestrian safety. Finally, the project will support improvements in passenger safety and of the information system at the Colombo Fort and Maradana stations, which are the largest stations of the railway network. (iv) Output 4: Technical training center upgraded. The Sri Lanka German Railway Technical Training Center (SLGRTTC) will be upgraded with a new training wing, a train simulator, and equipment packages to support the modernization of four curricula and the development of over six new curricula. The center, established
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