Forestry and Ecological Restoration Project in Three Northwest Provinces (RRP PRC 40684)
Project Administration Manual
Project Number: 40684 Loan and/or Grant Number(s): L2744/G0250 March 2016
People's Republic of China: Forestry and Ecological Restoration Project in Three Northwest Provinces
Contents I. PROJECT DESCRIPTION 1 A. Rationale 1 B. Impact and Outcome 3 C. Outputs 3 D. Special Features 5 II. IMPLEMENTATION PLANS 6 A. Project Readiness Activities 6 B. Overall Project Implementation Plan 7 III. PROJECT MANAGEMENT ARRANGEMENTS 9 A. Project Implementation Organizations – Roles and Responsibilities 10 B. Key Persons Involved in Implementation 11 C. Project Organization Structure 12 IV. COSTS AND FINANCING 13 A. Cost Estimates by Expenditure Category, Component and Financier 20 B. Allocation and Withdrawal of (Loan and/or Grant) Proceeds 17 C. Contract and Disbursement S-curve 18 D. Fund Flow Diagram 19 V. FINANCIAL MANAGEMENT 20 A. Financial Management Assessment 20 B. Disbursement 20 C. Accounting 22 D. Auditing 23 VI. PROCUREMENT AND CONSULTING SERVICES 23 A. Advance Contracting and Retroactive Financing 23 B. Procurement of Goods, Works and Consulting Services 24 C. Procurement Plan 25 D. Consultant's Terms of Reference 30 VII. SAFEGUARDS 32 VIII. GENDER AND SOCIAL DIMENSIONS 37 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 33 A. Project Design and Monitoring Framework 33 B. Monitoring 36 C. Evaluation 37 D. Reporting 37 E. Stakeholder Communication Strategy 37 X. ANTICORRUPTION POLICY 37 XI. ACCOUNTABILITY MECHANISM 38 XII. RECORD OF PAM CHANGES 38
Project Administration Manual Purpose and Process
The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM.
The State Forestry Administration (SFA), the forestry departments of Gansu, Shaanxi, and the Xinjiang Uygur Autonomous Region (Xinjiang) together with the county forestry bureaus are wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with government's and ADB’s policies and procedures. ADB staff is responsible to support the implementation, including compliance by SFA, forestry departments of Gansu ,Shaanxi, and Xinjiang together with county forestry bureaus of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.
At loan negotiations the borrower and ADB will 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 will prevail.
After ADB Board approval of the project's report and recommendations of the President (RRP), changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.
Abbreviations
ADB = Asian Development Bank ADF = Asian Development Fund AFS = audited financial statements CCAS = community consultation and disclosure strategy DMF = design and monitoring framework EARF = environmental assessment and review framework EIA = environmental impact assessment EMDP = ethnic minorities development plan EMP = environmental management plan ESMS = environmental and social management system GACAP = governance and anticorruption action plan GDP = gross domestic product ICB = international competitive bidding IEE = initial environmental examination IEM = integrated ecosystem management IPP = indigenous people plan IPPF = indigenous people planning framework LAR = land acquisition and resettlement LIBOR = London interbank offered rate NCB = national competitive bidding NGOs = nongovernment organizations PAI = project administration instructions PAM = project administration manual PMO = project management office PIU = project implementation unit QBS = quality based selection QCBS = quality- and cost-based selection RRP = report and recommendation of the President to the Board SBD = standard bidding documents SOE = statement of expenditure SPS = Safeguard Policy Statement TOR = terms of reference
I. PROJECT DESCRIPTION
A. Rationale
1. The project will help restore degraded and barren forest land in Gansu, Shaanxi, and Xinjiang with a focus on assisting (i) households upgrade degraded and barren forest land into economic tree crops, and (ii) state forest farms (SFFs) and forest stations improve ecological forestry development and management. Under economic tree crops development, numerous varieties of fruits, nuts, timber trees, and shelterbelt trees will be planted in the three provinces with the objective of converting barren forest land into more ecologically sustainable land use that generates sufficient profit to create incentives for the long-term management of natural resources. About 207,000 households will benefit from the tree crops development. By year 10, the project will generate an estimated 445,900 tons (t) of fruit and nuts of which apple production (about 288,240 t), grapes (about 32,390 t), and Chinese date (jujube) (about 31,950 t) are the major tree crops, along with production of walnut, persimmon, and other products. In addition, the project will finance the expansion of 9 profitable enterprises in Gansu with about 16,000 t of cold storage facilities, and support 17 other small enterprises in Xinjiang that have successfully worked with farmers.
2. Ecological forestry development will consist of (i) reforestation of about 3,000 ha of hilly and degraded land in Gansu, and (ii) facility improvement on seven SFFs in Shaanxi with a managed area of about 126,000 ha involving public–private partnerships with private ecotourism enterprises. In addition, GEF-financed activities in the three provinces will include (i) reforestation of about 700 ha of barren and steeply sloping land in southeast Gansu, (ii) restoration of degraded land in Xinjiang with sand-fixing and replanting technologies on about 435 ha (and about 630 ha using loan funds), and (iii) carbon market readiness and education with ecological forestry and climate change capacity development in Shaanxi's seven SFFs and five SFFs in Gansu. These SFFs will jointly improve their forest management with the aim of becoming eligible to sell the carbon sequestration in their forests through a carbon market. The SFFs will be assisted through a newly established ecological forestry center (EFC) based in Xian, Shaanxi.
3. Gansu, Shaanxi, and Xinjiang are among the poorest provinces in the PRC. The poverty incidence of Gansu is about 19.4% higher than the national average of about 5.2%, while the poverty incidences of Shaanxi and Xinjiang are both about 14% higher. Rural inhabitants in the project area are even poorer than the provincial averages. The project will respond to policy failures related to forest land tenure that have resulted in resources being allocated to low-value and non-sustainable land uses causing a loss of forest and tree crops benefits, and disadvantaged socio-economic conditions. These conditions have resulted in higher poverty and weak organizations responsible for managing the high-priority ecological assets in natural forests and critical watersheds for urban water supplies. These policy failures have also created externalities in terms of under-delivery of public goods in the form of soil and water protection.
4. Forest land is typically of three types in the PRC: (i) degraded ecological or natural forests, (ii) timber plantations, and (iii) economic trees comprising fruit and nut orchards. In the project area, the focus is on degraded ecological forests and economic trees. Degraded ecological forests are in need of restoration with improved forest density and forest cover. Ecological forests provide important environmental and biodiversity benefits, and help mitigate adverse climate changes. Forest land currently being cultivated and cropped annually, usually with wheat and maize, degrades through loss of soil qualities, such as organic matter and 2 carbon, and water holding capacity. The excessive use of fertilizer leads to water pollution, additional use of agrochemicals results in health and environmental threats, and high levels of irrigation cause depleted water resources. In addition, producers on these lands are increasingly living in below-average socio-economic conditions and lag further behind urban dwellers and more productive rural producers.
5. The high proportion of forest land in most rural regions combined with inappropriate low-value use is a significant constraint on the government's rural development objectives. For example, Shaanxi's collective forest land totals about 8.7 million ha and while all this is not cultivated, it represents about 42% of the total provincial land area. Gansu has about 4 million ha of collective forest land, which is about 25% of the total cultivated land area.
6. The conversion of annual cropping systems into perennial tree crops systems provides significant changes to the ecology. Tree crop development has a wide range of ecological and productive benefits compared with existing cropping systems. Tree crops in the northwest PRC reduce wind velocity by 20%–40%, with associated increases in relative air humidity of about 10%–20% and reduced evapo-transpiration rates by about 9%–25%. These effects have increased water content of soils by about 6%, improved water holding capacity by about 9%, increased effective soil moisture in the 0–30 cm profile by about 13%, increased soil organic matter by about 20%, increased total nitrogen by about 8%, and increased available phosphorous by about 16%. Crops grown in association with agro-forestry systems reported higher-crop yields ranging from 10% to 30% for wheat, 10% to 21% for maize, and 8% for cotton. The role of economic tree crops therefore fits (i) the government's policy for tree crop development, (ii) the movement of rural production systems into less damaging and more sustainable production models, and (iii) the objective of transforming development assets in the forest sector into tree cropping systems that generate greater returns to the rural economy.
7. In the three provinces, about 16% of the population (13.5 million) is below the poverty line and about 90% of the poor is in rural areas. The project area covers about 55% of the rural poor counties where the poverty incidence ranges from 28% to 42%. The major financial benefit arising from the project is the increase in output from economic tree crops, which is estimated to approach 445,900 t per annum by year 10. An estimated 207,000 households will receive financial benefits. Based on model farm budgets, the average farm household will have an additional income of CNY4,125 from economic tree crops. Rural households and women in particular, will benefit from reduced labor requirements. An assessment of the financial internal rates of return for each crop indicates that the expected returns range from 12.1% for ginkgo to 45.6% for Chinese dates. Financial due diligence was conducted for all enterprises that are included in the project. The results indicate that the nine private enterprises in Gansu have financial rates of return ranging from 12.5% to 18.2%, compared to a weighted average cost of capital of 5.2%.
8. Additional ecological benefits included in the calculations are (i) carbon sequestered over and above the without project situation, and (ii) soil and water retentions from the change of forest land use. The former includes the carbon captured by the ecological reforestation program of Gansu, the predicted incremental benefits of secured management of the seven pilot SFFs in Shaanxi, and the soil carbon benefits from moving away from traditional cropping systems to agroforestry or economic forestry. The economic internal rate of return for the overall project is estimated at 19.5%, ranging from 18.7% in Shaanxi to 19.8% in Xinjiang.
3
B. Impact and Outcome
9. The expected impact of the project will be the improved incomes and sustainable livelihoods from the use of forest land in Gansu, Shaanxi, and Xinjiang, through adoption of appropriate technologies and practices. This impact will be measured through improvements in forest economic tree crops, increases in per capita net incomes, and reduced number of poor people in the project area. An essential aspect of the sustainability of the project’s impact will be a reduction in the rate of forest farmland degradation. The impact is expected to benefit rural households in poor counties suffering from continuous degradation of agricultural land resources. The outcome of the project will be increased productivity of forest lands and reduced land degradation in Gansu, Shaanxi, and Xinjiang through appropriate and sustainable land use.
C. Outputs
10. The project outputs include (i) economic tree crop development on about 38,000 ha; (ii) ecological forestry development on about 300,000 ha; and (iii) project management support for both local government implementation and farm households.
1. Economic Tree Crop Development
11. A total of 13 varieties of fruits, nuts, timber trees, and shelterbelt trees will be planted in the three provinces. In this way, forest land will be converted into more ecologically sustainable land use that generates sufficient profit to create incentives for the long-term management of natural resources. About 207,000 households will benefit from the tree crops development. The planted area will require about 12,800 full-time jobs per year by the sixth year, and an estimated 48,500 full-time job equivalents from year 10 onward when harvest reaches the stable yield period. By year 10, the project will generate an estimated 445,900 tons (t) of fruit and nuts of which apple production (about 228,240 t); grapes (about 32,390 t); Chinese date (jujube) (about 31,950 t); walnut (about 25,000 t); and persimmon (about 18,555 t) are the major outputs. For apples, this represents about 2.5% of the current apple output from Gansu and Shaanxi. The proportion of Chinese dates, mulberry, grapes, walnuts, and persimmon is significantly less than 1% of existing provincial production levels. In addition, the project will finance the expansion of 9 profitable enterprises in Gansu with about 16,000 t of cold storage facilities, including seven apple storage enterprises, 1 ginkgo storage enterprise, and 1 walnut oil processing enterprise; and 17 other small enterprises (14 private farms and 3 public–private shareholding companies) in Xinjiang that have successfully worked with farmers.
2. Ecological Forestry Development
12. Ecological forestry development will consist of (i) reforestation of about 3,000 ha of hilly and degraded land in the higher, drier sites of Lintao and Tongwei counties in Gansu with shiny yellow horn trees; and (ii) facility improvement on seven SFFs in Shaanxi with a managed area of about 126,000 ha involving public–private partnerships with private ecotourism enterprises. In addition, GEF-financed activities in the three provinces (about $1.7 million available for each province) will include (i) reforestation of about 700 ha of barren and steeply sloping land in four counties of southeast Gansu with pine, larch, and other appropriate species; (ii) restoration of degraded land in Hami and Changji counties of Xinjiang with sand-fixing and replanting technologies on about 435 ha (and about 630 ha using loan funds); and (iii) carbon market readiness and education with ecological forestry and climate change capacity development in Shaanxi's seven SFFs. These SFFs will jointly improve their forest management with the aim of
4 becoming eligible to sell the carbon sequestration in their forests through a carbon market. The SFFs will be assisted in the management of ecological forests and initiating carbon trades through a newly established EFC based in Xian, Shaanxi. EFC operation is to be supported under the project.
13. The project will support the re-vegetation of barren lands and off-set the costs of soil erosion. Steep slopes will be stabilized with trees and other vegetation to reduce runoff. Mountain soils will be improved overtime with increased organic material with resulting benefits of water percolation and water holding capacity. Over time, it is expected that this will reduce both soil erosion and peak storm run-off rates lessening the risks of localized flooding downstream. The project will yield significant benefits in terms of climate change mitigation and adaptation. All tree planting activities, for ecological forestry and economic tree crops development, will significantly support the reduction of carbon sequestration, even if these benefits will not be registered under one of the carbon market schemes. Also, through a combination of sustainable land management practices, soil erosion will be reduced, the coverage of biomass (trees, plants, and grasses) will be improved, and subsequently soil organic matter will be increased. Efforts will be made to quantify the estimates of sequestrated carbon for all components. Adaptation to the impacts of climate change will be supported through assistance to farmers in the planting of more drought resistant crops (as compared to annual crops), reducing reliance on scarce water resources, and introducing more sustainable land management practices, including sand fixation, re-vegetation of barren lands, reduced wind erosion (shelter belts), improved pest management, and reduced tillage.
3. Project Management Support
14. Project management support will include (i) improvement in project implementation and management in provincial, municipal, and county implementing agencies; and (ii) technical support to participating households and farmers. Local governments will establish and provide adequate project management support complete with logistical facilities and technical staff for effective project implementation at provincial and county levels. The executing agency, the State Forestry Administration (SFA), the three provincial project management offices (PPMOs), and the 55 county project management offices (CPMOs) responsible for project implementation have been extensively involved in the preparation of the project, including applying the selection criteria in the choice of the areas and participating farmers, enterprises, and SFFs. They also have experience in implementing both donor-financed and government programs and projects in the sector. All agencies involved in the project, including the enterprises, have received annual training from the government on technological improvements, project management, and financial management. During project implementation, the monitoring of key impact, outcome, and output indicators will be undertaken by the PPMOs and CPMOs. Project financing will be used to provide (i) training in project management, including financial management, procurement, disbursement, and management information; (ii) ecological and environmental training, including pest identification, use of pesticides, integrated pest management, integrated crop management, and good agricultural practices (GAP); and (iii) social topics, including gender awareness, creating opportunities for women, and consultation approaches. The project will provide provincial-level training in (i) forestry site planning and project investment planning, (ii) financial management, (iii) procurement and disbursement, (iv) safeguards, and (v) project management and information systems. At the county level, training will be provided in (i) project management, (ii) procurement, (iii) training on SOE procedures, (iv) site selection and planning, (v) monitoring and evaluation, and (vi) financial management. ADB will also provide training on imprest account management, project implementation, and project performance management.
5
The project staff will also undertake awareness workshops to mobilize farmers and disseminate information relating to the project.
15. The provinces currently implement risk mitigation measures to assist farmers in the event of natural disasters (e.g., snow storms, floods, and drought) through provision of compensation (cash and in-kind inputs), training, and services. Also, the public sector provides farmers with training in improved farming practices (such as organic cultivation methods) and testing of products at market centers to ensure safety and quality. These measures will be provided to farmers under the project.
D. Special Features
16. Piloting public–private partnerships to improve the financial viability of state forest farms. Within Shaanxi province, there are about 213 SFFs, which have management responsibility for about 3.8 million ha, the vast majority of which is natural forests. Some 103 SFFs are located in the Qinling Mountains where they manage approximately 26% of the Qinling forest resources. The current financial viability of all the SFFs is weak with about 41% of SFFs reporting financial losses in 2007. On average, total expenses are about 107% of total annual income. Current income is subsidized with nearly 50% of the current annual income being provided through the Natural Forest Protection Program and other support mechanisms. This funding support is due to end in 2010 creating a significant short-term risk of business failures. Under a failure or loss scenario, there is a significant risk of illegal extraction of wood to meet short-term income needs. The project will assist seven SFFs in Shaanxi that manage about 126,000 ha of forests. The SFFs will receive financial support based on acceptable business plans that involve partnerships with private ecotourism enterprises for increased equity and improved management expertise. GEF grant funds will support carbon market readiness and education coupled with ecological forestry and climate change capacity development. If successful, the model will be replicated by the Shaanxi forestry department to the other SFFs.
17. Assisting state forest farms to access carbon markets. The potential value of carbon storage in natural forests in Shaanxi and Gansu will be brought to the market. The development and support of forestry management measurement and monitoring systems will enable the SFFs to qualify for the climate community and biodiversity carbon market, and receive payments over time. These payments will be used to improve the quality of natural forests and improve the sustainable operations of SFFs. The project will support the establishment of a new ecological forestry center, which will support the SFFs to manage ecological forests and engage in carbon trades. ADB’s technical support facility will provide support during project implementation to continue to assist eligible subprojects and identify potential buyers, such as the Asia and Pacific Carbon Fund.
18. Integration of the project into the government’s forest reforms. According to the policy guidelines of July 2008,1 those qualified to be the contractors of the collectively owned forest lands, wasteland, and barren mountains include farm households, private investors, and enterprises involved in forestry development. Forest dwellers make use of forest resources, such as fuel wood, timber, thatch, forage, food, and medicinal plants to meet a portion of their basic needs. The rate and severity of economic poverty of forest dwellers are disproportionately high as compared to people living outside of forests. An insecure property right for forest resources is an underlying cause of why forest poverty is so widespread and persistent. Without a secure access to land, many more people will be forced to act “illegally”, such as unlawful
1 Government of the People's Republic of China. 2008. Opinions on Overall Promotion of Collective Forest Tenure Reform. Document No. 10 of the Central Communist Party Committee. Beijing.
6 cutting and hunting simply to survive, which will increase the chances of social conflict. The project will assist the implementation of the forestry reforms with allocation of long-term use rights, conversion of uneconomic and unsustainable activities into more profitable and sustainable ones, and improved management training for profitable and environment-friendly activities.
II. IMPLEMENTATION PLANS
A. Project Readiness Activities
2011 Indicative Activities Mar Apr May Jun Jul Aug Sep Who responsible ADB Board approval (Mar 2011) ADB Loan signing (Jun 2011) Executing agency, ADB Government legal opinion provided (Jul 2011) Executing agency Government budget inclusion Executing agency, (Aug 2011) implementing agencies Loan effectiveness (Sep 2011) Executing agency, ADB
ADB = Asian Development Bank, LPMO = local project management office, PPMO = provincial project management office
7
B. Overall Project Implementation Plan Indicative Activities Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 DMF 1. Economic Tree Crop Development Train beneficiaries Planting and management of economic tree crops Approve enterprise business plans and financing Monitor tree survival rates Monitor beneficiary benefits and costs Monitor enterprise and marketing activities 2. Ecological Forestry Development Planting and management of ecological trees Establish ecological forestry center Develop and implement SFF business plans Design and train staff on carbon trading Approve and implement PPPs for SFFs Design payment for ecological services schemes 3. Project Management Support Operate project management offices Operate performance monitoring system Train project implementation staff Strengthen farmer associations Activities with Milestones Advance Actions Drafting of all project management procedures Design and implementation of PPMS Update of procurement plan for approval by SFA and ADB Preparation of household and enterprise loan agreements Identification of economic planting areas and household planting plans Ratification of year 1 tree planting plans Preparation of project training plan Training of project management staff in ADB procedures and systems Agreement and joint training with county finance officials on procedures and documentation Project Year 1 Implement procurement plan Initiate beneficiary training Plant about 21,000 ha of economic tree crops Prepare year 2 planting plans Approve ecological forestry center establishment in Shaanxi Monitor survival rates on economic tree planted areas Prepare county ecological planting plans starting year 2 Approve enterprise development plans by PPMO and award loans Contract business planning procedures for each pilot SFF Design carbon administration system and start training
8
Indicative Activities Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Project Year 2 Continue beneficiary training Plant about 13,900 ha of economic tree crops Plant about 2,640 ha ecological forests Plant replacement economic trees Staff and operate ecological forestry center Disburse value chain enterprise loans Plant and monitor survival Approve SFF business plans and identify private sector investors Establish carbon database and MIS Complete social monitoring
Project Year 3 Complete beneficiary training Plant about 3,100 ha of economic tree crops Plant about 1,250 ha of ecological forest trees Monitor and evaluate planting program Design carbon trade Design payment for ecological services schemes Complete PPP design and have it agreed by all parties Complete mid-term monitoring report
Project Year 4 Plant about 810 ha ecological forest trees Continue tending of trees Implement SFF enterprise investments First carbon trade
Project Year 5 Monitor project activities Train implementing agency staff completed Continue tending of trees Evaluate project outputs and evaluation survey Project completion report Conclude carbon trades
DMF = design and monitoring framework, PPP = private–public partnership, PPMS = project performance monitoring system, SFA = State Forestry Administration, SFF = state forest farms,
9
III. PROJECT MANAGEMENT ARRANGEMENTS
19. The executing agency at the national level will be SFA through its ADB loan project management office, and the forestry departments of the three participating provinces together with the county forestry bureaus will be the implementing agencies. The national project management office (NPMO) will be under the leadership of a director from SFA. The NPMO will be responsible for overall project management, communication with ADB, consolidation of progress reports once every 6 months, supervision and monitoring, and training and other technical support. The executing agency (SFA) is the same as that of the three completed and one ongoing World Bank-assisted projects in the forestry sector2 and the implementation arrangements will be similar to these projects.
20. Each province will set up a provincial lead group comprising the Department of Finance, the Forestry Department, and the Provincial Development and Reform Commission (PDRC) and will be chaired by a vice governor. Key roles of the leading groups are to ensure coordination between sector agencies and to address project strategic decisions. The Shaanxi leading group will also establish the proposed EFC and be responsible for investment and distribution decisions regarding (i) eco-compensation, (ii) carbon trading, and (iii) private sector participation in ecotourism. A PPMO will be established in each provincial implementing agency to organize, manage, and monitor project implementation activities. The PPMO will be a unit within the provincial forest department. The PPMO will have several full-time staff, including (i) a project director, with oversight responsibility for making decisions, monitoring achievements, and resolving issues; (ii) a technical support leader for technical assessment, technical training, planting monitoring, etc.; (iii) project management staff for the preparation and implementation of annual plans, performance management, training, reporting to SFA, and the establishment and operation of project monitoring and management systems; (iv) financial staff for the preparation of withdrawal applications, fund mobilization and expenditure summaries, loan repayment schedules and reconciliations, and auditing; and (v) general affairs staff for coordination and liaison with the municipality and CPMOs, and other related parties; and documentation management.
21. Each CPMO will operate under the leadership of a county project director and will be a unit within the county forestry bureau (CFB). The CPMO will work closely with the CFB to prepare work plans and arrange operational staff to undertake the project activities. The CPMO will be staffed with necessary staff depending on the scale and complexity of the planting program in the county. These staff may include (i) a project director for leadership and coordination of programs at the county level, including the organization of technical training from other sections of the CFB; (ii) technical support staff for site level planning, developing annual plans and designs, identifying technical training and site monitoring, inspection and ratification of documentation on field-level performance based on the approved design, coordination, and technical support of forest station programs; (iii) project management staff for data collection, contract management (households, civil works contractors, and private sector), procurement of planting materials for ecological, forestry, and documentation management, including reimbursement claims to be provided to the PPMO; and (iv) financial management staff for managing disbursement and reimbursement procedures, reconciling county level expenditures, maintaining repayment registers, and auditing.
2 World Bank. 1998. The Forestry Development Project in Poor Areas. Washington, D.C. ($200 million); World Bank. 2002. The Sustainable Forestry Development Project. Washington, D.C. ($110 million); World Bank. 1990. The National Afforestation Project. Washington, D.C. ($300 million); and World Bank. 1994. The Forest Resource Development and Protection Project. Washington, D.C. ($200 million).
10
22. Project implementation will basically adopt the implementation model of the two successful World Bank projects in the sector, the completed Forestry Development in Poor Areas Project and the ongoing Sustainable Forestry Development Project. For the economic tree crops component, households will be provided with long-term financing to purchase inputs, prepare land, and establish fruit and nut orchards. The households will be identified by the CPMO through the township forest station, which will work with households to develop a technical site plan. The site plan once approved by the CFB will be used to obtain a loan agreement with the county finance bureau that will be countersigned by the CPMO. The project will finance the first 3 years of tree crop establishment and replacements. The planting program will be spread over the first 3 years upon recognition that most planting blocks are small. Households will also receive technical support through the CFB technical staff on a continual basis for at least the first 5 years. The support will ensure that fertilizer, pruning, and pest management are completed to a high standard and that technical weaknesses are rectified.
23. The alternate modality will be undertaken in Xinjiang economic tree crops planting program where there are fewer local communities and the majority is state forest land as opposed to collective forest lands in Gansu and Shaanxi. In this modality, enterprises will be the subborrowers and they will contract land to households or collectives. These enterprises will follow the same procedures outlined above for the household modality. Xinjiang enterprises will implement the activities, working with farmers and farmer associations to establish and develop the production areas or bases and processing facilities, and will be responsible for all marketing activities. An agreement will be entered into between each participating enterprise and participating farmers. Many of these contracts are already in place, facilitating early project implementation. The enterprises in Gansu and Xinjiang were selected using agreed selection criteria and all have at least 3 years of experience in their current activities. All provincial and county agencies, and enterprises involved in the project have received annual training on technological improvements, project management, and financial management. The project will provide additional training.
24. For the ecological forestry component, reforestation of degraded forest land will take place in Gansu and Xinjiang, sand fixing with appropriate tree species in Xinjiang (entirely financed by GEF), and promotion of public–private partnerships for the economic and environmental sustainability of SFFs in Shaanxi. For the Gansu and Xinjiang activities, the planting programs will be implemented through the CFBs and their respective forest stations. Each forest station will confirm the areas to be planted and, once agreed with the CPMO, will prepare a detailed reforestation plan, including a site plan (map), planting layouts and densities, species, quality of planting materials, inputs, and labor requirements. The Shaanxi SFF subcomponent will require a support group within the PPMO. To manage the risks of revenue and enterprise development in the seven Shaanxi SFFs, an EFC is proposed to be established. This center will provide leadership, coordination, and technical assistance to the SFFs.
A. Project Implementation Organizations – Roles and Responsibilities
Project Implementation Management Roles and Responsibilities Organizations State Forestry Administration As the executing agency at the national level, will be through NPMO responsible for overall project management, communication with ADB, consolidation of progress reports once every 6 months, consolidation of annual audit reports and financial statements, supervision and monitoring, and training and other technical support.
11
Project Implementation Management Roles and Responsibilities Organizations
Provincial Forestry and As implementing agencies, will be responsible in Finance Departments through organizing, managing, and monitoring project PPMOs implementation activities. These include administration of imprest accounts and submission of withdrawal applications. County Forestry and Finance As implementing agencies together with the provincial Bureaus through CPMOs forestry departments will be responsible in preparing work plans and arrange operational staff to undertake the project activities. Provincial Lead Group Will be responsible in ensuring coordination between sector agencies and addressing project strategic decisions. ADB Facilitate overall project administration ADB = Asian Development Bank, CPMO = county project management office, NPMO = national project management office, PPMO = provincial project management office.
B. Key Persons Involved in Implementation
Executing Agency Agency Name Mr. Yan Zhen Director General State Forestry Administration Deputy Director, ADB PMO Telephone No.: +86 10 8423 9039 Email Address: ______Office Address: East Street, Hepingli, Beijing, PRC ADB Division Director ______Director Environment, Natural Resources, and Agriculture Division East Asia Department Telephone No.: +632 6326139 Fax No.: +632 636 2534 Email Address: ______Office Address: No. 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines
Mission Leader Raymond Renfro Lead Professional (Natural Resources Economist) Environment, Natural Resources, and Agriculture Division East Asia Department Telephone No.: +632 6326445 Fax No.: +632 636 2534 Email Address: [email protected] Office Address: No. 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines
12
Project Organization Structure
Project Coordinating Committee (SFA, MOF,ia and NDRC)
SFA’s ADB Loan Project Management Office
(Executing Agency at the National Level --
Coordination by NPMO)
Gansu, Shaanxi, and Xinjiang Provincial Governments (Implementing Agencies at the Provincial Level -- Coordination by PPMOs)
Municipal and County Governments (Provincial Implementing Agencies – Coordination by CPMOs, assisted by county Finance, Environmental Protection, and Poverty Reduction Bureaus)
About 207,000 Households, 26 Enterprises, and 12 State Forest Farms
ADB = Asian Development Bank, CPMO = county project management office, MOF = Ministry of Finance, NDRC = National Development and Reform Commission, NPMO = national project management office, PPMO = provincial project management office, SFA = State Forestry Administration. Source: Asian Development Bank.
13
IV. COSTS AND FINANCING
25. The project investment cost is estimated at $180.69 million, including taxes and duties of $6.4 million, physical and price contingencies, interest, and other charges. A summary of cost estimates is shown in Table 1 and details are provided in Table 2.
Table 1: Project Investment Plan ($ million) Item Amounta A. Base Costb 1. Economic Tree Crop Development 120.70 2. Ecological Forestry Development 18.34 3. Project Management Support 17.11 Subtotal (A) 156.15 B. Contingenciesc 9.65 C. Financing Charges during Implementationd 14.89 Total (A+B+C) 180.69 a. Includes taxes and duties of $6.4 million to be financed from the government and ADB resources. b. In end 2010 prices. c. Physical contingencies were computed at 5% of base costs. Price contingencies were computed based on ADB-prescribed (international and national) price escalator factors, and include provisions for potential foreign exchange rate fluctuations under the assumption of a purchasing power parity exchange rate. d. Includes interest and commitment charges during construction. Interest was computed at a US dollar 5-year swap rate plus a spread of 0.3%, and commitment charges were computed at 0.15% per annum on undisbursed funds. Source: Asian Development Bank estimates.
14
DETAILED INVESTMENT AND FINANCING PLANS Table 2: Detailed Investment Plan
Investment % of Costs Total Base Cost ($'000) A. Economic Tree Crops 1. Gansu Province 41,798 27 2. Shaanxi Province 32,596 21 3. Xinjiang Province 46,310 30 Subtotal 120,704 77 B. Ecological Forestry 1. Gansu Province 5,249 3 2. Shaanxi Province 10,619 7 3. Xinjiang Province 2,470 2 Subtotal 18,338 12 C. Capacity Building and Project Management Support 1. Gansu Province 4,618 3 2. Shaanxi Province 8,382 5 3. Xinjiang Province 4,104 3 Subtotal 17,104 11 Total Base Cost 156,146 100 D. Contingencies 1. Gansu Province 2,583 2 2. Shaanxi Province 4,052 3 3. Xinjiang Province 3,015 2 Subtotal 9,650 6 Total Base Cost and Contingencies 165,796 106 E. Interest During Implementation 1. Gansu Province 5,023 3 2. Shaanxi Province 4,335 3 3. Xinjiang Province 5,483 4 Subtotal 14,841 10 F. Commitment Charges 1. Gansu Province 18 0 2. Shaanxi Province 16 0 3. Xinjiang Province 16 0 Subtotal 50 0 Total Project Cost 180,689 116 Note: Figures may not add up due to rounding off.
26. The government has requested a loan of $100 million,3 including taxes and duties4 from ADB’s ordinary capital resources to help finance the project. The loan will have a 25-year term, including a grace period of 5 years, an interest rate determined in accordance with ADB’s London interbank offered rate-based lending facility for US dollar loans, a commitment charge of 0.15% per annum on undisbursed funds, and such other terms and conditions as set forth in the draft loan and project agreements. The government has provided ADB with (i) the reasons for its decision to borrow under ADB's London interbank offered rate-based lending facility on the basis of these terms and conditions, and (ii) an undertaking that these choices were its own independent decision and not made in reliance on any communication or advice from ADB. The financing plan is summarized in Table 2.
3 Transportation and insurance will be eligible under the loan and grant. 4 The calculation of taxes and duties to be financed under the project is based on the following principles: (i) the amount of taxes and duties financed by the ADB loan should not represent an excessive share of the project investment plan, (ii) the taxes and duties should only apply to ADB-financed expenditures, and (iii) the financing of taxes and duties should be material and relevant to the success of the project.
15
Table 2: Financing Plan ($ million) Source Amount % Asian Development Bank 100.00 55.3 Global Environment Facility 5.10 2.8 Provincial, Municipal, and County Governments 44.99 24.9 Enterprises 12.74 7.1 Households 17.86 9.9 Total 180.69 100.0 Source: Asian Development Bank estimates.
27. The borrower will be the PRC. On behalf of the government, the Ministry of Finance (MOF) will enter into subsidiary loan agreements with the 3 participating provinces as subborrowers of the proceeds of the ADB loan: Gansu, $33.34 million; Shaanxi, $33.33 million; and Xinjiang, $33.33 million. The provinces will onlend the proceeds of the loan in local currency or dollars to the municipal and county finance bureaus on the same terms and conditions as the ADB loan for further onlending to households, enterprises, and SFFs, with terms similar to the loan but with additional interest rate spread of up to 0.2% to cover possible loss and delay in repayment based on up to a 25-year term to households and SFFs, and up to a 15-year term to enterprises, including a grace period of up to 5 years. Proceeds from the repayment of the principal from the subloans to enterprises and SFFs will be used to maintain the provincial revolving funds for onlending for the same purposes and under the same terms and conditions as those for the ADB loan. The beneficiary households, enterprises, and SFFs will repay the loan proceeds and interest charges to the county finance bureaus for onward payment to ADB through the provincial governments and MOF. The foreign exchange risk will be borne by the provincial, municipal, and county governments and subborrowers that borrow in dollars. The provincial, municipal, and county governments will provide counterpart funds of $44.99 million, while the enterprises will contribute about $12.74 million in the form of equity and the beneficiary households will contribute $17.86 million equivalent in in-kind contributions of labor.
28. A GEF grant of about $5.1 million will be provided to assist with the ecological forestry component, and other grant funds (including climate change, and gender and development cooperation) are also being sought for the project.
16
A. Cost Estimates by Expenditure Category, Component, and Financier (‘000)a
Asian Development Global Environment Item Bank Fund e f Enterprises Provinces Total Amount Households % of Cost % of Cost % of Cost % of Cost % of Cost % of Total Amount Category Amount Category Amount Category Amount Category Amount Category Amount Project Cost Investment A. Planting Crop Inputs Costsbc 1. Economic Tree Crops 65,994 81 - - - - 9,724 12 6,039 7 81,757 45 1.1 Economic Tree Crops (in kind) - - - - 17,375 100 - - - - 17,375 10 2. Ecological Forestry 3,452 56 2,362 38 - - - - 325 6 6,139 3 2.1 Ecological Forestry (in kind) - - - - 480 100 - - - - 480 0 B. Infrastructure 1. Economic Tree Crops 20,770 92 - - - - 1,903 8 - - 22,673 13 2. Ecological Forestry 7,560 76 ------2,359 24 9,919 5 C. Carbon Readiness and Education Shaanxi - - 700 100 ------700 0 D. Ecological Forestry Center - - 1,000 100 ------1,000 1 E. Office Equipment 436 36 451 37 - - - - 330 27 1,217 1 F. Vehicles ------3,441 100 3,441 2 G. Training 1,788 59 587 19 - - - - 647 22 3,022 2 H. Design, Monitoring, Evaluation ------8,424 100 8,424 5 I. Contingencies ------9,650 100 9,650 5 J. Interest During Construction d ------1,114 8 13,727 92 14,841 8 d K. Commitment Charges ------50 100 50 0 TOTAL 100,000 55 5,100 3 17,855 10 12,741 7 44,993 25 180,689 100 a Includes taxes and duties of $6.4 million financed from government and ADB resources. b In end 2010 prices. c Includes contingencies computed at 5% base costs. Price contingencies were computed based on ADB-prescribed (international and national) price escalation factors; and include provisions for potential foreign exchange rate fluctuations under the assumption of a purchasing power parity exchange rate. d Interest during construction was computed at 5-year fixed swap rate, plus a spread of 0.3%. Commitment charges were computed at 0.15% per annum of undisbursed funds. e ADB loan and GEF grant will be used to finance bank charges. f Households will contribute be in in-kind contributions of labor. Note: Figures may not add up due to rounding off.
17
B. Allocation and Withdrawal of Loan and Grant Proceeds
TABLE
ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS (Forestry and Ecological Restoration Project in Three Northwest Provinces)
CATEGORY ADB FINANCING BASIS Total Amount Allocated Percentage of ADB for ADB Financing Financing from the Loan Number Item $’000 Account Category Subcategory 1 Works 97,776
Crop inputs – tree 1A crops 65,994 81% of total expenditure
Crop inputs – 1B forestry 3,452 56% of total expenditure
Infrastructure – 1C tree crops 20,770 92% of total expenditure
Infrastructure – 1D forestry 7.560 76% of total expenditure
2 Capacity Building 1,788 59% of total expenditure
3 Equipment 436 36% of total expenditure
Total 100,000
18
ALLOCATION AND DISBURSEMENT OF GEF GRANT PROCEEDS (Forestry and Ecological Restoration Project in Three Northwest Provinces)
CATEGORY AMOUNT GEF FINANCING ALLOCATED ($’000) Number Item Category Percentage and Basis for Withdrawal from the Grant Account 1 Works-Crops inputs-forestry 2,362 38% of total expenditures 2 Shaanxi Carbon Readiness 700 100% of total expenditures* Education 3 Shaanxi Ecological Forestry 1,000 100% of total expenditures* Center 4 Equipment 451 37% of total expenditures 5 Training 587 19% of total expenditures Total 5,100
* Excluding any local taxes and duties
C. Contract and Disbursement S-curve
Contract Awards & Disbursement S-curve 120
100
80
60 Contract Awards 40
(million US) 20 Disbursements
0 2011 2012 2013 2014 2015 2016 Contract Awards & Disbursement Contract Year
19
D. Fund Flow Diagram
Global Environment Facility Grant (GEF)a Other Possible Grantsb
Memorandum of Understanding Asian Development Bank (ADB)
Loan: Loan Agreement Financing LIBOR-based rate Agreement 25 years with 5-year grace period
Government of the People's Republic of China (Ministry of Finance) Relending: Subsidiary Loan Agreement LIBOR-based rate 25 years with 5-year grace period
State Forestry Administration (ADB Loan Project Management Office)
National Project Management Office
(For the ADB Loan, an imprest account will be established in each of the three provinces Provincial Governments/ (For the GEF and other and maintained by their Implementing Agencies possible grants, imprest respective department of (Departments of Finance) accounts will be finance.) established separately and monitored by the Provincial Project Management Offices provinces. Onlending: Onlending Agreement ((in local currency and/or in dollars) LIBOR-based rate 25 years with 5-year grace period Municipal and County Governments (Municipal and County Finance Bureaus) Onlending: l Onlending Agreement (in local County Project Management Offices currency and/or in dollars Legend: Interest rate similar to ADB with additional 0.2% spread ADB loan funds 25 years for households, 15 years GEF grant funds for enterprises, and 25 years for state forest farms with 5-year grace Beneficiary Households, Enterprises, and State Forest Farms Other grant funds
LIBOR = London interbank offered rate. a GEF grant funds will be administered by ADB. Withdrawal applications will be submitted to ADB for processing and payment. b Climate Change and Gender and Development Cooperation Funds will be administered by the ADB. Source: Asian Development Bank.
20
V. FINANCIAL MANAGEMENT
A. Financial Management Assessment
29. A financial management assessment of SFA and the implementing agencies was undertaken during the feasibility study stage and concluded that they satisfy ADB's financial management requirements for the executing agency and implementing agencies; and have satisfactory financial management capability.
B. Disbursement
30. The proceeds of the loan and grant will be disbursed in accordance with ADB’s Loan Disbursement Handbook (January 2007, as amended from time to time),5 and detailed arrangements agreed upon between the government and ADB. Pursuant to ADB's Safeguard Policy Statement (2009),6 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the Safeguard Policy Statement. All financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list (Appendix 5) to subprojects financed by ADB.
31. To facilitate project implementation and flow of funds, three imprest accounts for the loan, one in each province, will be set up in commercial banks acceptable to ADB upon loan effectiveness, managed by the provincial department of finance (DOF).7 The initial advance of the imprest accounts will not exceed either 6 months of estimated expenditures to be financed through the respective imprest accounts or 10% of the loan amount allocated to each province, whichever is lower. The direct payment procedure will be used for large contracts. However, if the government initially funds eligible expenditures from its own resources, the reimbursement procedure will be used. Force account works will be used for planting inputs and labor for economic tree crop and ecological forestry development. To expedite the flow of funds and simplify documentation process, the statement of expenditures (SOE) procedure will be used at the provincial level for liquidation and replenishment of imprest accounts and reimbursement of eligible expenditures not exceeding $200,000 per individual payment. SOE procedure will also be used at the county level for reimbursement of eligible expenditures not exceeding $200,000 per individual payment. SOE records should be maintained and made readily available for review by ADB's disbursement and review mission or upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit.8 The payments in excess of SOE ceiling will be reimbursed, liquidated, or replenished based on full supporting documentation process. The county finance bureaus will disburse to enterprises, households, and SFFs on a needs basis, which will be determined in relation to their approved workplans and may include either one-time disbursement or annual installments.
32. Each province will, through its DOF, be responsible for the management of the finances for the part of the project in its own province. The proceeds of the loan will be released from the DOF to the municipal and county finance bureaus, on the basis of the recommendations of
5 Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf 6 Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf 7 Bank charges will be financed from the loan resources. 8 Checklist for SOE procedures and formats are available at: http://www.adb.org/documents/handbooks/loan_disbursement/chap-09.pdf http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Contracts-100-Below.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Contracts-Over-100.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Operating-Costs.xls http://www.adb.org/documents/handbooks/loan_disbursement/SOE-Free-Format.xls
21
PPMOs, and in turn disbursed to the subborrowers. The disbursement, repayment, and other financial activities will be channeled through the relevant finance bureaus for the subprojects undertaken by the subborrowers (e.g., enterprises, households, and SFFs). Each province will, through its DOF, process loan withdrawal applications, following their preparation by the PPMOs and upon certification by the PPMOs that the works or procurements have been carried out in an acceptable standard. Each province, through its DOF, will authorize the release of funds to the county finance bureaus, where they can be withdrawn by the subborrowers. The proceeds of the loan advanced to the county finance bureaus will be repaid to the provincial DOFs.
33. For the disbursement of the GEF grant, a separate imprest account will be set up by each participating province in a commercial bank acceptable to ADB upon the grant effectiveness.9 The SOE procedure will be used at the provincial level for liquidation and replenishment of the GEF imprest accounts and reimbursement of eligible expenditures not exceeding $100,000 per individual payment. SOE procedure will also be used at the county level for reimbursement of eligible expenditures not exceeding $100,000 per individual payment. Disbursements exceeding this amount will be supported by full supporting documentation. The initial advance to the GEF imprest accounts will not exceed the estimated expenditures for the 6 months of implementation or 10% of the grant amount allocated to each province, whichever is lower.
34. Before the submission of the first withdrawal application, the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is $100,000, unless otherwise approved by ADB. The provincial finance department on behalf of the borrower will consolidate claims to meet this limit for reimbursement and imprest account claims. Withdrawal applications and supporting documents need to demonstrate, among other things, that the goods and/or services claimed for payment under the loan and grant were produced in or from ADB members, and are eligible for ADB financing.
35. Funds flow and disbursement arrangements between provincial governments (including provincial finance bureau and the PMO); county governments (including the county PMOs and finance bureaus); and project beneficiaries, contractors, suppliers are detailed in the table below.
Procedures Funds Flow and Disbursement Arrangements Direct Payment (i) County finance bureaus will collect required supporting documents directly from contractors and/or suppliers or through the county PMO for submission to the PPMO for review and then to the provincial finance department. Supporting documents will include contracts and invoices. (ii) The provincial finance department will submit to ADB a signed withdrawal application for direct payment attaching the summary sheet and required supporting documents. (iii) ADB will pay the contractors, consultants, and/or suppliers directly to their bank account. Reimbursement (i) County finance bureaus will collect required supporting documents (contracts and invoices) through the county PMO for submission to the PPMO for review and then to the provincial finance department for request for payment . (ii) County finance bureaus will collect required supporting documents (onlending agreements between county governments and state farms, enterprises and farmers, and the county government's inspection report) through the county PMO for submission to the PPMO for review and then to the provincial finance department for request for payment.
9 Bank charges will be financed from the GEF grant resources.
22
Procedures Funds Flow and Disbursement Arrangements (iii) The provincial finance department upon review and payment approval of the eligible expenditures will pay the county finance bureaus from its own resources. Upon receipt of payment, county finance bureaus will pay the suppliers, contractors, state farms, enterprises and farmers. County finance bureaus will collect evidence of payment and prepare a summary of expenditures for submission to the provincial finance department using the following: a. SOE sheet for expenditures not exceeding the SOE ceiling of $200,000. b. Summary sheet with supporting documents mentioned above, including evidence of payment to the contractors, suppliers, for expenditures exceeding the SOE ceiling of $200,000. (iv) The provincial finance department will submit to ADB a signed withdrawal application for reimbursement attaching SOE sheets or summary sheets (as required) on a per county basis. (v) ADB will reimburse funds to the bank account of the provincial finance department. Imprest Fund (i) The provincial finance department will open an imprest account at a commercial bank acceptable to ADB. The commercial bank will issue a comfort letter, which will be submitted by the provincial finance department to ADB. (ii) County PMOs through county finance bureaus will prepare estimated expenditures for the first 6 months of project implementation for submission to the PPMO for review and then to the provincial finance department. (iii) The provincial finance department will submit to ADB a signed withdrawal application for initial advance to the imprest account attaching a summary of estimates of expenditures and the estimate of expenditures sheets prepared by the county PMOs through finance bureaus. (iv) ADB will disburse initial advance to the imprest account. (v) County finance bureaus will collect required supporting documents (contracts and invoices) through the county PMO for submission to the PPMO for review and then to the provincial finance department for request for payment. (vi) County finance bureaus will collect required supporting documents (onlending agreements between county governments and state farms, enterprises and farmers, and the county government's inspection report) through the county PMO for submission to the PPMO for review and then to the provincial finance department for request for payment. (vii) The provincial finance department upon review and payment approval of the eligible expenditures will pay the county finance bureaus from the imprest account. Upon receipt of payment, county finance bureaus will pay the suppliers, contractors, state farms, enterprises and farmers. County finance bureaus will collect evidence of payment and prepare a summary of expenditures for submission to the provincial finance department using the following: a. SOE sheet for expenditures not exceeding the SOE ceiling of $200,000. b. Summary sheet with supporting documents mentioned above, including evidence of payment to the contractors, suppliers, for expenditures exceeding the SOE ceiling of $200,000. (viii) The provincial finance department will submit to ADB a signed withdrawal application for replenishment of imprest account attaching SOE sheets or summary sheets (as required) on a per county basis, including bank statement and imprest account reconciliation statement. (ix) ADB will liquidate and replenish the imprest account. ADB = Asian Development Bank, PMO = project management office, SOE = statement of expenditures.
C. Accounting
36. All agencies involved in project implementation will maintain separate records and accounts for the loan and the grant that identify goods and services financed from the loan and grant proceeds, financing resources received, expenditures incurred, and use of local funds. These accounts will be established and maintained in accordance with sound accounting principles and internationally accepted accounting standards.
37. Enterprises participating in the project and in receipt of loan funds will have their accounts audited and their financial statements prepared in accordance with international financial reporting standards by auditors acceptable to ADB. Enterprises will make their financial
23 statements available to the county finance bureaus within 3 months of the end of each financial year.
D. Auditing
38. The borrower will cause the detailed consolidated project accounts to be audited in accordance with International Standards on Auditing by an auditor acceptable to ADB. The audited accounts will be submitted in English to ADB within 6 months of the end of the fiscal year by the executing agency. The annual audit report will include a separate audit opinion on the use of the imprest accounts and the SOE procedures (as applicable). The government and the executing agency have been made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures.
39. The GEF and other grant accounts will be audited annually, and one consolidated report for each fund covering the participating provinces will be prepared by the NPMO and submitted to ADB. Grant audit reports will include a separate auditor's opinion on the use of SOE and imprest account procedures.
VI. PROCUREMENT AND CONSULTING SERVICES
A. Advance Contracting and Retroactive Financing
40. All advance contracting and retroactive financing will be undertaken in conformity with ADB’s Procurement Guidelines (April 2010, as amended from time to time)10 and ADB’s Guidelines on the Use of Consultants (April 2010, as amended from time to time).11 The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. The borrower, and the executing and implementing agencies have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the project.
41. The government and the provinces requested retroactive financing to enable early procurement of goods, works, and services related to spring 2011 planting of economic tree crops and ecological forests. The details of activities to be financed will be set out in a written request to ADB with justification for each activity provided. The mission advised that retroactive financing could only apply to up to 20% of the ADB loan, and accordingly up to 20% of the allocation for each province with respect to expenditures incurred not earlier than 12 months before the signing of the loan agreement. The executing agency and the implementing agencies have the capacity for undertaking advance contracting given their experience in the implementation of the World Bank-financed projects. All contracts proposed for advance contracting and retroactive financing will be awarded and administered in accordance with ADB’s Procurement Guidelines. The government and the provinces were advised that approval of this request does not commit ADB to financing the project.
10 Available at: http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf 11 Available at: http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf
24
B. Procurement of Goods, Works, and Consulting Services
1. Procurement
42. All procurement of goods and works will be carried out in accordance with ADB's Procurement Guidelines. Contracts for goods estimated to exceed or equal to $1 million and contracts for works estimated to exceed or equal to $10 million will be procured using international competitive bidding procedures. Contracts for goods and works estimated to cost less than the international competitive bidding values but more than $200,000 for goods and $200,000 for works, will be procured through national competitive bidding procedures in accordance with the PRC Tendering and Bidding Law, 1999, subject to modifications agreed with ADB. Force account will be established for the planting inputs and labor for the economic tree crop and ecological forestry component. Contracts for goods estimated to cost $200,000 and less, and works estimated to cost $200,000 or less will be procured using shopping procedures. The relevant sections of ADB’s Anticorruption Policy (1998, as amended to date) will be included in all procurement documents and contracts.
2. Consulting Services
43. Consulting services will support the implementation of the ecological forestry component, including (i) assistance to the EFC and the Carbon Readiness and Education in Shaanxi, with the use if GEF financing; and (ii) training in Gansu and Xinjiang for pest identification, use of pesticides, and integrated pest management, which will be financed by loan and counterpart funds. The EFC will be supported with 7 months of international consulting services and 18 months of national consulting services to help the SFFs establish new business plans and identify suitable private investors, and provide assistance to the provincial project management office to design and test a negotiating framework that will assist the Shaanxi forestry department and the SFFs to negotiate payments for ecological services, and meet the criteria to enter into a suitable international carbon market. Recruitment will be through the individual consultant selection method. This method will enable the effective recruitment of highly qualified experts in these areas and is considered the most cost-effective method for the small number of consultants required. The Carbon Readiness and Education component will be supported by a national consulting firm, which will be recruited using the quality- and cost-based selection method (80:20) with simplified technical proposals. Recruitment is limited to national consulting firms because only national firms are qualified to conduct the required training. Detailed design will be carried out by carbon forestry assessment and audit experts. Training institutes will be engaged following a single-source selection method due to the limited resource persons providing training services in the provinces. In addition, contract amounts are very small at $100,000 or less per contract, that consulting firms may not express interest in participating. This method will enable the most timely, efficient, effective, and low-cost implementation of the training component. All recruitment will be carried out following ADB’s Guidelines on the Use of Consultants.
25
C. Procurement Plan
INITIAL PROCUREMENT PLAN Project Information Project Name Forestry and Ecological Restoration Project in Three Northwest Provinces Country People's Republic of China Loan Amount $100 million Executing Agency State Forestry Administration Date of First Procurement Plan To be determined Date of this Procurement Plan To be determined
A. Process Thresholds, Review, and 18-Month Procurement Plan
1. Project Procurement Thresholds Method Threshold Goods and Related Services and Works ● International Competitive Bidding (ICB) for Above or equal to $10,000,000 works ● ICB for goods Above or equal to $1,000,000 ● National Competitive Bidding (NCB) for Below $10,000,000 but more than $200,000 worksa ● NCB for goodsa Below $1,000,000 but more than $100,000 ● Shopping for worksb Below or equal to $200,000 ● Shopping for goodsb Below or equal to $100,000 ● Force account Below or equal to $100,000 Consulting Services ● Quality- and cost-based selection (QCBS) c At least $200,000 ● Single-source selection None ● Individual consultant selection None a NCB procedures are described in Section C of this Procurement Plan. b For the procurement of items below $10,000, the executing and implementing agencies may purchase the items directly from the supplier and in such cases, ADB should be satisfied that the price paid is reasonable. c Thresholds for proposals: Full technical proposal >$1,000,000; simplified technical proposal >$600,000–
2. ADB Prior or Post Review Procurement Prior Comments Method or Post Procurement of Goods and Works ICB for works Prior For ICB, invitations for bids, invitations for prequalification, draft prequalification ICB for goods Prior documents, draft bidding documents, prequalification, and bid evaluation reports will be submitted to ADB for prior review and approval. Use of this method is subject to ADB’s Procurement Guidelines (2007, as amended from time to time) and Project Administration Instruction (PAI) 3.03.
NCB for works Prior/ For NCB, the first draft English version of the procurement documents should Post be submitted to ADB for review and approval regardless of the estimated NCB for goods Prior/ contract amount. ADB-approved procurement documents should be used as a Post model for all NCB procurement financed by ADB for the project, and need not be subject to further review. ADB will review the bid evaluation report and award of contract on a post-review basis. Use of this method is subject to the provisions of the NCB Annex; ADB’s Procurement Guidelines, paras. 3.3─3.4; and PAI 3.04, paras. 2–3. Prior review applies to the first three NCB contracts conducted by the project executing and/or implementing agency or procurement agent, irrespective of value.
Shopping for Works Post For shopping (including direct contracting), ADB will normally review the award Shopping for Goods Post of contract on a post-facto basis. Use of this method is subject to ADB’s Procurement Guidelines, para. 3.5, and PAI 3.04, paras. 4 and 5.
Force Account Prior/ Exceptional method only applied in accordance with ADB’s Procurement
26
Procurement Prior Comments Method or Post Post Guidelines, para. 3.8, and PAI 3.05, paras. 7–9. Prior review applies to the first contract to be awarded. Use of the procedure is based on the understanding that (i) the planting inputs and labor are required to be mobilized in a short span of time to meet the planting season, (ii) executing agency has the necessary in- house manpower to undertake the labor requirements, and (iii) there are no other suppliers in the project area that can supply the planting inputs and labor.
Recruitment of Consulting Services QCBS (80:20) Prior The executing agency selects and engages the consultant; and makes four submissions to ADB for approval: (i) draft shortlist and draft request for proposal; (ii) technical proposal evaluation report; (iii) overall (technical and financial) ranking report; and (iv) draft contract following Guidelines on the Use of Consultants (2007, as amended from time to time).
Single-source selection Prior The executing agency selects a firm without conducting a competition by inviting one consultant to submit a technical and a financial proposal, following ADB's Guidelines on the Use of Consultants and in accordance with PAI 2.02A, paras. 45–46.
Individual selection Prior The executing agency selects a consultant directly or through an organization by competition, following ADB's Guidelines on the Use of Consultants and in accordance with PAI 2.03B. ADB = Asian Development Bank, ICB = international competitive bidding, QCBS = quality- and cost-based selection.
3. Goods and Works Contracts Estimated to Cost More Than $1 Million Contract Prequali- Advertisement Value fication Date (cumulative) Procurement of Bidders (quarter/year) General Description $'000 Method (Y/N) Comments A. Goods 1. Vehiclesa (a) Gansub 1,362 Non ADB N Within 18 1 contract financed (NAF) months (b) Shaanxic 1,933 NAF N Within 18 1 contract months ADB = Asian Development Bank, N = no, Y = yes.
4. Consulting Services Contracts Estimated to Cost More Than $100,000 Contract Prequali- Value fication Advertisement (cumulative) Procurement of Bidders Date General Description $'000 Method (y/n) (quarter/year) Comments A. Project Design, Monitoring, and Evaluation 1. Gansu 1,947 NAF No Within 18 months 2 contracts 2. Shaanxi 4,250 NAF No Within 18 months 2 contracts 3.Xinjiang 2,227 NAF No Within 18 months 2 contracts B. Consulting Services Shaanxi (GEF-financed) 1. Ecological Forestry Center 670 Individual NA Within 18 months 9 contracts Consultant Selection 330 NCB NA Within 18 months 1 contract 2. Carbon readiness/educ.a 700 QCBS (80:20) NA Within 11 months 1 contract; national consulting firm GEF = Global Environment Facility, n = no, NAF = non Asian Development Bank-financed, NCB = national competitive bidding, QCBS = quality- and cost-based selection, y = yes. a Shaanxi PMO will create an ecological forestry center, which will contract for consultancy services and training.
27
5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000 Value of Number of Procurement Comments Contracts Contracts and/or General (cumulative) Recruitment Description $'000 Method A. Goods 1. Planting Inputs and Labora (a) Gansu - Economic trees 23,236 240 Force account - Economic trees 2,611 9 NCB - Ecological forests 4,257 43 Force account - Ecological forests (GEF-financed) 992 10 Force account (b) Shaanxi - Economic trees 15,225 155 Force account (c) Xinjiang - Economic trees 16,591 166 Force account - Economic trees 543 1 NCB - Ecological forests (GEF-financed) 1,370 16 Force account 2. Office Equipment - Gansub 431 1 NCB - Shaanxi c 299 4 Shopping - Xinjiang 487 6 Shopping 3. Vehicles - Xinjiang d 146 1 NAF B. Works 1. Gansue - Cold storage and processing facilities 2,960 8 NCB 2. Shaanxi - SFF ecotourism facilitiesf 9,919 21 NCB 3. Xinjiang - Irrigation infrastructure 16,873 10 NCB C. Trainingg 1. Gansu (provinces, municipalities, 878 25 Single-source counties, and households selection 2. Shaanxi (provinces, counties, and 900 5 Single-source households) selection 3. Xinjiang (provinces, counties, and 1,244 16 Single-source households) selection GEF = Global Environment Facility, NCB = national competitive bidding, NAF = non Asian Development Bank- financed, a Planting inputs for economic trees and ecological forests will be contracted by the county project management offices to their respective county forestry nurseries, and will be distributed to households who agreed to participate in the project and to pay the planting inputs. Labor will be paid by the county finance bureaus to the participating households. The cost of labor in this table only includes those cash payments that the project plan has budgeted to be made to households. There is a considerable amount of household equity (labor-in-kind) that will be supplied to plant trees and this requires no procurement. b Provincial project management office: desktop computers, laptops, printer, digital camera, scanner, fax machine, and filing cabinet. c Provincial project management office: computer, laptop, printer, digital camera, scanner, fax machine, filing cabinets. Municipal project management office: computer, and digital camera. County project management office: computer, printer, photocopier, digital camera, fax machine, and filing cabinets. d Provincial project management offices (2), municipal and county project management offices (1). e Gansu storage and processing enterprises will issue one contract for construction of their facilities. This contract will have several sub-contracts. f Infrastructure for mulberry worms will be contracted by the three counties involved. g Training will be contracted by the provincial project management office and the county project management offices in each province.
28
B. Indicative List of Packages Required under the Project Estimated Estimated Domestic Value Number of Procurement Preference General Description ($'000) Contracts Method Applicable Comments A. Goods 1. Planting Inputs and Labor (a) Gansu - Economic trees 35,748 360 Force account No Covering 17,977.5 hectares (ha) in 18 counties - Economic trees 2,611 9 NCB No Cold storage and processing equipment - Ecological forests 4,257 43 Force account No Covering 2,984 ha in 2 counties - Ecological forests 992 10 Force account No Covering 695 ha in 4 (GEF-financed) counties (b) Shaanxi - Economic trees 32,596 390 Force account No Covering 15,048 ha in 23 counties (c) Xinjiang - Economic trees 29,994 300 Force account No Covering 6,015 ha in 5 counties - Economic trees 543 1 NCB No Agricultural production equipment and materials - Ecological forests 1,370 16 Force account No Covering 435 ha (GEF) (GEF-financed) in 2 counties 2. Office Equipment (a) Gansu 431 1 NCB No 1 PPMO contract (b) Shaanxi 299 4 Shopping No 4 PPMO contracts (c) Xinjiang 487 6 Shopping No 6 PPMO contracts 3. Vehicles (a) Gansu 1,362 1 NAF No 1 PPMO contract (b) Shaanxi 1,933 1 NAF No 1 PPMO contract (c) Xinjiang 146 1 NAF No 1 PPMO contract B. Works (a) Gansu 2,960 8 NCB No Cold storage and processing facilities (b) Shaanxi 9,919 21 NCB No SFF ecotourism facilities (c) Xinjiang 16,873 10 NCB No Irrigation infrastructure C. Services 1. Training (a) Gansu–provinces, 878 25 Single-source No 5 PPMO contracts, 20 municipalities, counties, selection counties with 1 contract and households each (b) Shaanxi–provinces, 900 35 Single-source No 5 PPMO contracts, 30 counties and households selection counties with 1 contract each (c) Xinjiang –provinces, 1,244 16 Single-source No 6 PPMO contracts, 5 counties and households selection counties with 2 contracts each 2. Project Design, Monitoring, and Evaluation (a) Gansu 1,947 2 NAF No 2 PPMO contracts (b) Shaanxi 4,250 2 NAF No 2 PPMO contracts (c) Xinjiang 2.227 2 NAF No 2 PPMO contracts 3. Shaanxi (GEF-funded) (a) Ecological Forestry 670 5 Individual No 9 PPMO contracts Center Consultant Selection
29
Estimated Estimated Domestic Value Number of Procurement Preference General Description ($'000) Contracts Method Applicable Comments (b) Ecological Forestry 330 1 NCB No 1 PPMO contract for Center office equipment (c) Carbon readiness 700 1 QCBS; No 1 PPMO contract and education national consulting firm GEF = Global Environment Facility, NAF = non Asian Development Bank-financed, NCB = national competitive bidding, QCBS = quality- and cost-based selection, PPMO = provincial project management office, SFF = state forest farms. Notes: (1) All costs are base costs, expected to be spent over the 5-year project life. (2) Base costs exclude inflation, physical contingency, price contingency, interest during implementation, and commitment fees. Base costs were derived from the costab EXCOMF and detail investment tables for the project. (3) The costs in this project include those from ADB loan, GEF funds, and various government counterpart funds. Not included is the cost of potential grant from the ADB Climate Change Fund.
C. National Competitive Bidding
44. The Borrower’s Law of Tendering and Bidding of the People’s Republic of China promulgated by Order No. 21 of the President of the People’s Republic of China on 30 August 1999, are subject to the following clarifications required for compliance with ADB's Procurement Guidelines (April 2010, as amended from time to time):
(i) All invitations to prequalify or to bid shall be advertised in the national press, or official gazette, or a free and open-access website in the Borrower’s country. Such advertisement shall be made in sufficient time for prospective bidders to obtain prequalification or bidding documents, and prepare and submit their responses. In any event, a minimum preparation of 30 days shall be given. The preparation period shall count (a) from the date of advertisement; or (b) when the documents are available for issue, whichever date is later. The advertisement, prequalification, and bidding documents shall specify the deadline for such submission. (ii) Qualification requirements of bidders and the method of evaluating the qualification of each bidder shall be specified in detail in the bidding documents, and in the prequalification documents, if the bidding is preceded by a prequalification process. (iii) If bidding is preceded by a prequalification process, all bidders that meet the qualification criteria set out in the prequalification document shall be allowed to bid and there shall be no limit on the number of pre-qualified bidders. (iv) All bidders shall be required to provide a performance security in an amount sufficient to protect the borrower and/or project executing agency in case of breach of contract by the contractor, and the bidding documents shall specify the required form and amount of such performance security. (v) Bidders shall be allowed to submit bids by mail or by hand. (vi) All bids shall be opened in public; all bidders shall be afforded an opportunity to be present (either in person or through their representatives) at the time of bid opening, but bidders shall not be required to be present at the bid opening. (vii) All bid evaluation criteria shall be disclosed in the bidding documents and quantified in monetary terms, or expressed in the form of pass or fail requirements. (viii) No bid may be rejected solely on the basis that the bid price falls outside any standard contract estimate, or margin, or bracket of average bids established by the borrower and/or project executing agency.
30
(ix) Each contract shall be awarded to the lowest evaluated responsive bidder, that is, the bidder who meets the appropriate standards of capability and resources and whose bid has been determined (a) to be substantially responsive to the bidding documents, and (b) to offer the lowest evaluated cost. The winning bidder shall not be required, as a condition of award, to undertake responsibilities for work not stipulated in the bidding documents or otherwise to modify the bid as originally submitted. (x) Each contract financed with the proceeds of the loan shall provide that the suppliers and contractors shall permit ADB, at its request, to inspect their accounts and records relating to the performance of the contract, and to have said accounts and records audited by auditors appointed by ADB. (xi) Government-owned enterprises in the borrower’s country may be permitted to bid if they can establish that they (a) are legally and financially autonomous, (b) operate under commercial law, and (c) are not a dependent agency of the borrower and/or project executing agency. (xii) Re-bidding shall not be allowed solely because the number of bids is less than three.
D. Consultant's Terms of Reference
45. Training institutes will conduct a site specific-based training on types of economic tree crops and ecological forest area for the three provinces. The national consulting firm will support the carbon readiness and education component, and assist to build organizational capacity for carbon sequestration, ecological forest management, eco-tourism and public–private partnerships to achieve development results and outcome of the project. Individual consultants will help establish, staff, and make operational the proposed EFC that will help with SFF reforms, carbon sequestration, and market readiness. The TORs of the five main experts are detailed in the next paragraphs.
46. Enterprise business planning expert (international, 2 person-months). The expert will assist the EFC and the seven SFFs in Shaanxi to develop commercially viable business plans for new business ventures that rely on the ecological forest assets of the SFFs. The consultant will have a post-graduate degree in business or a related field, experience in business strategy and development, understanding and experience in business capital structures and capital- raising, and experience in organizational development and training. The expert will (i) review existing business enterprises already based in Shaanxi; (ii) with the participating SFFs, develop a range of business sectors and specific business opportunities that could be possible to establish; (iii) with each SFF, design and complete a market analysis and marketing plan for the specific business opportunities; (iv) for each SFF, complete a business strategy, including capital and operating plans, pro-forma financial statements, and a financing and capital-raising plan; (v) establish criteria for EFC to review the proposed business strategy of each SFF; and (vi) provide recommendations to EFC on providing project funding to each SFF proposed enterprise investment, including amount, terms, etc.
47. Carbon sequestration and trading (international, 3 person-months). The expert will assist EFC to develop carbon forestry in the seven SFFs in Shaanxi. The consultant will have a post-graduate degree in forestry or a related science, understanding and experience of forest management in temperate climate zones, experience in measuring carbon stocks and growth rates, and understanding and experience of international carbon certification systems and
31 carbon markets. The consultant will (i) facilitate the creation of carbon ownership agreement between the EFC and SFFs; (ii) design processes for data collection and validation on carbon storage and management of the forest for carbon; (iii) coordinate development of the nationally relevant carbon accounting methodology and framework; (iv) coordinate the data collection and storage in the management information system to be used by EFC; (v) provide training to stakeholders; and (vi) assist with third party audits.
48. Payments for ecological services expert (international, 2 person-months). The expert will assist the PPMO develop values for ecological services provided by the ecological forests of the SFFs (such as protection of drinking water reservoirs) and develop a negotiation strategy for the PPMO to pursue with agencies who benefit from the service. The consultant will have a postgraduate degree in economics, law, or a related field; experience in designing approaches to payments for ecological services (PES); understanding of the legal and institutional environment to enable such payments; and experience in negotiating interagency agreements between agencies. The consultant will (i) review existing PES schemes already in existence in the PRC; (ii) review the legal and institutional environment in Shaanxi and in the PRC that underpins PES; (iii) identify the opportunities for PES in the seven Shaanxi SFFs (excluding carbon forestry) and the government agency that would pay for the ecological services provided; (iv) estimate the economic value of each SFF opportunity, from the standpoint of the SFF and from the standpoint of the proposed paying agency; (v) develop a negotiating strategy for each SFF; (vi) select the highest priority SFFs and work with them as a test case during their negotiations, in conjunction with EFC; and (vii) analyze lessons learned from the first negotiation and conduct a workshop with all of the SFFs and CEF to present recommendations for future negotiations.
49. Enterprise business planning expert (national, 8 person-months). The expert will assist the international consultant in enterprise business planning, EFC, and the seven SFFs to develop commercially viable business plans for new ventures that rely on the ecological forest assets of the SFFs. The consultant will have a post-graduate degree in business or a related field, experience in business strategy and development in the PRC businesses, and experience in business capital structures and capital-raising. The expert will (i) with the international consultant in enterprise business planning and participating SFFs, develop a range of business sectors and specific business opportunities that could be possible to establish; (ii) with the international consultant and each SFF, design and complete a market analysis and marketing plan for the specific business opportunities; (iii) with the international consultant and each SFF, complete a business strategy, including capital and operating plans, pro-forma financial statements, and a financing and capital-raising plan; (iv) develop criteria for selection of companies to partner with each SFF; (v) identify local companies that meet the criteria and would be willing to invest in a new enterpise with an SFF; and (vi) with the international consultant, provide recommendations to EFC on providing project funding to each SFF proposed enterprise investment (amounts, terms, etc.).
50. Carbon sequestration and trading (national, 10 person-months). The expert will assist EFC to develop carbon forestry in the SFF. The consultant will have a post-graduate degree in forestry or a related science, understanding and experience of forest management in temperate
32 climate zones, experience in measuring carbon stocks and growth rates, and understanding and experience of international carbon certification systems and carbon markets. Providing input over 2 years, the expert will (i) assist the international consultant in carbon forestry to facilitate the creation of carbon ownership agreement between EFC and the SFFs; (ii) assist the international consultant to design processes for data collection and validation on carbon storage and management of the forest for carbon; (iii) train provincial forestry department and SFF staff on the nationally relevant carbon accounting methodology and framework, and on methods for data collection and reporting of carbon stocks and growth; (iv) demonstrate the data collection and storage for the management information system to be used by EFC; and (v) participate in the third party audit process.
VII. SAFEGUARDS
51. The project has been prepared as a category B for the environment aspect. During the project preparation, domestic environmental impact assessment reports were prepared for all three provinces in accordance with the PRC regulations. An initial environmental examination report was prepared in accordance with ADB's guidelines. Due diligence review of environmental management practices by the participating enterprises has been undertaken. The review shows that the enterprises comply with all national regulations and apply adequate environmental management procedures acceptable to ADB. Timely approval of the initial environmental examinations by the provincial environmental protection bureaus has been requested.
52. The project is expected to achieve significant environmental benefits, including (i) water savings, (ii) reduced use of agrochemicals (fertilizers and pesticides), (iii) reduced soil erosion, and (iv) increased carbon sequestration both in trees and soils. Carbon sequestration and land improvements are considered significant benefits representative for the overall direct and indirect positive impacts of the project. The project will also enable participating farmers and beneficiaries to better adapt to climate change impacts by introducing sustainable land and management policies.
53. The social assessment revealed that ethnic minority groups live in all five project counties of Xinjiang and that no ethnic groups are involved in the project areas of Gansu and Shaanxi; consequently, the Project is category A for the Indigenous Peoples aspect. The percentage of the minority population in Xinjiang projects areas was found to be 26% in Changji county, 29% in Hami and Korle counties, 46% in Hejing county, and 56% in Yanji county. The minority groups include Hui, Kazakh, Mongolian, Tatar, Uyghur, and Uzbek. According to the survey data, poverty is higher among ethnic minority communities, although they are legally entitled to some specifically targeted support programs. Ethnic minority communities will have equal opportunity to participate in the project. In a community that has a small number of ethnic minority people and a large number of Han people, priority will be given to the minority households. To ensure the participation and benefit of the ethnic minority people, a representative number of ethnic minority households in the project villages will be invited to the stakeholder consultation and village project designing and planning meetings. To enhance the participation of ethnic minority people, consultation workshops, village project information publicity, and invitation and mobilization of the households will be carried out by implementing agencies, enterprises, and county forest bureaus in ethnic minority languages. An ethnic minority development plan (EMDP) has been prepared for Xinjiang project component, which contains adequate provisions to ensure the full participation of ethnic minority people. The
33
EMDP will be implemented through a community consultation and disclosure strategy (CCDS) adapted for Xinjiang's unique cultural environment. The EMDP was endorsed by the XUG and was disclosed to affected communities.
54. The Project is Category C for the involuntary resettlement aspect. Due diligence was conducted and the project design has included measures to avoid involuntary resettlement, including (i) avoidance of basic farmland for forest development; (ii) voluntary participation of farmers, using a community consultative process, who will be direct beneficiaries; (iii) payment of wages to farmers that participate in the project and provide labor inputs; and (iv) no land acquisition will be required for irrigation infrastructure upgrading; and (v) ecological trees will utilize state-owned forest land or hilly and marginal collective land.
VIII. GENDER AND SOCIAL DIMENSIONS
55. Actions and mitigation measures regarding gender and social dimension are designed into the project. An EMDP was prepared that includes a CCDS describing the mitigation and enhancement measures. The EMDP will be implemented in Xinjiang, while the CCDS will be implemented in all project areas. The CCDS will be implemented through the provincial forestry departments, with the county PMOs acting as implementing agencies. The CCDS will create an enabling environment for ethnic minority, poor farmers, and women through appropriate livelihood assessments, cash flow analysis, and risk mitigation measures.
VIII. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION
A. Project Design and Monitoring Framework Performance Targets and/or Data Sources and/or Assumptions Design Summary Indicators Reporting Mechanisms and Risks Impact Average net income of 12th Five-Year Plan Assumption Improved incomes beneficiary households reported achievements, Effective monitoring ensures and sustainable increased by 30%, from CNY and future directions and that enterprises, county livelihoods from the 1,600 in 2010 to CNY 2,080 priorities forestry bureaus, SFFs, and use of forest land in by 2020 forest stations successfully Gansu, Shaanxi, Provincial and county implement the activities and and Xinjiang Protection of ecologically yearbooks and reports sustain benefits. sensitive areas increased by 130,000 ha, from about Project benefit monitoring Risk 180,000 ha in 2010 to about reports Rapid economic growth 310,000 ha by 2020 dominates priorities and pollutes landscape. Rural employment increased by 48,000 jobs by 2020. Outcome Assumption Increased Degraded forest land in the 12th Five-Year Plan Project is implemented as productivity of forest three provinces reduced by reported achievements and designed. lands and reduced 10% in 2010 from about 3.50 future directions and land degradation in million ha to about 3.15 million priorities Risk Gansu, Shaanxi, ha by 2016 Natural disasters, particularly and Xinjiang Provincial and county droughts, and erosion events Forest cover and tree density yearbooks and reports are not effectively mitigated. (stand volume) increased by 3% in Gansu (from 680,000 Forestry department ha to 700,000 ha), 2% in reports Shaanxi (from 735,000 ha to 750,000 ha), and 1% in Xinjiang (from 594,000 ha to 600,000 ha), leading to protection of total carbon stocks of 32 million tons and
34
Performance Targets and/or Data Sources and/or Assumptions Design Summary Indicators Reporting Mechanisms and Risks sequestration of 3.3 tons by 2016. Outputs Assumptions 1. Mainstreamed About 38,000 ha of 13 Provincial and county Demand for fruits and nuts IEM approaches varieties of economic tree yearbooks and reports remains high. applied to economic crops newly planted and tree crop producing fruit on degraded Forestry department Farmers are able to access development forest land in the three reports required support services provinces by 2016. from local government Financial statements of agencies. About 207,000 rural enterprises and households and workers commercial production Risks benefiting directly from the bases Quality control standards production and processing of inadequate to meet domestic economic tree crops by 2016. and international market standards. About 26 enterprises operating profitably by 2016 Forest land tenure contracts and rental agreements not Increased sequestration of secured. about 368,600 tons of carbon in orchards by 2016. Natural disasters seriously disrupt supply of inputs.
2. Mainstreamed About 3,000 ha of degraded Provincial and county Assumptions IEM approaches forest land in Gansu restored; yearbooks and reports Forest trees are established applied to ecological protection of carbon stocks of and survive. forestry 2.7 tons and sequestration of Forestry department development 3.3 tons by 2016 reports Forest tree maintenance is provided by county forest At least seven SFFs in PPMO and CPMO benefit bureaus and financing is Shaanxi improve tree cover monitoring reports made available by county and density on about 126,000 finance bureaus. ha; protection of carbon Reports and audited stocks of 28.8 tons and statements from SFFs Commercial ecotourism sequestration of additional 1 revenue is generated for ton of carbon by 2016 SFFs to operate profitably.
Risk Ecological forestry center Public–private partnerships providing support to SFFs in fail due to unsound forestry management and management, illegal carbon trading corporate practices, and operational neglect, or GEF financing: (i) about natural disaster. 700 ha of degraded steeply sloping forest land in Gansu restored, (ii) about 1,000 ha of degraded forest land secured in Xinjiang, and (iii) carbon forestry improvements made on about 12 SFFs in Shaanxi and Gansu; protection of 6,000 tons of carbon and sequestration of 5,000 tons in Xinjiang by 2016 3. Project PPMOs and CPMOs Project reports and management established and operating in monitoring support each province and county strengthened to Benefit and impact implement forest Enhanced capacity of monitoring sector reforms using households and implementing
35
Performance Targets and/or Data Sources and/or Assumptions Design Summary Indicators Reporting Mechanisms and Risks IEM approaches in agencies in implementing IEM Training records the provinces, approaches; about 200,000 Procurement records counties, towns, and households received training households in IEM. Activities with Milestones Inputs ($ million) ADB loan $100.00 1. Advance Actions 1.1 Draft all project management procedures. Item: Amount ($ million) 1.2 Design and implement PPMS. Economic Tree 1.3 Update procurement plan for approval by the State Forestry Administration and Crops 86.76 ADB. Ecological Forestry 11.01 1.4 Prepare household and enterprise loan agreements. Project Management 1.5 Identify economic planting areas and household planting plans. Support 2.23 1.6 Ratify year 1 tree planting plans. Provincial, Municipal, 1.7 Prepare project training plan. and County 1.8 Train project management staff in ADB procedures and systems. Governments $44.99 1.9 Agree and jointly train with county finance officials on procedures and Item: Amount ($ million) documentations. Economic Tree Crops 12.60 2. Project Year 1 Ecological Forestry 5.49 2.1 Implement procurement plan. Project Management 2.2 IEE and EMDP implementation started Support 26.90 2.3 Initiate beneficiary training. 2.4 Plant about 21,000 ha of economic tree crops. Enterprises $12.74 2.5 Prepare year 2 planting plans. Item: Amount ($ million) 2.6 Approve ecological forestry center establishment in Shaanxi. Economic Tree 2.7 Monitor survival rates on economic tree planted areas. Crops 12.74 2.8 Prepare county ecological planting plans starting year 2. Households $17.86 2.9 Approve enterprise development plans by PPMO and award. Item: Amount ($ million) 2.10 Contract business planning procedures for each pilot SFF. Economic Tree 2.11 Design carbon administration system and start training. Crops 17.38 3. Project Year 2 Ecological Forestry 0.48 3.1 Continue beneficiary training. GEF Grant $5.10 3.2 IEE and EMDP implemented Item: Amount ($ million) 3.3 Plant about 13,900 ha of economic tree crops. Ecological Forestry 3.06 3.4 Plant about 2,640 ha of ecological forests. Project Management 3.5 Plant replacement economic trees. Support 2.04 3.6 Staff and operate ecological forestry center. 3.7 Disburse value chain enterprise loans. Total 180.69 3.8 Monitor planting and survival. 3.9 Approve SFF business plans and identify private sector investors. 3.10 Establish carbon database and MIS. 3.11Complete social monitoring. 4. Project Year 3 4.1 Complete beneficiary training. 4.2 IEE and EMDP implementation completed 4.3 Plant about 3,100 ha of economic tree crops. 4.4 Plant about 1,250 ha of ecological forest trees. 4.5 Monitor and evaluate planting program. 4.6 Design carbon trade. 4.7 Design payment for ecological services schemes. 4.8 Complete PPP design and have it agreed by all parties. 4.9 Complete midterm monitoring report. 5. Project Year 4 5.1 Plant about 810 ha of ecological forest trees. 5.2 Continue tending of trees. 5.3 Implement SFF enterprise investments. 5.4 First carbon trade. 6. Project Year 5 6.1 Monitor project activities.
36
6.2 Complete training of implementing agency staff. 6.3 Continue tending of trees. 6.4 Evaluate project outputs and evaluation survey 6.5 Project completion report. 6.6 Conclude carbon trades. ADB = Asian Development Bank, CPMO = central project management office, GEF = Global Environment Facility, ha = hectare, MIS = management information system, PPMO = provincial project management office, PPMS = project performance management systems, PPP = public-private partnership, SFA = State Forestry Administration, SFF = state forest farms.
B. Monitoring
1. Project performance monitoring
56. To monitor the progress of the project in achieving the planned outcome and outputs, the PPMOs and CPMOs will establish and maintain project performance management systems, which will be designed to permit adequate flexibility to adopt remedial action regarding project design, schedules, activities, and development impacts. The PPMOs and CPMOs will adopt the following agreed indicators: (i) physical progress of planting, replanting (based on survival rates), sand fixation, and reforestation of degraded and low production forest lands; (ii) allocation of long-term forest land-use rights to households; (iii) changes in uses of organic and chemical fertilizers and other inputs in fruit and nut orchards; (iv) changes in household, enterprise, and SFF productivity and profitability; (v) improvement of water use and quality in orchards; (vi) reduction of poverty in the project area; (vii) carbon sequestration and trading; and (viii) provision of technical services in the project area. The PPMOs and CPMOs will monitor the progress of implementing the environmental and social safeguard documents and plans (ethnic minority development plan, and community consultation and participation plan) and follow the monitoring and evaluation sections laid out in these plans. Within the project performance management systems framework, the PPMOs and CPMOs will confirm achievable targets, refine monitoring and recording arrangements, and establish systems and procedures no later than 6 months after the start of the project. The PPMOs and CPMOs will collect baseline and progress data, and report to the NPMO at the requisite time intervals. The NPMO will be responsible for analyzing and consolidating the reported data through its management information system and reporting the outcome to ADB through quarterly progress reports.
2. Compliance and safeguards monitoring
57. SFA will be responsible to ensure compliance with environmental safeguards during implementation. Through its project management office, SFA will oversee the monitoring of environmental impact and mitigation measures, and provide technical support and training as well as domestic consultants during implementation.
58. Social safeguards monitoring: The EMDP contains a monitoring framework with indicators and timeframes. The Xinjiang PMO will monitor the implementation of the EMDP and provide bi-annual monitoring reports to ADB. An independent monitoring agency will be hired to monitor the progress and results of EMDP implementation and to prepare and submit semi- annual monitoring reports to Xinjiang EA and ADB. The IAs will also monitor the design and implementation of subprojects to ensure there are no involuntary land acquisition or resettlement impacts. Should the implementation location of any project activity change, the EA will notify ADB and ensure that appropriate safeguards assessments and plans, if required as per ADB’s Safeguard Policy Statement, are prepared and cleared by ADB prior to commencement of the activities.
59. Gender and social dimensions monitoring: The CCDS, which is part of the EMDP, will be implemented and monitored by the Shaanxi, Gansu and Xinjiang PMOs and regular reports will
37 be provided to ADB.
C. Evaluation
60. Within 3 months of physical completion of the project, the executing agency will submit to ADB a completion report that describes the achievements in relation to the project’s expected impact, outcome, and outputs.12
D. Reporting
61. The SFA will provide ADB with (i) semi-annual progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports, including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated procurement plan and (d) updated implementation plan for next 12 months; and (iii) a project completion report within 3 months of physical completion of the project. To ensure projects continue to be both viable and sustainable, project accounts and the executing agency audited financial statements, together with the associated auditor's report, should be adequately reviewed.
62. The national level executing agency will prepare consolidated semi-annual reports indicating progress made, problems encountered during the period, steps taken or proposed to remedy the problems, and a proposed program of activities with progress expected for the next reporting period.
E. Stakeholder Communication Strategy
63. Project information will be communicated through public consultation; information disclosure mechanism in ADB’s and government’s website, meetings, interviews, focus group discussions; and community consultation meetings following ADB’s requirements of information disclosure policy. The households and villages participating in the project will be informed in a culturally appropriate and gender sensitive way about project benefits and potential project risks prior to the project activities. The channels of information will be through village institutions, independent groups, or the Women’s Federations, or others. A Community Consultation and Disclosure Strategy has been prepared as part of Xinjiang EMDP and shall be used as guideline for Stakeholder Communication in all project areas.
X. ANTICORRUPTION POLICY
64. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project.13 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all project contractors, suppliers, consultants, and other service providers. Individuals and/or entities on ADB’s anticorruption debarment list are ineligible to participate in an ADB-financed activity and may not be awarded any contracts under the project.14
65. ADB’s Anticorruption Policy was explained to and discussed with SFA, Gansu, Shaanxi, and Xinjiang provincial governments, and the implementing agencies. Consistent with its
12 Project completion report format available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public- Sector-Landscape.rar 13 Available at: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 14 ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp
38 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 will include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency, the implementing agencies, the SFFs, enterprises and all contractors, suppliers, consultants, and other service providers as they relate to the project. The project design and implementation arrangements provide for mitigating corruption risks. Risks associated with project management, including procurement and disbursement, will be mitigated by (i) introducing a dual signing system in which contractors and suppliers awarded with contracts will also sign an anticorruption contract with the employer; and (ii) periodical inspection by the executing agencies and implementing agencies of the contractor’s activities related to fund withdrawals and settlements, and by ADB of the executing agency's and implementing agencies' project records. In furtherance of the principles of transparency and accountability, SFA will cause the NPMO to make project information freely available, including uploading relevant, current project information onto a project webpage, to be linked to the SFA website, in order to provide the public with information on the project, including setting out (i) a summary of the audited financial statements of the project, and (ii) tracking of contract awards in accordance with ADB’s Procurement Guidelines. SFA will ensure that the implementing agencies establish financial control and management arrangements compatible with ADB's Guidelines for the Financial Management and Analysis of Projects and Loan Disbursement Handbook (January 2007, as amended from time to time).
XI. ACCOUNTABILITY MECHANISM
66. People who are, or may in the future be, adversely affected by the project may address complaints to ADB, or request the review of ADB's compliance under the Accountability Mechanism.15
XII. RECORD OF PAM CHANGES Dates PAM Changes
14 May 2012 Changes agreed during the Inception Mission, 7-15 May 2012 (Relevant attachments are in Appendix 1):
III. B. Persons Involved in Project Implementation
1) Project Management Organization
Gansu Provincial Project Management Office: Ma Xuming, Project Director, Email: [email protected] Tel: 0931-8103242/ 18215182396 Fax: 0931-8103241
Shaanxi Provincial Project Management Office: Xin Zhan Liang, Director, Email: [email protected] He Jun, Vice Director, Email: [email protected] Tel: 029-88652436/ 13991836772 Fax.: 029-88652435/ 029-88652437
Xinjiang Provincial Project Management Office: Li Xiaoming, Director Email: [email protected]
15 For further information see: http://compliance.adb.org/.
39
Tel: 0991-5818587/ 13579976500 : Fax: 0991-5818587
ADB Project Director: Yue-Lang Feng Email: [email protected]
ADB Mission Leader: Frank Radstake, Senior Environment Specialist Email: [email protected]
2) The project will be implemented in 20 in Gansu, 23 counties in Shaanxi, and 5 in Xinjiang. The 17 enterprises identified during appraisal are no longer participating in the project. (Appendix 2).
VI. C. Procurement Plan
Prior review will apply to the first NCB contract for goods and first NCB contract for works conducted by the implementing agency or procurement agent by each province, irrespective of the estimated contract amount. The following documents should be submitted to ADB for approval before proceeding to the next procurement step: 1) first English draft of bidding documents 2) bid evaluation report 3) draft contract
IX. Performance Monitoring, Evaluation, Reporting, and Communication
Section F is added to include useful links on project implementation and administration (Appendix 3).
25 September 2013 IV. Costs and Financing The tables on cost estimates by expenditure category, component, and financer; and the allocation and withdrawal of loan and grant proceeds are revised following the approval of the request for reallocation (Appendix 4).
11 March 2016 Through a change in project memo, the following were approved: 1. Extension of the grant closing date from 30 September 2016 to 31 March 2017. 2. Reallocation of loan and grant proceeds (Appendix 5).
ADB = Asian Development Bank, PAM = project administration manual.
Appendix 1 40
PROVINCIAL PROJECT IMPLEMENTATION AGENCIES
A. Gansu
Name Position Tel E-mail Fax
Ma Xuming Director 18215182396 [email protected] 13909310669
Xue Xiaodi Project Officer 8103242 [email protected] 0931-8103241 13993195719
Ren Qiaolan Financial Staff 8103242 [email protected] 0931-8103241 13619322358
LiLi Project Officer 8103242 [email protected] 0931-8103241 13919407727
Kang Lei Project Officer 8103242 [email protected] 0931-8103241 13669319514
Wang Jingyi Project Officer 8103242 [email protected] 0931-8103241 13919430700
Hong Financial Staff 8103242 [email protected] 0931-8103241 Guangkuan 13893643390
B. Shaanxi Provincial Project Management Office
Name Position Tel E-mail Fax
Xin Zhanliang Director 88652436 [email protected] 029-88652435 13991836772
Chen Quanhui Deputy Director 88652727 [email protected] 029-88615194
Wen Zhen Deputy Director 88652435 [email protected] 029-88652435 13709290123
He Jun Deputy Director 88652437 [email protected] 029-88652437 13991289159
Bai Liqiang Senior Engineer 88652437 [email protected] 029-88652437
Zhang Professor 88652450 [email protected] 029-88652435 Weibing 13991880268
Lv Yin Senior Engineer 88652451 [email protected]
Wang Juan Engineer 88652451 [email protected]
Xiao Yirong Assistant Engineer 88652450 [email protected] Xie Junjuan Clerk 88652727 Shao Jing Section Chief 88652435 Zhang Ying Clerk 88652450
Appendix 1 41
C. Xinjiang Provincial Project Management Office
Name Position Tel E-mail Fax Li Xiaoming Director 0991-5818587 [email protected] 0991-5818587 13579976500 Hu Jiankun Deputy Director 0991-5852400 [email protected] 0991-5852400 13639967680 Zheng Wenhui Project Officer 0991-5852520 0991-5852520 Li Wei Financial staff 0991-5852520 0991-5852520 Chang Miao Accounting 0991-5852520 [email protected] 0991-5852520 Li Kebo Project Officer 0991-5852520 [email protected] 0991-5852520 13999202423 Fu Qiang Staff 0991-5852520
Appendix 2 42
LIST OF PARTICIPATING COUNTIES
Gansu
City Project County Qingyang City 1. Heshui County 2. Xifeng District 3. Ning County 4. Zhengning County 5. Qingcheng County Pingliang City 6. Kongtong District 7. Jingchuan County 8. Huating County 9. Jingning County Dingxi City 10. Lintao County 11. Tongwei County Linxia City 12. Yongjing County 13. Jinshi Mountain County Tianshui City 14. Qinzhou District 15. Maiji District 16. Qinan County 17. Gang County Longnan City 18. Wudu District 19. Cheng County 20. Hui County
Shaanxi
City Project County Yanan City 1. Fu County Tongchuan City 2. Yaozhou District Weinan City 3. Linwei District 4. Fuping County 5. Chengcheng County 6. Pucheng County 7. Baishui County 8. Tongguan County Xianyang City 9. Changwu County 10. Chunhua County 11. Yongshou County 12. Liquan County 13. Qian County 14. Sanyuan County Xian City 15. Lintong District Baoji County 16. Chencang District 17. Feng County Hanzhong City Chenggu County a 18. Ningqiang County Ankang City 19. Hanbin District
Appendix 2 43
City Project County 20. Ziyang County a 21. Shiquan County 22. Baihe County 23. Zhenping County a Chenggu County is changed to Tongguan County, Ziyang County is changed to Langao County. The Province Development and Reform Commission approved the change, and finalized when the project agreement was signed in March 2011.
Xinjiang
City Project County Changji City Changji Hami City Hami Kuerle City Kuerle Hejing Heijing County Yanqi Yangqi County
Appendix 3 44
LIST OF PUBLICATIONS RELEVANT TO PROJECT ADMINISTRATION
The following are internet links to ADB documents for procurement and project reporting. To access the internet site, copy the blue http:// and paste into your web browser.
B. PROCUREMENT AND CONSULTING SERVICES http://www.adb.org/Documents/Guidelines/Procurement/default.asp
Guidelines on Use of Consultants by ADB and Its Borrowers http://www.adb.org/Documents/Guidelines/Consulting/default.asp
Consulting Services Recruitment Notice http://csrn.adb.org http://csrn.adb.org:8080/csrn/login.jsp
Templates for engagement of consultants: (including submission templates) http://www.adb.org/Consulting/loan-rfp.asp
Harmonized RFP (Loans) http://www.adb.org/Consulting/all-methods-loan.asp
Sample Individual consultant contract http://www.adb.org/Consulting/ICS-Contract-Loan.pdf
Consulting Services Operations Manual http://www.adb.org/Documents/Manuals/Consulting-Services-Operations-Manual/CSOM.pdf
Toolkits and Templates for Consultants: http://www.adb.org/Consulting/toolkit-template.asp
Procurement Documents: http://www.adb.org/Procurement/prequalification-bid-documents.asp
User's Guide (Small Civil Works - below 10 Min USD) http://www.adb.org/Documents/Manuals/bidding_documents/prequalification/SBDWorks-sml- UserGuide.pdf
Guide on Bid Evaluation www.adb.org/Procurement/guide-bid-apr06.pdf
Procurement Plans http://www.adb.org/Projects/reports.asp?key=reps&val=PP
Electronic Procurement http://www.mdbegp.org/www/eGPInteractiveus/tabid/69/language/en-US/Default.aspx
E-GP (Electronic Government Procurement) Toolkit http://www.mdbegp.org/www/eGPToolkitus/tabid/67/language/en-US/Default.aspx
Appendix 3 45
C. DISBURSEMENT
Loan Disbursement Handbook (in Chinese) http://www.adb.org/sites/default/files/Loan-Disbursement-Handbook-2007-cn.pdf
Online access to LFIS website https://lfis.adb.org
Email for LFIS password: [email protected]
D. OTHERS
Project Administration Instructions http://www.adb.org/Documents/Manuals/PAI/default.asp
E-Handbook on Project Implementation http://www.adb.org/Documents/handbooks/project-implementation/default.asp?p=proj
Anticorruption and Integrity http://www.adb.org/Integrity/default.asp
How to report fraud and corruption http://www.adb.org/Integrity/howto.asp
Appendix 4 46
Loan 2744/Grant 0250-PRC: Forestry and Ecological Restoration Project in Three Northwestern Provinces Cost Estimates by Expenditure Category, Component, and Financier ( $1,000)
Asian Development Global Environment Item Bank Funde Householdsf Enterprises Provinces Total Amount % of Cost % of Cost % of Cost % of Cost % of Cost % of Total Amount Category Amount Category Amount Category Amount Category Amount Category Amount Project Cost
Investment Costs A. Planting Crop Inputs 1. Economic Tree Crops 65,550 81 - - - - 9,287 12 5,819 7 80,656 45 Shaanxi 24,840 100 ------24,840 14 Gansu 26,534 93 - - - - - 2,142 7 28,676 16 Xinjiang 14,176 52 - - - - 9,287 34 3,677 14 27,140 15 Changji 2,355 36 - - - - 3,841 59 336 5 6,532 4 Hami 8,263 76 ------2,549 24 10,812 6 Kuerle 1,395 76 ------430 24 1,825 1 Hejing 652 35 - - - - 1,082 59 108 6 1,842 1 Yanqi 1,511 25 - - - - 4,364 71 254 4 6,129 3 1.1 Economic Tree Crops (in kin - - - - 17,285 100 - - - - 17,285 10 Shaanxi - - - - 7,756 100 - - - - 7,756 4 Gansu - - - - 7,775 100 - - - - 7,775 4 Xinjiang - - - - 1,754 100 - - - - 1,754 1 2. Ecological Forestry 3,896 55 2,362 33 - - 347 5 540 8 7,145 4 Shaanxi ------Gansu - loan 3,452 91 ------321 9 3,773 2 Gansu - grant - - 992 100 ------992 1 Xinjiang - loan 444 44 - - - - 347 34 219 22 1,010 1 Changji 63 24 - - - - 172 66 24 9 259 0 Hami 219 65 ------120 35 339 0 Kuerle 109 64 ------60 36 169 0 Hejing 19 28 - - - - 45 65 5 7 69 0 Yanqi 34 20 - - - - 130 75 10 6 174 0 Xinjiang - grant - - 1,370 100 ------1,370 1 Changji - - 672 100 ------672 0 Hami - - 698 100 ------698 0 2.1 Ecological Forestry (in kind - - - - 575 100 - - - - 575 0 Shaanxi ------Gansu - - - - 485 100 - - - - 485 0 Xinjiang - - - - 90 100 - - - - 90 0 B. Infrastructure 1. Economic Tree Crops 20,770 91 - - - - 1,993 9 - - 22,763 13 Shaanxi ------Gansu 3,354 63 - - - - 1,993 37 - - 5,347 3 Xinjiang 17,416 100 ------17,416 10
Appendix 4 47
Loan 2744/Grant 0250-PRC: Forestry and Ecological Restoration Project in Three Northwestern Provinces Cost Estimates by Expenditure Category, Component, and Financier ( $1,000)
Asian Development Global Environment Item Bank Funde Householdsf Enterprises Provinces Total Amount % of Cos t % of Cos t % of Cos t % of Cos t % of Cos t % of Tot a l Amount Category Amount Category Amount Category Amount Category Amount Category Amount Project Cost 2. Ecological Forestry 7,560 76 ------2,359 24 9,919 5 Shaanxi 7,560 76 ------2,359 24 9,919 5 Gansu ------Xinjiang ------C. Carbon Readiness and Education Shaanxi - - 700 100 ------700 0 D. Ecological Forestry Center - - 1,000 100 ------1,000 1 E. Office Equipment 436 36 451 37 - - - - 330 27 1,217 1 Shaanxi 254 85 - - - - - 45 15 299 0 Gansu - - 253 59 - - - - 178 41 431 0 Xinjiang - loan 182 63 - - - - - 107 37 289 0 Xinjiang - grant - - 198 100 - - - - - 198 0 F. Vehicles ------3,441 100 3,441 2 Shaanxi ------1,933 100 1,933 1 Gansu ------1,362 100 1,362 1 Xinjiang ------146 100 146 0 G. Training 1,788 59 587 19 - - - - 647 21 3,022 2 Shaanxi 676 75 - - - - - 224 25 900 0 Gansu - - 455 52 - - - 423 48 878 0 Xinjiang - loan 1,112 100 ------1,112 1 Xinjiang - grant - - 132 100 ------132 0 H. Design, Monitoring, Evaluation ------8,424 100 8,424 5 Shaanxi ------4,250 100 4,250 2 Gansu ------1,947 100 1,947 1 Xinjiang ------2,227 100 2,227 1 I. Contingencies ------9,650 100 9,650 5 Shaanxi ------4,052 100 4,052 2 Gansu ------2,583 100 2,583 1 Xinjiang ------3,015 100 3,015 2 J. Interest During Construction d ------1,114 8 13,727 92 14,841 8 Shaanxi ------4,335 100 4,335 2 Gansu - - - - - 1,114 22 3,909 78 5,023 3 Xinjiang ------5,483 100 5,483 3 K. Commitment Charges d ------50 100 50 0 Shaanxi ------16 100 16 0 Gansu ------18 100 18 0 Xinjiang ------16 100 16 0 TOTAL 100,000 55 5,100 3 17,860 10 12,741 7 44,987 25 180,688 100
Appendix 4 48
Loan 2744‐PRC: Forestry and Ecological Restoration in Three Northwest Provinces Allocation and Withdrawal of Loan Proceeds
CATEGORY CURRENT ALLOCATION PROPOSED ALLOCATION Total Amount Allocated ADB FINANCING BASISTotal Amount Allocated ADB FINANCING BASIS for ADB Financing for ADB Financing Cat. Cat. Item $'000 $'000 Number Number Category Subcategory Percentage of ADB Financing Category Subcategory Percentage of ADB Financing from the Loan Account from the Loan Account Works 1 97,776 1 97,776 Crop Inputs‐ tree crops‐ Gansu 1A 24,840 100% of total expenditure 1A 891 100% of total expenditure Crop Inputs‐ tree crops‐ Gansu 1B 25,643 93% of total expenditure Crop Inputs‐ tree crops‐ Shaanxi 1B 26,534 93% of total expenditure 1C 24,840 100% of total expenditure Crop Inputs‐ tree crops‐ Xinjiang 1C 14,176 52% of total expenditure Crop inputs‐ forestry‐ Gansu 1D 3,452 72% of total expenditure 1D 3,452 91% of total expenditure Crop inputs‐ forestry‐ Xinjiang 1E 444 19% of total expenditure Infrastructure‐ tree crops‐ Gansu 1F 3,354 63% of total expenditure 1E 3,354 63% of total expenditure Infrastructure‐ tree crops‐ Xinjiang 1G 17,416 100% of total expenditure 1F 17,416 100% of total expenditure Infrastructure‐ forestry‐ Shaanxi 1H 7,560 76% of total expenditure 1G 7,560 76% of total expenditure Crop Inputs‐ tree crops‐ Changji 1H 2,355 36% of total expenditure Crop Inputs‐ tree crops‐ Hami 1I 8,263 76% of total expenditure Crop Inputs‐ tree crops‐ Kuerle 1J 1,395 76% of total expenditure Crop Inputs‐ tree crops‐ Hejing 1K 652 35% of total expenditure Crop Inputs‐ tree crops‐ Yanqi 1L 1,511 25% of total expenditure Crop inputs‐ forestry‐ Changji 1M 63 24% of total expenditure Crop inputs‐ forestry‐ Hami 1N 219 65% of total expenditure Crop inputs‐ forestry‐ Kuerle 1O 109 64% of total expenditure Crop inputs‐ forestry‐ Hejing 1P 19 28% of total expenditure Crop inputs‐ forestry‐ Yanqi 1Q 34 20% of total expenditure Capacity Building 2 1,788 2 1,788 Capacity Building‐ Shaanxi 2A 676 75% of total expenditure 2A 676 75% of total expenditure Capacity Building ‐ Xinjiang 2B 1,112 89% of total expenditure 2B 1,112 100% of total expenditure Equipment 3 436 3 436 Equipment‐ Shaanxi 3A 254 85% of total expenditure 3A 254 85% of total expenditure Equipment‐ Xinjiang 3B 182 37% of total expenditure 3B 182 63% of total expenditure Total 100,000 100,000
Appendix 4 49
Grant 0250‐PRC: Forestry and Ecological Restoration in Three Northwest Provinces Allocation and Disbursement of GEF Grant Proceeds
CATEGORY CURRENT ALLOCATION PROPOSED ALLOCATION Amount Allocated GEF FINANCINGAmount Allocated GEF FINANCING ($) ($) Cat. Cat. Item Number Category Subcategory Percentage and Basis for Number Category Subcategory Percentage and Basis for Withdrawal from the Grant Withdrawal from the Grant Account Account Works‐ Crops inputs‐ forestry 1 2,362,000 12,362,000 Works‐ Crops inputs‐ forestry‐ Gansu 1A 992,000 21% of total expenditures 1A 992,000 100% of total expenditures * Works‐ Crops inputs‐ forestry‐ Xinjiang 1B 1,370,000 58% of total expenditures Works‐ Crops inputs‐ forestry‐ Changji 1B 672,000 100% of total expenditures * Works‐ Crops inputs‐ forestry‐ Hami 1C 698,000 100% of total expenditures * Shaanxi Carbon Readiness Education 2 700,000 100% of total expenditures *2 700,000 100% of total expenditures * Shaanxi Ecological Forestry Center 3 1,000,000 100% of total expenditures * 3 1,000,000 100% of total expenditures * Equipment 4 451,000 4451,000 Equipment‐ Gansu 4A 253,000 59% of total expenditures 4A 253,000 59% of total expenditures Equipment‐ Xinjiang 4B 198,000 41% of total expenditures 4B 198,000 100% of total expenditures * Training 5 587,000 5587,000 Training‐ Gansu 5A 455,000 52% of total expenditures 5A 455,000 52% of total expenditures Training‐ Xinjiang 5B 132,000 11% of total expenditures 5B 132,000 100% of total expenditures * Total 5,100,000 5,100,000 * Excluding any local taxes and duties.
Appendix 5 50
Loan 2744‐PRC: Forestry and Ecological Restoration in Three Northwest Provinces Allocation and Withdrawal of Loan Proceeds
CATEGORY CURRENT ALLOCATION PROPOSED ALLOCATION Total Amount Allocated ADB FINANCING BASISTotal Amount Allocated ADB FINANCING BASIS for ADB Financing for ADB Financing Cat. Cat. Item $'000 $'000 Number Number Category Subcategory Percentage of ADB Financing Category Subcategory Percentage of ADB Financing from the Loan Account from the Loan Account Works 1 97,776 1 98,638 Crop Inputs‐ tree crops‐ Gansu 1A 891 100% of total expenditure 1A 891 100% of total expenditure Crop Inputs‐ tree crops‐ Gansu 1B 25,643 93% of total expenditure 1B 27,589 93% of total expenditure Crop Inputs‐ tree crops‐ Shaanxi 1C 24,840 100% of total expenditure 1C 24,840 100% of total expenditure Crop inputs‐ forestry‐ Gansu 1D 3,452 91% of total expenditure 1D 3,452 91% of total expenditure Infrastructure‐ tree crops‐ Gansu 1E 3,354 63% of total expenditure 1E 1,408 63% of total expenditure Infrastructure‐ tree crops‐ Xinjiang 1F 17,416 100% of total expenditure 1F 19,500 100% of total expenditure Infrastructure‐ forestry‐ Shaanxi 1G 7,560 76% of total expenditure 1G 7,560 76% of total expenditure Crop Inputs‐ tree crops‐ Changji 1H 2,355 36% of total expenditure 1H 2,080 36% of total expenditure Crop Inputs‐ tree crops‐ Hami 1I 8,263 76% of total expenditure 1I 7,576 76% of total expenditure Crop Inputs‐ tree crops‐ Kuerle 1J 1,395 76% of total expenditure 1J 1,092 76% of total expenditure Crop Inputs‐ tree crops‐ Hejing 1K 652 35% of total expenditure 1K 626 35% of total expenditure Crop Inputs‐ tree crops‐ Yanqi 1L 1,511 25% of total expenditure 1L 1,556 25% of total expenditure Crop inputs‐ forestry‐ Changji 1M 63 24% of total expenditure 1M 63 24% of total expenditure Crop inputs‐ forestry‐ Hami 1N 219 65% of total expenditure 1N 219 65% of total expenditure Crop inputs‐ forestry‐ Kuerle 1O 109 64% of total expenditure 1O 121 64% of total expenditure Crop inputs‐ forestry‐ Hejing 1P 19 28% of total expenditure 1P 19 28% of total expenditure Crop inputs‐ forestry‐ Yanqi 1Q 34 20% of total expenditure 1Q 46 20% of total expenditure Capacity Building 2 1,788 2 926 Capacity Building‐ Shaanxi 2A 676 75% of total expenditure 2A 676 75% of total expenditure Capacity Building ‐ Xinjiang 2B 1,112 100% of total expenditure 2B 250 100% of total expenditure Equipment 3 436 3 436 Equipment‐ Shaanxi 3A 254 85% of total expenditure 3A 254 85% of total expenditure Equipment‐ Xinjiang 3B 182 63% of total expenditure 3B 182 63% of total expenditure Total 100,000 100,000
Appendix 5 51
Grant 0250‐PRC: Forestry and Ecological Restoration in Three Northwest Provinces Allocation and Disbursement of GEF Grant Proceeds
CATEGORY CURRENT ALLOCATION PROPOSED ALLOCATION Amount Allocated GEF FINANCINGAmount Allocated GEF FINANCING ($) ($) Cat. Cat. Item Number Category Subcategory Percentage and Basis for Number Category Subcategory Percentage and Basis for Withdrawal from the Grant Withdrawal from the Grant Account Account Works‐ Crops inputs‐ forestry 1 2,362,000 1 2,362,000 Works‐ Crops inputs‐ forestry‐ Gansu 1A 992,000 100% of total expenditures * 1A 992,000 100% of total expenditures * Works‐ Crops inputs‐ forestry‐ Changji 1B 672,000 100% of total expenditures * 1B 672,000 100% of total expenditures * Works‐ Crops inputs‐ forestry‐ Hami 1C 698,000 100% of total expenditures * 1C 698,000 100% of total expenditures * Shaanxi Carbon Readiness Education 2 700,000 100% of total expenditures * 2 700,000 100% of total expenditures * Shaanxi Ecological Forestry Center 3 1,000,000 100% of total expenditures * 3 1,000,000 100% of total expenditures * Equipment 4 451,000 4 401,000 Equipment‐ Gansu 4A 253,000 59% of total expenditures 4A 253,000 59% of total expenditures Equipment‐ Xinjiang 4B 198,000 100% of total expenditures * 4B 148,000 100% of total expenditures * Training 5 587,000 5 637,000 Training‐ Gansu 5A 455,000 52% of total expenditures 5A 455,000 100% of total expenditures* Training‐ Xinjiang 5B 132,000 100% of total expenditures * 5B 182,000 100% of total expenditures * Total 5,100,000 5,100,000 * Excluding any local taxes and duties.