S ocial Monitoring Report Project Number: 50050-003 February 2020 Social and Resettlement External Monitoring Report PRC: Guangxi Regional Cooperation and Integration Promotion Investment Program – Tranche 1 Submitted by Guangxi Project Management Office This social monitoring report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. Asian Development Bank Guangxi Regional Cooperation and Integration Promotion Investment Program ( Tranche 1) Social and Resettlement External Monitoring Report Volume I February 2020 Contents I. Project Background__________________________________ 1 II. Project implementation progress _____________________ 2 III. Resettlement progress and evaluation _________________ 5 IV. Conclusion and suggestions __________________________ 7 Appendix:_____________________________________________ 8 1 I. Project Background On December 12, 2016, the Board of Directors of Asian Development Bank (ADB) approved $450 million of Multi-tranche Financing Facility (MFF) from the Ordinary Capital Resources (OCR) for Guangxi Regional Cooperation and Integration Promotion Investment Program. On the basis of the MFF approved by the Board, on December 12, 2019, ADB approved the loan for Tranche 1. The total investment of Tranche 1 is $280 million, which includes $130 million of ADB loan that consists of the investment loan component (L3501) and the financial intermediation loan component (L3508). The L3501 component was signed on May 17, 2017, became effective on August 21, 2017, and scheduled to close on December 31, 2021. The L3508 component was signed on May 18, 2017, became effective on July 28, 2017 and scheduled to close on June 30, 2022. In February 2019, an external monitoring consultant was engaged by Guangxi Foreign Loans Project Management Office (GPMO) to carry out the monitoring of the social and involuntary resettlement of the Project. However, because the subprojects which have infrastructure construction activities were not started before June 2019, the first semi-annual social and resettlement external monitoring report starts from this report period. The contents of the first external monitoring report cover the resettlement activities of the subprojects under the Tranche 1 Project which have occurred during the monitoring period from July 1 to December 31 of 2019. 1 II. Project implementation progress By the end of the reporting period of this report (end of December 2019), the general progress of the Tranche 1 was 34.28%, which was about 20% behind the schedule. The calculation of this progress was based on the total investment loan of $62.27 million (excluding interest and commitment charges) under Tranche 1. If the calculation was based on the construction contents which had already been ascertained (approximately $42.0 million), the actual progress was about 51%, which was basically identical to the schedule. The progresses of all the Subprojects are stated below: Subproject 1. Fangchenggang Training Center for PRC and Vietnamese Workers and SMEs in Fangchenggang Polytech Vocational School This Subproject utilizes $9.36 million of ADB loan to construct 5 buildings of the training center through Contract FGS-C1. The funds for the equipment will be mobilized by domestic counterpart funds. This contract was still under construction till the end of this report period (December 31, 2019), achieving a disbursement rate of 69.03%. Subproject 2: Development of Pingxiang Cross-border Labor Cooperation Demonstration Park This Subproject utilizes $4.90 million of ADB loan to implement the civil works contract of PX-C2 for constructing 5 buildings for Pingxiang Cross-border Labor Cooperation Center. The funds for the equipment will be mobilized by domestic counterpart funds. This contract was under construction till the end of this report period (December 31, 2019), achieving a disbursement rate of 82.49%. Subproject 3: Improvement of Training for PRC and Vietnamese Workers and Local SMEs 2 In the PAM, Contract GX-CS8, GX-CS9, GX-CS10, and GX-CS11 were planned to implement this subproject by two levels of training activities. As the end of this reporting period (end of December 2019), the GPMO advertised the EOI in ADB’s CMS on December 14, 2019 according to the ADB’s approval of the revised TOR and cost estimation. Subproject 4: Expansion of SME Financing in Guangxi The SME financing component under Tranche 1 of the MFF will provide financing to SMEs in Guangxi Zhuang Autonomous Region, in particular Nanning, Baise, Chongzuo, Fangchenggang, and Qinzhou, through a financial institution using the financial intermediation loan (FIL) modality. As of the end of this reporting period (end of December 2019), totally 8 SMEs had been approved with the loan. Subproject 5: Development of Smart Port for Longbang Border Economic Zone As the first contract in this subproject, the BD of Contract BS-E1 was completed according to the comments of the consultants after several rounds of revision. The BDs of other contracts (BS-E2 ~ BS-E5) are under preparation. Subproject 6: Expansion of Pingxiang Border Trade Service Center This subproject has been implemented by domestic funds, and so the savings of the loan allocation thereof will be re-allocated to other new components. Subproject 7: Project Advisory Support for Exploring PPP Opportunities for Improving Border Services This subproject is confirmed to be canceled, and replaced by a new subproject, namely Improving Innovation Capacities of SME in PRC-Vietnam Border Area which will be procured by CQS. 3 Subproject 8: Project Advisory Support on Improving Cross-border Financial and Investment Services including Guarantees for Noncommercial Risks The TOR for this subproject is still under preparation. Subproject 9: Strengthening Business Development Services in Guangxi The TOR for this subproject is still under preparation. 4 III. Resettlement progress and evaluation Tranche 1 of the investment program is classified as category C for involuntary resettlement. During this reporting period from the launch of implementation to 31 December 2019, only Subproject 1, Fangchenggang Training Center for PRC and Vietnamese Workers and SMEs in Fangchenggang Polytech Vocational School, and Subproject 2, Development of Pingxiang Cross-border Labor Cooperation Demonstration Park, had the infrastructure construction activities. During the field survey respectively in Pinxiang and Fangchenggang during April 1 - 3, 2019, the external monitoring specialists learned that, only the above two subprojects had completed the land acquisition and house demolition before the signing of the Project Agreement. There were no additional progress in land acquisition and demolition. At the same time, the resettlement specialists organized the first training activities for the DRCs of Pinxiang and Fangchenggang, the IAs, the construction supervisors and contractors to interpret the safeguard policies of ADB, as shown in Figure 1 and Figure 2. Figure 1: Training Workshop in Fangchenggang 5 Figure 2: Construction Site of Fangchenggang From August to September 2019, the resettlement specialists compiled the Social and Gender Action Plan respectively for the two subprojects in Pinxiang and Fangchenggang cities, as shown in the Appendices. On October 17, 2019, in the conference room of GPMO, the resettlement specialists delivered a training course on involuntary resettlement and social issues for the DRCs, IAs, construction supervisors and contractors from all subprojects in relevant cities and counties. On October 18, 2019, the resettlement specialists visited Fangchenggang to assisted the IAs to prepare a series of tabular forms and establish the internal monitoring mechanism for the project, for which, the performance will re illustrated in the next monitoring report. Because Subproject 3, Improvement of Training for PRC and Vietnamese Workers and Local SMEs, is still at the stage of bidding, the gender and social issues during training for the workers both of PRC and Vietnam will be followed in the next monitoring report. 6 IV. Conclusion and suggestions Conclusion: The Tranche 1 components are under-going, and the overall progress is relatively slow. The Tranche 1 components are classified as category C for involuntary resettlement. Only Subproject 1, Fangchenggang Training Center for PRC and Vietnamese Workers and SMEs in Fangchenggang Polytech Vocational School, and Subproject 2, Development of Pingxiang Cross-border Labor Cooperation Demonstration Park, had the infrastructure construction activities, and the land acquisition, house demolition and resettlement had been completed before signing the Project Agreement. There were no additional resettlement activities. Suggestions: 1. The Tranche 1 components do not have involuntary resettlement activities such as land acquisition and house demolition, however, according to the ADB’s safeguard policies, the GPMO and the IAs are still required to address the social and gender issues arising from the project implementation, for example, the women’s participation in construction, the priority of job opportunities being given to the female and