Project Administration Manual Project Number: 48175-002 Loan Number: {LXXXX; GXXXX; TAXXXX} May 2018 Myanmar: Third Greater Mekong Subregion Corridor Towns Development Project i ABBREVIATIONS 3Rs – Reduce, Reuse, Recycle AAGR – Annual Average Growth Rates (Population) ADB – Asian Development Bank AH 1 – Asian Highway 1 APCF – Asia Pacific Carbon Fund BATNEEC – Best Available Techniques Not Entailing Excessive Costs BOI – Thai Board of Investment BOO – Build - Own - Operate BOOT – Build–Operate–Own–Transfer C:N – Carbon-Nitrogen (ratio) cap – Capita (= 1 person) CBO – community-based organization CBP – Capacity Building Program CC – Climate Change CDIA – Cities Development Initiative for Asia CDM – Clean Development Mechanism CER – Certified Emission Reduction CH4 – Methane CO2 – carbon dioxide CPCS – Centre for Peace and Conflict Studies DDI – Domestic Direct Investment DFR – draft final report – Department for Human Settlement Housing Development DHSHD (DUHD) DMF – design and monitoring framework DUHD – Department of Urban Housing Development (MOC) EA – executing agency EA – environmental assessment ECC – Environmental Compliance Certificate ECD – Environmental Conservation Department EIA – Environmental Impact Assessment EWEC – East – West Economic Corridor FDI – Foreign Direct Investment GAD – General Administration Department GHG – greenhouse gas GMS – Greater Mekong Subregion GNP – gross national product GoM – Government of Myanmar HDPE – High Density Polyethylene HIZ – Hpa-An Industrial Zone HTDC – Hpa-An Town Development Committee IA – implementing agency IEE – initial environmental examination IFI – International Finance Institution INC – Initial National Communication IPNS – Integrated Plant Nutrient System ISWM – Integrated Sustainable Waste Management JICA – Japan International Cooperation Agency KNU – Karen National Union i KS-DAC – Kayin State Development Affairs Development Committee KS-DAO – Kayin State Development Affairs Office KSG – Kayin State Government m3 – cubic meter MaT-DAC – Mawlamyine Township Development Affairs Committee MaT-DAO – Mawlamyine Township Development Affairs Office MCDC – Mandalay City Development Committee MDDC – Myawaddy District Development Committee MoECAF – Ministry of Environment Conservation and Forests MHA – Ministry of Home Affairs MMK – Myanmar Kyat MOA – Ministry of Agriculture MOC – Ministry of Construction MOE – Ministry of Energy MOSB – Myanmar Offshore Supply Base MRF – Material Recovery Facility MS-DA – Mon State Development Affairs MS-DAC – Mon State Development Affairs Committee MS-DAO – Mon State Development Affairs Office MSE – Micro- and Small enterprises MSG – Mon State Government MS-GAD – Mon State General Affairs Department – Mon-State Township-level Development Affairs MST-DAC Committees MSW – Municipal Solid Waste MTDC – Mawlamyine Town Development Committee MW – Megawatt NAPA – National Adaptation Programs of Actions NECC – National Environmental Conservation Committee – Neighbouring Countries Economic Development NEDA Cooperation Agency, Ministry of Finance, Thailand NGO – nongovernment organization NMSP – New Mon State Party NPK – Nitrogen, Phosphorous, And Potassium NSAG – Non-State Armed Groups ODA – Overseas Development Assistance PCU – Project Coordination Unit PET – Poly-ethylene Terephthalate PIU – Project Implementation Units PPP – Public–Private Partnership PPTA – Project Preparatory Technical Assistance SEZ – Special Economic Zone SLEDP – Strategic Local Economic Development Plans SPC – Special Purpose Company SPS – Safeguard Policy Statement TA – Technical Assistance TAO – Township Administration Office THa-DAC – Township Hpa-An Development Affairs Committee THa-DAO – Township Hpa-An Development Affairs Office TMy-DA – Myawaddy Township Development Affairs TMy-DAO – Myawaddy Township Development Office ii TMy-DC – Myawaddy Township Development Committee TZM – Myawaddy Township Trade Zone UMTA – Union of Myanmar Travel Association UNDP – United Nations Development Programme WOP – Water Operator Partnership (WOP) WWTP – Waste Water Treatment Plant YCDC – Yangon City Development Committee YHT – Yangon Heritage Trust iii CONTENTS I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 1 A. Project Readiness Activities 4 B. Overall Project Implementation Plan 5 III. PROJECT MANAGEMENT ARRANGEMENTS 6 A. Project Implementation Organizations: Roles and Responsibilities 6 B. Key Persons Involved in Implementation 7 C. Project Organization Structure 8 IV. COSTS AND FINANCING 9 A. Detailed Cost Estimates by Expenditure Category 11 B. Allocation and Withdrawal of Loan Proceeds 12 C. Detailed Cost Estimates by Financier 13 D. Detailed Cost Estimates by Outputs and/or Components 14 E. Detailed Cost Estimates by Year 15 F. Contract and Disbursement S-Curve 18 G. Fund Flow Diagram 19 V. FINANCIAL MANAGEMENT 18 A. Financial Management Assessment 18 B. Disbursement 19 C. Accounting 19 D. Auditing and Public Disclosure 20 VI. PROCUREMENT AND CONSULTING SERVICES 21 A. Advance Contracting and Retroactive Financing 21 B. Procurement of Goods, Works, and Consulting Services 21 C. Procurement Plan 22 D. Consultant's Terms of Reference 29 VII. SAFEGUARDS 28 VIII. GENDER AND SOCIAL DIMENSIONS 32 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 35 A. Project Design and Monitoring Framework 35 B. Monitoring 39 C. Evaluation 42 D. Reporting 43 E. Stakeholder Communication Strategy 43 X. ANTICORRUPTION POLICY 46 XI. ACCOUNTABILITY MECHANISM 46 XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 46 Project Administration Manual Purpose and Process 1. The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with the policies and procedures of the government and Asian Development Bank (ADB). The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. 2. The executing and implementing agencies are wholly responsible for the implementation of ADB-financed projects, as agreed jointly between the borrower and ADB, and in accordance with the policies and procedures of the government and ADB. ADB staff is responsible for supporting implementation including compliance by executing and implementing agencies of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures. 3. At loan negotiations, the borrower and ADB shall agree to the PAM and ensure consistency with the loan agreement. Such agreement shall be reflected in the minutes of the loan negotiations. In the event of any discrepancy or contradiction between the PAM and the loan agreement, the provisions of the loan agreement shall prevail. 4. After ADB Board approval of the project's report and recommendations of the President (RRP), changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval, they will be subsequently incorporated in the PAM. I. PROJECT DESCRIPTION A. Rationale 1. Development of Greater Mekong Subregion corridor towns. The GMS EWEC has contributed to economic growth in the region since its launch in 1998 as a GMS flagship initiative. The objective of developing the GMS corridor towns is to increase economic activities along these economic corridors by investing in urban infrastructure. Local economic development in Mawlamyine, Hpa-An, and Myawaddy is indispensable to transform Myanmar’s portion of the EWEC into a full-fledged economic corridor. International tourist visits increased from about 50,000 in 2011 to 170,000 in 2016 in Mon State and from 5,000 in 2011 to 90,000 in 2016 in Kayin State.1 Border trade at Myawaddy in Myanmar and Mae Sot in Thailand increased from about $1 billion in 2010 to $3 billion in 2016.2 The project will be the third phase of the GMS corridor towns development initiative and will contribute to environmentally sustainable and inclusive growth of the region. 2. Country’s urbanization and urban issues. Although 66.0% of Myanmar’s population resides in rural areas, the urban population has grown by 2.5% per year, faster than the country’s total population (0.8% per year). The percentage of the urban population in Myanmar increased from 27.0% of the total population in 2000 to 34.1% of the total population in 2015. It is expected to increase to 36.9% in 2020 and 42.8% in 2030.3 On the other hand, chronic underinvestment in urban infrastructure has resulted in seriously deficient municipal services throughout Myanmar. Lack of urban infrastructure and limited capacity to manage municipal services are major disincentives to external investments, which are critical to socioeconomic development and growth.4 3. Regional context. Kayin State and Mon State have significant potential for development thanks to (i) an expected increase in trade with Thailand, (ii) better access to Yangon, (iii) its link to the Bay of Bengal, (iv) expected increases in tourist visits, and (v) connection with a new international airport in Bago. Upgrading urban infrastructure and developing urban management capacity are essential to strengthen Kayin and Mon states’ competitiveness and tie-in with wider economic growth in the GMS. 4. Project town profiles. Mawlamyine is the capital of Mon State with an urban population of about 254,000, and has been a hub for trade with