Concept Paper. Project Number: October Proposed Administration of Grant RMI: Ebeye Water Supply and Sanitation Project

Transcription

1 Concept Paper Project Number: October 2012 Proposed Administration of Grant RMI: Ebeye Water Supply and Sanitation Project

2 CURRENCY EQUIVALENTS The currency of the Republic of the Marshall Islands is the United States dollar. ABBREVIATIONS AusAID Australian Agency for International Development KAJUR Kwajalein Atoll Joint Utility Resources RMI Republic of the Marshall Islands NOTES (i) (ii) The fiscal year (FY) of the Government of Republic of the Marshall Islands and its agencies ends on 30 September. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2008 ends on 30 September In this report, "$" refers to US dollars. Vice-President S. Groff, Operations 2 Director General X. Yao, Pacific Department (PARD) Director I. Matsumoto, PAUS, PARD Team leader Team members Peer reviewer S. Blaik, Senior Urban Development Specialist, PARD C. Edmonds, Senior Economist, PARD H. Everett, Financial Sector Specialist (Public Finance), PARD S. Lee, Principal Social Development Specialist (Gender and Development), PARD N. Sapkota, Safeguards Specialist, PARD J. Williams, Senior Environment Specialist, PARD Y. Kim, Counsel, Office of the General Counsel J. Urban Development Specialist, East Asia Department 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.

3 CONTENTS Page I. THE PROJECT 1 A. Rationale 1 B. Impact, Outcome, and Outputs 2 C. Investment and Financing Plans 2 D. Indicative Implementation Arrangements 3 II. DUE DILIGENCE REQUIRED 3 III. PROCESSING PLAN 4 A. Risk Categorization 4 B. Resource Requirements 4 C. Processing Schedule 4 IV. KEY ISSUES 4 APPENDIXES 1. Basic Project Information 5 2. Problem Tree 6 3. Design and Monitoring Framework 7 4. Project Preparatory Technical Assistance Initial Poverty and Social Analysis 14

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5 I. THE PROJECT A. Rationale 1. The project will address factors which result in the high incidence of waterborne disease on Ebeye, an island within Kwajalein Atoll. 1 Ebeye has an area of approximately 31 hectares and a population of more than 9,600, (population density is about 31,000 persons per km 2 ). The project will improve access to safe water and sanitation and promote behavioral change to improve hygiene standards. 2. High incidence of waterborne disease. Ebeye has a high incidence of waterborne disease. The number of cases of waterborne disease, primarily gastroenteritis, recorded by Ebeye Hospital since 2001 averages 1,182 cases per year. The high incidence of waterborne disease is attributed to: (i) limited access to safe water; (ii) ineffective hygiene behaviors, particularly among children; and (iii) a dilapidated sanitation system. 3. Limited sources of fresh water. The primary sources of potable water for households on Ebeye are the public fresh water supply (84%) provided by the Kwajalein Atoll Joint Utilities Resources (KAJUR) Inc. 2 ; household rainwater tanks (15%); and bottled water (1%). Sources of potable water are household rainwater harvesting and a reverse osmosis desalination (RO) plant operated by KAJUR. Groundwater reserves are minimal and there are no freshwater streams. The Ebeye RO plant, commissioned in 2001, uses outdated RO technology and is energy inefficient and requires about 3 times more energy to produce the equivalent volume of potable water than modern RO plants. Currently, the RO plant produces 110,000 gallons potentially providing 11.4 gallons (44 liters) per day to every person. However, the potable water available from fresh water supply system is substantially less due to leakage from the fresh water supply network and uncontrolled overflows from water reservoirs. Rainwater harvesting is being increasingly utilized by households to increase access to potable water but is not secure due to seasonal rainfall patterns and more frequent droughts. In drought years water stored in rainwater tanks is rapidly consumed and rainwater tanks may remain unreplenished for long periods. However, climate projections for the Marshall Islands indicate higher air and sea temperatures and higher rainfall and rainwater harvesting will become an increasingly important supplementary household freshwater. 4. Need to enhance awareness on hygiene and water related issues. Public awareness and education on water related issues is low and awareness and education activities and outreach are limited. A long-duration hygiene and water awareness campaign is needed to foster sustained behavioral change required for improved hygiene and reduced incidence of waterborne diseases. Campaigns need to focus on children, which comprise 45% of Ebeye s population, through programs delivered in school and to womens groups. 5. Dilapidated sewer system. The Ebeye saltwater sewerage system has progressively failed due to lack of maintenance since it s commissioning in Salt water for the operation of the sewer system is sourced from 2 deep wells and is pumped through a dedicated saltwater reticulation network to most areas on Ebeye. Pressure in the saltwater reticulation mains is very low and is insufficient for operation of fire hydrants. The sewage treatment plant has not operated since 2001 and untreated sewage is discharged into the lagoon. The sewage pump 1 The project also includes a project preparatory technical assistance (PPTA) described in Appendix 4 and should be approved by Vice-President Operations concurrently with the concept paper. 2 KAJUR also provides electricity generation and distribution and sewerage services on Ebeye. KAJUR also operates a salt water distribution network for the operation of the sewerage network.

6 2 stations have limited pumping capacity and frequently fail and there is significant infiltration of seawater into the sewers. The high seawater infiltration and pump failures often result in sewage overflows from manholes and pump stations into the streets. Overflows from the sewerage network and discharge of raw sewage to the lagoon present a serious health hazard. Water quality testing by the Republic of the Marshall Islands (RMI) Environmental Protection Agency (EPA) indicates that the marine water quality at several locations on Ebeye s lagoon foreshore does not meet EPA standards due to sewage contamination. 6. Unsustainable water and sewerage services. Over the past 6 fiscal years, KAJUR has recorded operating losses of $2 million or more. Electricity services account for about 88% of KAJUR s operating revenue. Water supply and sewerage services are provided by KAJUR free of charge. KAJUR has financed the gap between expenditure and operating revenues through grants from the United States. 3 KAJUR has developed a reform strategy to improve its financial sustainability through improved operational efficiency and increased revenues. The reform strategy includes plans to install consumer meters and the introduction of volumetricbased charges for water supply and sewerage services. However, tariff policies have yet to be developed. Asset planning and improved management is essential for KAJUR to become financially and technically sustainable. 7. The project is consistent with RMI s strategic development strategy, Vision 2018, for improved hygiene and sanitation and reliable and affordable water and sanitation infrastructure. The project is included in RMI Country Operations Business Plan which includes a strategic focus of infrastructure development. The project is aligned with: (i) ADB s Strategy 2020 to contribute to improved public health through water and sanitation investments; (ii) ADB s Approach to Assisting the Pacific ( ) to improve the supply and delivery of water and sanitation services; and (iii) ADB s Water Policy and Water Operational Plan to increase efficiency and productivity in the delivery of water services and increase investments in sanitation and wastewater management. B. Impact, Outcome, and Outputs 8. The project impact will be reduced incidence of waterborne disease on Ebeye. The outcome of the project will be improved access to safe water and improved sanitation. Project outputs will include: (i) Output 1 - enhanced awareness of hygiene and water issues and sustained improved hygiene behavior; (ii) Output 2 - secure and safe freshwater supplies; (iii) Output 3 - effective, efficient and safe sewerage services; and (iv) Output 4 - KAJUR is financially and technically sustainable. C. Investment and Financing Plans 9. The project preliminary cost estimate is $16 million. Infrastructure investments are estimated at $13 million and will fund priority water supply, sanitation and electricity supply investments. Public awareness and education activities to foster hygiene and sanitation behavior change are estimated at $1 million. Capacity development activities are estimated at $0.5 million. Consulting services for implementation support are estimated at $1.5 million. The project will be financed on a grant basis by the Government of Australia and administered by ADB. 4 3 Through the RMI - United States Compact of Free association. 4 RMI is recognized as having the characteristics of a fragile situation as described in ADB Achieving Development Effectiveness in Weakly Performing Countries. Manila, and the elements of ADB s Pacific Approach relating to fragile situations in the Pacific, including expanded use of grants and cofinancing, apply.

7 3 Source Table 1: Tentative Financing Plan Amount ($ million) Share of Total (%) Government of Australia TBD TBD Government TBD TBD Total TBD = to be determined. Source: Asian Development Bank D. Indicative Implementation Arrangements 10. The Office of the Chief Secretary will be the project executing agency (EA) and KAJUR will be the project implementing agency (IA). A project steering committee (PSC) will be established to provide strategic direction and guidance for the project. 5 The PSC will meet at least once every quarter. A project management unit (PMU) will be established within KAJUR and will be responsible for the overall implementation of the project. 6 Consultants will be recruited to assist the PMU implement the project and to build capacity within KAJUR. All consultants will be recruited following ADB s Guidelines on the Use of Consultants (2010). Project disbursements will be in accordance with ADB s Loan Disbursement Handbook (2012). 11. Procurement under the project will be conducted in accordance with ADB's Procurement Guidelines (2010). All civil works contracts will be awarded following international competitive bidding (ICB) procedures. Procurement contracts of goods equal or greater than $100,000 will be awarded following ICB procedures. ADB will not be committed to financing contracts awarded without prior ADB approval. II. TECHNICAL ASSISTANCE 12. A project preparatory technical assistance (PPTA) will undertake the due diligence for the project and assist KAJUR in preparing asset management plans to improve the delivery of water supply and sanitation services and build KAJUR s financial and technical sustainability. The PPTA will also prepare detailed designs and bidding documents. The PPTA is estimated to cost $1,000,000 equivalent and will be financed by (i) $500,000 grant from the Government of Australia administered by ADB and (ii) a grant of $500,000 from the Multi-Donor Trust Fund under the Water Financing Partnership Facility and administered by ADB. 7 III. DUE DILIGENCE REQUIRED 13. The following due diligence will be conducted through a project preparatory technical assistance: (i) Technical. Preparation of medium-term asset management water supply, sewerage, and electricity services plans for KAJUR. 5 The PSC will comprise representatives from the Kwajalein Leadership, the Kwajalein Atoll Local Government, the Ministry of Finance, the Ministry of Health, the Ministry of Education, the Environment Protection Agency, KAJUR, Ebeye community groups. The PSC will be chaired by the Chief Secretary. 6 The PMU will comprise the following KAJUR personnel: (i) PMU project manager; (ii) accountant / finance officer; (iii) water supply operations manager; (iv) sewerage operations manager; (v) electricity supply operations manager; and (vi) community liaison officer. 7 Contributors to the Multi-Donor Trust Fund are the Governments of Australia, Austria, Norway, Spain, and Switzerland.

8 4 (ii) (iii) (iv) (v) Economic and financial. Review of KAJUR s current tariff structures, and development of tariff structure to enable full cost recovery within 8 years. Confirmation of economic and financial viability and sustainability. Governance. Public financial management, procurement, anticorruption, policy and legal, capacity, and other institutional issues and mechanisms. Poverty and social. Poverty reduction, social impacts and gender assessment. Safeguards. Environment, including a focus on climate change impacts on the project, and involuntary resettlement specifically for Outputs 2 and 3 which will include civil works. IV. PROCESSING PLAN A. Risk Categorization 14. The project is categorized as complex as: (i) ADB s previous assistance to the water sector in RMI was completed in April 2002 and was rated partially successful; (ii) the capacity of the EA and IA to administer an externally-financed project is considered low; and (iii) the project will be entirely financed by grants from the Government of Australia and administered by ADB. B. Resource Requirements 15. A project preparatory technical assistance is required to prepare the project and to complete due diligence (Appendix 4). The staff time inputs by the project s team leader, economist, financial specialist, gender specialist, environmental specialist, resettlement specialist, counsel, and analyst to prepare the project is estimated at 6 person-months. C. Processing Schedule 16. The proposed project processing schedule is outlined in Table 2. Table 2: Proposed Processing Schedule Milestones Expected Completion Date Concept approval 9 November 2012 Grant fact-finding mission December 2013 Management review meeting 27 February 2014 Grant negotiations March 2014 Board consideration 27 May 2014 Grant signing 24 June 2014 Grant effectiveness 16 September 2014 AusAID = Australian Agency for International Development; PPTA = project preparatory technical assistance. Source: Asian Development Bank V. KEY ISSUES 17. Major project risks include: (i) limited project ownership by stakeholders; (ii) hygiene behavior change messages and approaches are not effective; and (iii) community resistance to water and sewerage charges. An intensive program of community engagement to improve ownership and accountability and to foster behavioral change will be implemented at all stages of the project. Capacity will be developed within KAJUR to ensure sustainability of sanitation investments through adequate asset management and cost recovery.

9 Appendix 1 5 Aspects Modality Financing COBP/ RCOBP BASIC PROJECT INFORMATION Arrangements Project grant Government of Australia grant(s). RMI COBP a Classification Sector (subsectors): Multisector (Water supply and sanitation, Conventional energy, Electricity transmission and distribution) Themes (subthemes): Social development (human development), Environmental sustainability (urban environmental improvement), Capacity development (institutional development). Targeting classification: General intervention. Gender mainstreaming category: Effective gender mainstreaming Location impact: Rural (low), urban (high), and regional (medium) Safeguards: Environment Category B. Involuntary resettlement Category B, Indigenous peoples Category C Risk categorization Partnership(s) Use of a PBA Parallel PIU Department and division Mission leader and members Complex Government of Australia, Multi-Donor Trust Fund under the Water Financing Partnership Facility (contributors: the governments of Australia, Austria, Norway, Spain and Switzerland). PBA will not be used. No. Pacific Regional Department / Urban, Social Development and Public Management Division Team leader: Stephen Blaik. Team members: Christopher Edmonds, Nogendra Sapkota, Jean Williams. COBP = country operations business plan; PBA = programmatic based approach; PIU = project implementation unit; RCOBP = regional cooperation operations business plan; RMI = Republic of the Marshall Islands; TA = technical assistance. a ADB Country Operations Business Plan : Republic of the Marshall Islands. Manila

10 6 Appendix 3 PROBLEM TREE High incidence of waterborne disease Lagoon polluted, particularly in the vicinity of the sewer outfall. Contaminated fresh water. Poor hygiene practices Frequent sewage overflows and discharge of raw sewage to Lagoon No sewer network on north-western side of Ebeye. Limited access to safe water Limited knowledge of effective hygiene practices Dilapidated sewer network Inadequate operations and maintenance budget Sewage treatment plant not operational. Saltwater sewerage system and marine environment results in higher maintenance requirements Households unable to afford chemicals ( bleach ) periodically required to disinfect rainwater tanks Poor maintenance of rainwater tanks. Limited knowledge of how to ensure water stored in rainwater tanks is safe. Desalination plant not operating at design capacity Reactive and limited maintenance of water supply network and RO Plant. Rainwater harvesting unable to provide secure water supply to some households Rainwater tanks run dry during prolonged dry periods Cost of imported water very high. No user charges for sewerage services. Inadequate operations and maintenance budget Rainwater tank capacity too small to meet water requirements of large households Rainwater harvesting potential, at the household level, often not maximized. Downpipes and roof gutters poorly maintained. Willingness to pay for water and sewerage services limited. High operation cost Limited application of water charges Households unable to afford additional guttering and roofing materials to maximize rainwater catchment Households unable to afford the materials required to maintain gutters and downpipes. Limited knowledge of the costs associated with delivery of sewerage services. RO plant inefficient and energy hungry High energy cost Service connections not metered. Some members of the community unwilling to pay for water Trend for longer and more frequent dry periods. Reliance on imported fuel for energy generation Inefficient diesel generators and high energy losses in electricity distribution system Limited knowledge of the costs associated with delivery of sewerage services.

11 7 Appendix 7 DESIGN AND MONITORING FRAMEWORK Design Summary Impact Reduced incidence of waterborne disease on Ebeye Performance Targets and Indicators with Baselines The number of reported cases of waterborne diseases on Ebeye (5-year rolling average) comprising amoebiasis, cholera, diarrhea, gastroenteritis, and ascariasis reduced to less than 800 by 2022 (baseline 2011: 5-year rolling average = 1,021 reported cases). Data Sources and Reporting Mechanisms Ministry of Health and Ebeye Hospital annual reports. Assumptions and Risks a Assumptions Living conditions on Ebeye do not deteriorate. Outcome Access to new or improved water supply and sanitation services. The proportion of RMI s urban population with access to safe water increases to 95% by 2017 (baseline 2010: 92%). The proportion of RMI s urban population with access to improved sanitation increases to 90% by 2021 (baseline 2010: 83%). United Nations Millennium Development Goal Reports Assumptions The Ebeye community and RMI leadership remain committed to improving waste supply and sanitation services on Ebeye. Risks Population growth on Ebeye exceeds growth projections. Outputs 1. Enhanced awareness of hygiene and water issues and sustained improved hygiene behavior. At least 80% women on Ebeye are informed of the benefits of improved hygiene and improved hygiene techniques by 2021 (baseline to be established during PPTA). By 2021, 90% of children on Ebeye between the age of 5 and 15 years have participated in hygiene awareness programs (delivered in schools or at youth group meetings) on benefits of improved hygiene and improved hygiene techniques (baseline to be established during PPTA). Household health survey reports. Ministry of Education and household health survey reports. Assumptions Knowledge of improved hygiene and improved hygiene behavior is applied within households. Information on the benefits of improved hygiene and improved hygiene techniques is shared widely within the Community. Risks Knowledge of improved hygiene and improved hygiene techniques is not sustained. 2. Secure and safe freshwater supplies. The minimum quantity of fresh water available to all residents of Ebeye is 50 KAJUR monthly and annual freshwater Assumptions Energy (electricity) required to operate desalination plants

12 8 Appendix 2 Design Summary 3. Effective, efficient and safe sewerage services. 4. KAJUR is financially and technically sustainable. Performance Targets and Indicators with Baselines liters per person per day by 2021 (baseline 2011: 44 liters per person per day). The number of overflows from the sewer network over a 12-month period reduces by 50% by 2021 (baseline to be established during PPTA) KAJUR fully recovers operations and maintenance costs power, water and sewerage revenue by 2021 (baseline fiscal year 2011: loss of $1,864,778). Losses in KAJUR electricity generation and distribution system are reduced to less than 15% by 2021 (baseline 2012: 30%). At least 80% of KAJUR staff successfully complete gender sensitivity, hygiene, and sanitation training by 2017 (2012 baseline: 0% of staff trained). Data Sources and Reporting Mechanisms production reports. KAJUR monthly and annual reports. Annual independent audit reports. KAJUR annual reports. KAJUR monthly and annual reports. KAJUR monthly and annual reports. Activities with Milestones 1. Enhanced awareness of hygiene and water issues and sustained improved hygiene practices 1.1 Assessment of current hygiene practices, motivations, and facilities including a comprehensive household survey of hygiene practices, perceptions on waterborne disease, and expectations of the public water supply and sanitation services completed and data analyzed within 3 months of PPTA inception. 1.2 Hygiene awareness program, focusing on school children and womens groups, designed within 5 months of PPTA inception and implemented over the full duration of the PPTA and ensuing investment project. 1.3 Annual surveys of households to assess the effectiveness of the awareness program conducted annually throughout the project implementation period commencing in Secure and safe freshwater supplies. 2.1 A survey, including mapping of water supply assets in a GIS database, Assumptions and Risks a remains available. Assumptions The electricity supply to the sewage pump stations remains reliable. Assumptions The Ebeye community and RMI leadership remain committed to reforming KAJUR. KAJUR remains committed to proactive asset management. Risks Community willingness to pay for KAJUR water supply and sewerage services is not sustained. Inputs Loan ADB: $0.0 Item Amount ($ million)

13 Appendix 2 9 Activities with Milestones and assessment of the condition of all KAJUR water supply assets completed within 3 months of the PPTA inception. 2.2 A water supply demand forecast for the period for low, medium, and high population growth scenarios developed within 3 months of the PPTA inception. 2.3 A water supply master plan, including a prioritized and costed investment plan that considers both renewable and diesel options, for the period agreed with stakeholders within 6 months of PPTA inception. 2.4 Bid documents for selected high priority water supply investments identified in the water supply master plan prepared within 9 months of PPTA inception. 2.5 Selected high priority investments implemented by December Effective, efficient and safe sewerage services 3.1 A survey, including mapping of sewerage assets in a GIS database, and assessment of the condition of all KAJUR sewerage assets completed within 3 months of the PPTA inception. 3.2 A sewer load forecast for the period for low, medium, and high population growth scenarios developed within 3 months of the PPTA inception. 3.3 A sewerage master plan, including a prioritized and costed investment plan, for the period agreed with stakeholders within 6 months of PPTA inception. 3.4 Bid documents for selected high priority water supply investments identified in the water supply master plan prepared within 9 months of PPTA inception. 3.5 Selected high priority sewerage investments implemented by December KAJUR is financially and technically sustainable 4.1 Review of the KAJUR institutional structure and identification of human resources needs completed within 6 months of PPTA inception. 4.2 KAJUR capacity development program prepared and approved by KAJUR Board within 9 months of PPTA inception. 4.3 KAJUR human resources capacity development program completed by December Financial management plan, including review and reform of tariff policies is agreed by key stakeholders within 6 months of the PPTA inception. 4.5 Asset management plans covering KAJUR water supply, sewerage, and electricity services approved by KAJUR Board within 18 months of the PPTA inception. 4.6 Reformed tariff policies fully implemented by December Inputs Government: Item Amount ($ million) PPTA $0.1 Investment project (in-kind) TBD Grant Government of Australia: To be determined Item Amount ($ million) PPTA $0.50 Investment TBD project Multi-Donor Trust Fund under the water Financing Partnership facility 8 Item PPTA Amount ($ million) $0.50 KAJUR = Kwajalein Atoll Joint Utilities Resources; PPTA = project preparatory technical assistance; TBD = to be determined. Source: Asian Development Bank 8 Contributors: the governments of Australia, Austria, Norway, Spain and Switzerland.

14 10 Appendix 2 A. Justification PROJECT PREPARATORY TECHNICAL ASSISTANCE 1. The project preparatory technical assistance (PPTA) will assist KAJUR to prepare asset management plans (AMPs) to improve delivery of water supply and sanitation services on Ebeye and build the financial and technical sustainability of KAJUR. The PPTA will also prepare detailed designs and bidding documents and undertake the due diligence for an ensuing investment project comprising selected high priority water supply, sanitation, and electricity supply investments. B. Major Outputs and Activities 2. The PPTA will be implemented in 2 phases. Phase 1 will: (i) assess water supply, sanitation and electricity services; (ii) identify constraints and opportunities for the sustainable delivery of safe water, sanitation and power services; and (iii) prepare the water supply, sanitation and electricity master plans and associated prioritized and costed investment plans. Phase 1 will be implemented over a period of 6 months and followed by a 6-week stakeholder review and decision period. Phase 2 will be implemented over a period of 9 months and will prepare: (i) the water supply, sanitation, and electricity supply AMPs; (ii) detailed designs and bidding documents for selected high priority investments identified in the AMPs; and (iii) the due diligence for the proposed investment project. The major outputs and activities are summarized in Table A4.1. Table A4.1: Summary of Major Outputs and Activities Major Activities Expected Completion Date Major Outputs Expected Completion Date Phase 1 (i) Review of existing data and identify 7 March 2013 Inception report 7 March 2013 any changes required to the PPTA scope. (ii) Assessment of current hygiene 13 June 2013 a) Hygiene situational report 3 May 2013 practices, motivations, and facilities, including HH Survey data and comprehensive household (HH) survey of analysis. hygiene practices, perceptions, and b) Hygiene awareness 31 May 2013 expectations of public water supply and sanitation services, and design of a program design workshop c) Hygiene awareness 13 June 2013 hygiene awareness program. program design report (iii) Implementation of the hygiene 21 March 2014 Bi-monthly awareness 21 March 2014 awareness program. (iv) Survey, GIS mapping, and condition assessment of KAJUR water supply, sewerage, and electricity supply assets. (v) Preparation of a water safety plan for Ebeye. (vi) Preparation of water supply, sewerage, electricity supply master plans, including investment plans. (vii) Review of the KAJUR institutional structure and identification of human resources needs. program progress reports 3 May 2013 KAJUR asset survey report 3 May June 2013 Workshop Water Safety Plan 11 July 2013 Workshop Master Plans and associated investment plans 11 July 2013 Workshop KAJUR institutional and human resources development plan 31 May June June July June July 2013

15 Appendix 2 11 Major Activities (viii) Review KAJUR s financial management framework and policies, and prepare a financial management plan, including tariff reform policies. Phase 2 (i) Preparation of water supply, sewerage, and electricity AMPs. (ii) Due diligence (economic, financial, environmental including climate change - and social safeguards, governance, and institutional capacity) of selected high priority investments identified in the water supply, sanitation, and electricity supply master plans. (iii) Detailed designs and bid documents for selected high priority investments. Source: Asian Development Bank Expected Completion Date Major Outputs 11 July 2013 Workshop Financial management plan 21 March 2014 Workshop Approved AMPs, 17 October 2013 Economic assessment report Financial management assessment Procurement assessment Initial environmental assessment(s) Resettlement plan(s) Gender action plan 1 May 2014 Bid documents, draft final report Expected Completion Date 27 June July March March October October October October October October May 2014 C. Cost Estimate and Proposed Financing Arrangement 3. The TA is estimated to cost $1,000,000 equivalent, which will be financed on a grant basis by the Government of Australia ($500,000) and the Multi-Donor Trust Fund under the Water Financing Partnership Facility ($500,000). 9 The government will provide counterpart staff, office space, communication facilities for consultants, and other in-kind contributions. The detailed cost estimate is presented in Table A4.2. Table A4.2: Cost Estimates and Financing Plan ($'000) Government of Australia b MDTF- WFPF c Total Item a Amount % Amount % Cost 1. Consultants a. Remuneration and per diem i. International consultants (28 person-months) ii. National consultants (23.5 person-months) b. International and local travel c. Reports and communications Workshops, training, seminars, and conferences d a. Facilitators b. Training program Surveys Representative for contract negotiations e Contingencies Total ,000.0 MDTF-WFPF = Multi-donor Trust Fund under the Water Finance Partnership Facility. a To be disbursed on a pro rata basis. b Administered by ADB. The amount financed by the Government of Australia also includes ADB's administration fee, audit costs, bank charges, and a provision for foreign exchange fluctuations (if any), to the extent that these items are not covered by the interest and investment income earned on this grant, or any additional grant from the Government of Australia. 9 Contributors: the Governments of Australia, Austria, Norway, Spain, and Switzerland

16 12 Appendix 2 c. d Contributors: the Governments of Australia, Austria, Norway, Spain, and Switzerland Workshops, training, seminars, and conferences (to be administered by the PPTA consultants) Purpose Venue Hygiene awareness and education program and workshops Ebeye, Republic of Marshall Islands (10 No. with up to 20 participants per workshop). e In accordance with the project administration instructions on recruiting consulting firms for TA assignments, the user division, in consultation with COSO, will decide on the mode of negotiation. Negotiations are usually conducted by correspondence when the assignment budgets are equal to or less than $600,000. ADB Specific Requirements for Recruiting Consultants by ADB. Project Administration Instructions. PAI Manila. Source: Asian Development Bank 4. KAJUR will provide office space and furniture, utilities, and access to telecommunication facilities for the consultants recruited to assist with the implementation of the PPTA. The proceeds of the TA will be disbursed in line with ADB s Technical Assistance Disbursement Handbook (2010, as amended from time to time). D. Consulting Services 5. A firm will be engaged in accordance with ADB Guidelines on the Use of Consultants (2010, as amended from time to time), using quality- and cost-based selection procedures (90:10) and a simplified technical proposal, to assist the PMU to prepare the project. A total of 13 international consultants and 4 national consultants will be engaged over a 15-month period, for a total of 28.0 person months of international input and 23.5 person months of national input. The PPTA, among other tasks, will address the following aspects relating to the ensuing loan project: (i) detailed grant executing agency and implementing agency capacity assessment, and suggested remedial action plan to build capacity to minimize procurement and financial management risks and the design of disbursement arrangements and fund flow mechanism for the ensuing project, based on the results of the assessment; (ii) proposed grant related procurement plan; and (iii) indicative implementation schedule with proposed procurement milestones. Positions International Team Leader / Water Supply Specialist Table A4.3: Summary of Consulting Services Requirement Inputs Minimum qualifications and experience (Months) 4.25 Degree in civil engineering; 15 years experience in planning and design of small water supply systems, strong team leadership experience. Sanitation Engineer 2.5 Degree in civil engineering; 10 years experience in planning and design of centralized sewerage systems. Electrical Engineer 2.5 Degree in civil engineering; 10 years experience in planning and design of electricity supply systems. Financial Management Specialist Hygiene Awareness Specialist 3.25 Degree in accounting or financial management; 10 years experience in preparing project financial analysis and financial performance assessments for service utilities. 2.5 Degree in a relevant social science; 10 years experience in designing and implementing hygiene awareness programs. Community Participation & Development Specialist 0.5 Degree in a relevant social science; 10 years experience in the design and implementation of participatory community engagement processes. Poverty, Gender, and 2.0 Degree in a relevant social science; 10 years experience

17 Appendix 2 13 Positions Inputs Minimum qualifications and experience (Months) Resettlement, Specialist in social safeguards, participatory planning and poverty and gender analysis. GIS / CAD Specialist 2.0 Diploma or degree in GIS, CAD, or remote sensing; 10 years experience with GIS/CAD software. 1.5 Degree in engineering or asset management; 10 years experience in design and implementation AMPs. Asset Management Specialist Environment specialist 1.5 Degree in environmental engineering or environmental sciences; 10 years experience in environmental assessment for urban infrastructure projects. Institutional Development Specialist 2.0 Degree in an engineering discipline, law, or finance; 10 years experience in diagnostic assessment of water/sanitation or power utility performance. Quantity Surveyor 2.0 Formal qualifications in quantity surveying, cost estimation or equivalent; 5 years experience. Economist 1.5 Post-graduate degree in economic or equivalent; 10 years experience in economic analysis of water supply, sanitation and electricity supply projects. National Municipal Engineer / Deputy Team Leader 6.5 Degree in civil engineering; 10 years experience in the planning and design of water and sanitation projects. GIS / CAD Specialist 3.0 Diploma or degree in GIS, CAD, remote sensing or Community Participation & Development Specialist equivalent; 5 years experience with GIS/CAD software Diploma or degree in a relevant social science; 5 years of experience in the design and implementation of participatory community engagement processes. Environmental Specialist 3.5 Degree in environmental engineering, science or related field; 5 years experience in the conduct of environmental assessment of proposed development projects. Source: Asian Development Bank E. Implementation Arrangements 6. The Office of the Chief Secretary will be the executing agency (EA) and KAJUR will be the project implementing agency (IA) for the PPTA. Implementation of the PPTA is expected to commence in 23 November 2012 and be completed by 6 June A project steering committee (PSC) will be established to provide strategic direction and guidance for the PPTA and will meet quarterly. A project management unit (PMU) will be established within KAJUR to prepare the project with assistance from the PPTA consultants The proposed TA processing and implementation schedule is listed in Table A4.4. Table A4.4: Technical Assistance Processing and Implementation Schedule Major Milestones Expected Completion Date Concept approval 9 November 2012 PPTA consultants recruited and fielded 1 March 2013 Phase I complete 16 August 2013 Stakeholder review and decision period 27 September 2013 Investment project due diligence complete 22 November 2013 Phase II complete (Physical completion) 6 June 2014 Financial closure of the PPTA 6 October 2014 Source: Asian Development Bank 10 The composition of the PSC and PMU is described in paragraph 13 of the main text.

18 14 Appendix 2 INITIAL POVERTY AND SOCIAL ANALYSIS Country: Republic of Marshall Islands Project Title: Ebeye water Supply and Sanitation Project Lending/Financing Modality: Project Grant Department/ Division: PARD / PAUS I. POVERTY ISSUES A. Links to the National Poverty Reduction Strategy and Country Partnership Strategy The project will address factors which result in the high incidence of waterborne disease on Ebeye, an island within Kwajalein Atoll. Ebeye has an area of approximately 31 hectares and a population of more than 9,600, making Ebeye one of the world s most densely populated areas (about 31,000 persons per km2). Ebeye has a high incidence of waterborne disease. From 2001 to 2011, the number of cases of waterborne disease, primarily gastroenteritis, recorded by Ebeye Hospital averaged 1,182 cases per year or 1 reported case per 8 residents per year. The project will improve access to safe water and sanitation and promote behavioral change to improve hygiene standards. The project is consistent with RMI s strategic development strategy, Vision 2018, to improve the level of hygiene and sanitation and to provide reliable and affordable water and sanitation infrastructure. The project is also aligned with: (i) ADB s Strategy 2020 to contribute to improved public health through water and sanitation investments, (ii) ADB s Approach to Assisting the Pacific ( ) to improve the supply and delivery of water and sanitation services, and (iii) ADB s Water Policy and Water Operational Plan to increase efficiency and productivity in the delivery of water services and improving the level of service delivery. B. Targeting Classification General Intervention Individual or Household (TI-H) Geographic (TI-G) Non-Income MDGs (TI-M1, M2, etc.) Explain the basis for the targeting classification: The Project will address the factors which result in a high incidence of waterborne disease on Ebeye. This will be achieved by improving water supply and sanitation services and fostering behavioral changes within the community to improve hygiene standards. The project will also assist KAJUR in designing and implementing institutional reforms required to ensure the financial and technical sustainability of water supply, sewerage, and electricity supply services. C. Poverty Analysis 1. If the project is classified as TI-H, or if it is policy-based, what type of poverty impact analysis is needed? Not applicable. 2. What resources are allocated in the PPTA/due diligence? Not applicable. 3. If GI, is there any opportunity for pro-poor design (e.g., social inclusion subcomponents, cross subsidy, pro-poor governance, and pro-poor growth)? The project will provide improved access to safe water and sanitation to all sections of the community including those located at the north-western end of Ebeye which are not serviced by public water supply and sewerage networks. II. SOCIAL DEVELOPMENT ISSUES A. Initial Social Analysis Based on existing information: 1. Who are the potential primary beneficiaries of the project? How do the poor and the socially excluded benefit from the project? The primary beneficiary is the Ebeye community. Lack of access to adequate water supply and sanitation services and ineffective hygiene practices within the community are the main causes for water-borne disease. Primary beneficiaries include women and children. Women will benefit from improved sanitation such as access to household toilets which will eliminate the need to openly defecate on beaches or in the lagoon which can pose a risk to safety after daylight hours. Also, as primary caregivers, women s productivity can be expected to increase if there are reduced incidences of sickness and disease among household members since less time

19 Appendix 7 15 will be dedicated to caring for sick family members. Children can be expected to benefit through reduced rates of infant mortality. Human capital development among children can be expected to improve if reduced cases of water-borne illness result in better school attendance and improved concentration in school. In addition, reduced disease and water-borne illness such as dysentery and diarrhea will reduce the burden of healthcare costs on households such as travel and waiting times incurred to consult healthcare professionals and spending on drugs to treat illness. 2. What are the potential needs of beneficiaries in relation to the proposed project? The needs of the beneficiaries are: (i) better access to improved water supply and sanitation services, and (ii) increased awareness on hygiene and the links between poor sanitation and sickness and disease. 3. What are the potential constraints in accessing the proposed benefits and services, and how will the project address them? Potential constraints in accessing proposed benefits and services include lack of awareness on the link between poor sanitation and hygiene practices, and poor health outcomes. To address this constraint, the project will include an intensive and long-duration community awareness and education program on the need for improved hygiene and effective hygiene practices. B. Consultation and Participation 1. Indicate the potential initial stakeholders. Potential stakeholders include the National and the Kwajalein Local Government, KAJUR, nongovernment organizations, development partners, the private sector, and Ebeye households. An initial stakeholder analysis will be developed to identify interest groups will be carried out as part of project preparatory activities. 2. What type of consultation and participation (C&P) is required during the PPTA or project processing (e.g., workshops, community mobilization, involvement of nongovernment organizations and community-based organizations, etc.)? A key design feature of the project is the intense community engagement that will be carried out during all stages of project design and implementation. This will include carrying out community consultations with assistance from nongovernment organizations, and awareness-raising activities by engaging women s and youth groups to spread messages on good hygiene and sanitation practices. 3. What level of participation is envisaged for project design? Information sharing Consultation Collaborative decision making Empowerment 4. Will a C&P plan be prepared during the project design for project implementation? Yes No Please explain. C. Gender and Development Proposed Gender Mainstreaming Category: Effective gender mainstreaming 1. What are the key gender issues in the sector/subsector that are likely to be relevant to this project/program? Women play an important role in promoting good health and sanitation practices in households in RMI, with children learning important lessons on hygiene from their mothers. As primary caregivers, productivity of women may be adversely affected by time taken away from productive activities such as paid employment, to care for sick family members affected by water-borne diseases. Public awareness activities targeted at women are likely to improve children s health and behavior such as encouraging the use of hand-washing. 2. Does the proposed project/program have the potential to promote gender equality and/or women s empowerment by improving women s access to and use of opportunities, services, resources, assets, and participation in decision making? Yes No Please explain. Women will benefit from improved water supply and sanitation services that will result from the project. A gender action plan will be prepared as part of PPTA activities. 3. Could the proposed project have an adverse impact on women and/or girls or to widen gender inequality? Yes No Please explain

20 16 Appendix 7 Issue III. Involuntary Resettlement Indigenous Peoples Labor Employment Opportunities Labor Retrenchment Core Labor Standards Affordability SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS Nature of Social Issue Permanent and temporary land acquisition could be required. The extent of potential resettlement impacts will become apparent during project preparation. Most of the population has ethnic origins in RMI and consider themselves as indigenous. However, under the ADB definition of indigenous peoples, i.e., a group or cultural identity distinct from that of the dominant or mainstream society, there are no indigenous peoples in RMI. Construction contractors should seek to give opportunities for engagement of local labor. Any employment through the project will adhere to core labor standards. Under the project, tariffs will be set according to willingness and ability to pay for water supply and sanitation services. It is anticipated that any increase in tariffs will be offset by a reduction in household spending on treatment of waterborne diseases which are associated with poor sanitation. Significant/Limited/ No Impact/Not Known Limited. No impact. No impact. Limited impact. Plan or Other Action Required Resettlement plan None The PPTA will confirm if indigenous islanders who recognize themselves as indigenous peoples will merit them to be considered "Indigenous Peoples" for application of the SPS and for this project No Action No Action No other risks perceived. No impact. No Action Other Risks and/or Vulnerabilities HIV/AIDS Human Trafficking Others (conflict, political instability, etc.), please specify IV. PPTA/DUE DILIGENCE RESOURCE REQUIREMENT 1. Do the TOR for the PPTA (or other due diligence) include poverty, social and gender analysis and the relevant specialist/s? Yes No 2. Are resources (consultants, survey budget, and workshop) allocated for conducting poverty, social and/or gender analysis, and C&P during the PPTA/due diligence? Yes No The PPTA will provide (i) an international Community Participation & Development Specialist (0.5 person-months); (ii) an international Poverty, Gender, and Resettlement, Specialist 92.0 person-months); (iii) a national Community Participation & Development Specialist (10 person-months); (vi) $10,000 for workshops, training and seminars; and (v) $60,000 for surveys.