Project Administration Manual. Project Number: Loan Number: November Kingdom of Cambodia: Provincial Roads Improvement Project

Project Administration Manual Project Number: 43309 Loan Number: November 2011 Kingdom of Cambodia: Provincial Roads Improvement Project

ABBREVIATIONS Contents I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 3 A. Project Readiness Activities 3 B. Overall Project Implementation Plan 3 III. PROJECT MANAGEMENT ARRANGEMENTS 5 A. Project Implementation Organizations Roles and Responsibilities 5 B. Key Persons Involved in Implementation 7 C. Project Organization Structure 7 IV. COSTS AND FINANCING 9 A. Detailed Cost Estimates by Expenditure Category 9 B. Allocation and Withdrawal of Loan Proceeds 11 C. Detailed Cost Estimates by Financier 14 D. Detailed Cost Estimates by Outputs 15 E. Detailed Cost Estimates by Year 16 F. Contract and Disbursement S-curve 17 G. Fund Flow Diagram 18 V. FINANCIAL MANAGEMENT 19 A. Financial Management Assessment 19 B. Disbursement 19 C. Accounting 20 D. Auditing 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 23 D. Consultant s Terms of Reference 27 VII. SAFEGUARDS 60 VIII. GENDER AND SOCIAL DIMENSIONS 67 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 69 A. Project Design and Monitoring Framework 69 B. Monitoring 72 C. Evaluation 76 D. Reporting 76 E. Stakeholder Communication Strategy 77 X. ANTICORRUPTION POLICY 81 XI. ACCOUNTABILITY MECHANISM 82 XII. RECORD OF PAM CHANGES 83 i

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 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. 2. The Ministry of Public Works and Transport (MPWT) is wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with Government and ADB s policies and procedures. ADB staff is responsible to support implementation including compliance by MPWT 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 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 CBF cross-border facility CBRS community-based road safety DBST double bituminous surface treatment DDIS detailed design and implementation supervision EIA environmental impact assessment EMP environmental management plan FIDIC Fédération Internationale des Ingénieurs-Conseil HHTPP HIV/AIDS and human trafficking prevention program ICB international competitive bidding IEE initial environmental examination km kilometer LGAP labor and gender action plan M&E monitoring and evaluation MEF Ministry of Economy and Finance MPWT Ministry of Public Works and Transport NAA National Aids Authority NCB national competitive bidding NGO non-government organization NR national road NRSAP national road safety action plan PAM project administration manual PMU project management unit PPCR pilot program for climate resilience PPMS project performance and management system QCBS quality- and cost based selection RAMC rural asset management consultant RGC Royal Government of Cambodia RRP report and recommendation of the president RSC resettlement sub-committee SOE statement of expenditure SPS Safeguards Policy Statement STI sexually-transmitted infections SEO social and environment office TOR terms of reference UNIAP UN Interagency Project on Trafficking UXO unexploded ordnance WIM weigh in motion

I. PROJECT DESCRIPTION A. Rationale 1. The project aims to rehabilitate about 157 kilometer (km) of provincial roads in Kampong Chhnang, Kampong Speu, Prey Vang, and Svay Rieng provinces to climate resilient paved condition. The rehabilitation program will provide a safer, cost-effective provincial road network with all-year access to markets and other social services for provincial centers of southeastern and mid-western Cambodia. A new cross border facility (CBF) will be constructed at Prey Var, Svay Rieng to facilitate efficient cross border transport and trade between Cambodia and Vietnam. The project will support a sustainable road maintenance regime in the Ministry of Public Works and Transport (MPWT), community-based road safety measures, HIV/AIDS and human trafficking prevention program (HHTPP), and climate resilient measures. B. Impact and Output 2. The impact of the project is improved access to markets, jobs, social services in four project provinces of Kampong Chhnang, Kampong Speu, Prey Veng, and Svay Rieng. This impact is consistent with the sector results framework of Cambodia Transport Sector Assessment, Strategy, and Roadmap. 1 The outcome of the project is a safe, climate-resilient and cost effective road network that provides all-year access in the agricultural areas of the project provinces. 3. There are five outputs in the project. The first output is civil works to: (i) rehabilitate 88 km of road to climate resilient paved condition National Road (NR) 13 connecting NRs 8 and 1, between Komchay Mear and Prosot, and NR 314D from Prosot to the border of Vietnam at Prey Var, Svay Rieng; (ii) construct a new CBF at Prey Var, Svay Rieng; and (iii) rehabilitate 69.6 km of road to climate resilient paved condition; NR 150B from Ta Ches to Tek Phos, NR 53 from Khlong Popok to Kampong Speu border, and from there to Amleang (NR 151B). This output includes associated detailed design and implementation supervision (DDIS) consulting services, and land acquisition and resettlement required for the project roads and the CBF. 4. The second output is improved road asset management through axle load control at strategic locations of national and provincial roads which expands and improves MPWT s ongoing axle load control program. Recent interventions by the Asian Development Bank (ADB) to install and operate permanent weighbridges at seven key locations in the country, as well as the establishment of a Permanent Axle Overload Control Committee in MPWT have reduced overloading. The continued interventions of the project are expected to contribute to further reduction in overloading. 5. The third output is increased road safety and social safeguards implementation through: (i) a community-based road safety awareness program in line with the national program; (ii) an HHTPP); and (iii) a sex-disaggregated baseline socioeconomic survey of beneficiaries. 6. The fourth output is increased climate resilience of the project roads. This output will include an assessment of the vulnerability of MPWT s road network to climate change and vulnerability mapping to improve planning for climate changes and introducing ecosystembased adaptation strategies. The output will also develop emergency management planning for project roads and planning water capture and storage systems. A mixture of civil works 1 ADB. 2011. Cambodia Transport Sector Assessment, Strategy, and Roadmap. Manila

2 adjustments, hazard mapping, green or ecosystem based measures, and policy and planning activities are included here to manage climate change impacts. The emergency management intervention will be a pilot in Kampong Chhnang province, which will be designed as highlycommunity based one with participation of Red Cross to sustain the emergency medical facilities. This output is described in detail in a web-link in Appendix 2. 7. The fifth output is efficient project management support to the entire MPWT. The project will have substantial positive employment and gender impacts in the rural communities. The labor and gender mainstreaming action plan (web-linked document) describes the labor and gender-mainstreaming aspects associated with the project outputs. 8. Table 1.1 provides the list of road sections that will be improved under the Project. Table 1.1 List of Roads for Improvement Contract Package Road. No. Province From To Length (km) NR 13 Prey Veng/Svay NR 8 NR 1 62.4 Rieng 314D Svay Rieng NR 1 at Proseth Border at Prey Var 25.6 150 B East (east of NR 5) 150 B West (west of NR 5) Alangkae local road NR 53 Kampong Chhnang Kampong Chhnang Kampong Chhnang Kampong Chhnang NR5 Taches market 5.6 NR5 Tuok Phos 25.6 150B 150B 3.0 Tuek Phos (culvert 7) Junction with 151B 151B Kampong Speu NR 53 Thnal Bambeak (Amleang) 3.6 Total 157.6 km = kilometer, NR = national road. 31.8

3 II. IMPLEMENTATION PLANS A. Overall Project Implementation Plan 9. The Project is expected to be implemented over a period of 5 years, for completion by 31 March 2017. Overall project implementation plan is in Figure 2.1. The overall project implementation plan will be updated annually by MPWT and ADB based on actual physical progress. 10. The MPWT will be the executing agency of the project. The project management unit 3 (PMU3), as part of the General Department of Public Works of MPWT, will be the implementing agency of the project. It is expected that civil works contracts for road rehabilitation and CBF rehabilitation will follow International Competitive Bidding (ICB) as the mode of procurement. Equipment for axle load control will follow National Competitive Bidding (NCB) or Limited International Bidding. Advance action for consulting services is planned to recruit firms for DDIS, road asset management, climate resilience and HHTPP. Advance action for recruitment of DDIS consultants will be considered. The project will be implemented over 5 years, from 2012 to 2017. B. Project Readiness Activities 11. PMU3 had been established since 2001. A draft invitation for expressions of interests has been prepared and consultant selection process for the detailed design, implementation and supervision is expected to commence in October 2011. Overall project readiness activities are in Table 2.1: Table 2.1 Project Readiness Activities 2011 2012 Who is Indicative Activities Oct Nov Dec Jan Feb Mar Apr responsible Advance action MPWT/MEF and ADB Establish project MPWT implementation arrangements Government counterpart MEF/MPWT funds allocation and budget inclusion ADB Board approval ADB Loan signing RGC and ADB Issuance of legal opinion RGC Loan effectiveness RGC and ADB ADB = Asian Development Bank, MEF = Ministry of Economy and Finance, MPWT = Ministry of Public Works and Transport, RGC = Royal Government of Cambodia.

4 Figure 2.1 Overall Project Implementation Plan 2011 2012 2013 2014 2015 2016 O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O CS1: DDIS, Consulting Services for Design and Construction Advance Action (DDIS Recruitment) Detailed Design UXO and Demining Assessment Land and Resettlement Procurement CW-A Procurement CW-B Procurement CW-C Community-Based Road Safety Program Preparation for a Future Project Labor and Gender Action Plan CW-A: Road Improvement (NR13) UXO and Mine Clearance Road improvement CW-A (NR13) Improved Reinstatement of Borrow-pits (NR13) DDIS Supervision Services for CW-A CW-B: Road Improvement (314D) and CBF UXO and Mine Clearance Road Improvement CW-B (314D) Improvement of CBF Improved Reinstatement of Borrow-pits (314D) DDIS Supervision Services for CW-B (314D and CBF) CW-C: Road improvement (150B, NR53, 151B) UXO and Mine Clearance Road Improvement CW-C (midwest) Improved Reinstatement of Borrow-pits (150B) Improved Reinstatement of Borrow-pits (NR53) DDIS Supervision Services for CW-C CS2: Improved Asset Management through Axle Load Control CS3: HHTPP HHTPP Recruitment HHTPP Implementation MPWT Recruitment of Consulting Services for Climate Resilience CS4: Consulting Services for Climate Resilience CW-D Climate Change Resilience Civil Works Climate Resilience, Green Planting Improved Water Capture Infrastructure PMU3 Efficient Project Management CBF = cross-border facility, CS = consulting services, CW = civil works, DDIS = detailed design and implementation supervision, HHTPP = HIV/AIDS and human trafficking prevention program, MPWT = Ministry of Public Works and Transport, NR = national road, PMU = project management unit, UXO = unexploded ordnance. 2017

5 III. PROJECT MANAGEMENT ARRANGEMENTS A. Project Implementation Organizations Roles and Responsibilities Project implementation organizations Ministry of Public Works and Transport (Executing Agency) Project Management Unit 3 Ministry of Economy and Finance (MEF) Management Roles and Responsibilities timely provision of agreed counterpart funds for project activities; complying with all loan covenants (sector reforms, social and environmental safeguards, economic, and others); and ensuring project s sustainability during post implementation stage and reporting to ADB on assessed development impacts. overall project implementation, management and coordination; initiate and coordinate effective communication between all stakeholders of the Project; establishing the imprest account and managing it; recruiting consultants; finalizing surveys, detail design, and bidding documents; as the chair of the procurement review committee, approve the contract awards; monitoring and evaluation of project activities and outputs, including periodic review, preparation of review reports reflecting issues and time-bound actions taken (or to be taken); involving beneficiaries and civil society representatives in all stages of project design and implementation; public disclosure of project outputs; quality assurance of works, and services of consultants and counterpart staff; establishing strong financial management system and submitting timely withdrawal applications to ADB, conducting timely financial audits as per agreed timeframe and taking recommended actions; and preparing regular periodic progress reports, and project completion report and their timely submission to ADB ensure that Project implementation complies with Government environmental policies and regulations, ADB s SPS, and provisions of the EMP included in the IEE cleared by ADB. signing the loan agreements for the financing required for the Project;

6 Project implementation organizations Management Roles and Responsibilities monitoring of loan and project implementation; and providing respective coordination and facilitation; allocating and releasing counterpart funds and oversight body for disbursements and resettlement matters; being a member of procurement review committee for consultant selection and procurement; endorsing to ADB the authorized staff with approved signatures for withdrawal application processing; and processing and submitting to ADB any request when required, for reallocating the loan proceeds. Inter-Ministerial Resettlement within MEF Committee endorsing and implementing the resettlement plans external monitoring of the resettlement plan implementation Asian Development Bank assist MPWT and its PMU in providing timely guidance at each stage of the project for smooth implementation in accordance with the agreed implementation arrangements and agreed procurement procedures; review all the documents that require ADB approval; conduct periodic loan review missions, a mid-term review, and a project completion mission; ensure compliance of all loan covenants review and monitoring of project implementation activities and compliance with loan covenants (sector reforms, social and environmental safeguards, economic, and others); timely process withdrawal applications and release eligible funds; ensure the compliance of financial audits recommendations; regularly update the project performance review reports with the assistance of MPWT; and regularly post on ADB web the updated project information documents for public disclosure, and the safeguards documents as per disclosure provision of the ADB safeguards policy statement. ADB = Asian Development Bank, EMP = environmental management plan, IEE = initial environmental examination, PMU = project management unit, MPWT = Ministry of Public Works and Transport, SPS = safeguards policy statement.

7 B. Key Persons Involved in Implementation Executing Agency Ministry of Public Works and Transport H. E. Chhin Kong Hean Project Director Phnom Penh, Cambodia Telephone No: +855-2-323-0878 Email address: CHHIN.Hean@yahoo.com Mr. Pheng Sovicheano Project Manager Phnom Penh, Cambodia Telephone No: +855-2-323-0725 Email address: psovicheano@online.com.kh ADB Transport and Communications (SETC) Mission Leader James P. Lynch Director, SETC Telephone No. +63 2 632 5928 Email address: jlynch@adb.org Shihiru Date Senior Transport Specialist, SETC Telephone No. +63 2 632 5847 Email address: sdate@adb.org C. Project Organization Structure 12. MPWT has an already established PMU3 to implement, manage and coordinate project activities. The PMU3 is also equipped with the necessary staff, office space, equipment, and facilities to implement the project efficiently. PMU3 will recruit all vacant positions which they plan to complete before loan effectiveness.

8 Organization Structure for Project Implementation Ministry of Public Works and Transport Project Management Unit 3 (PMU3) Project Director Project Manager Social Environment Office Technical Manager Administration Manager Accountant Manager Structural Engineer Procurement Officer Assistant Accountant Road Engineer (Vacant) Website Officer Cross-Border Facility Engineer Senior Counterpart (3 positions; 2 vacant) Social Safeguard Coordinator (2 positions vacant) Administration Staff

9 IV. COSTS AND FINANCING 13. The Project is estimated to cost $78.80 million including taxes and duties of $7.59 million. The total cost includes physical and price contingencies, and interest during implementation. The ADB loan will finance civil works, equipment, related consulting services, project management, interest charge, and contingency totaling $52.00 million equivalent. Pilot Program for Climate Resilience (PPCR) will finance civil works and related consulting services, service charge, and contingency through a $10.00 million loan, and a $7.00 million grant. The Government will finance local taxes, duties, land acquisition and resettlement cost, and contingency amounting to $90 million. PPCR endorsed the financing envelope for Cambodia in June 2011, which included this project as one of the 8 projects. ADB will submit the draft report and recommendation of the president (RRP) of the project in early September 2011 to PPCR for their final approval for financing. Further, PPCR financing will be administered by ADB thus ADB guidelines, policies and procedures apply on PPCR financing. A. Detailed Cost Estimates by Expenditure Category 14. The total cost of the project is estimated at $78.80 million equivalent including taxes, duties, physical and price contingencies, interest, and other charges. The summary of cost estimates for the project is in Table 4.1.

10 Table 4.1 Detailed Cost Estimate by Expenditure Category ($ millions) % Base Costs Foreign Local Total % Foreign A. Base Cost 1. Civil Works CW Package A: - Improve NR 13 (62.4 km) 10.71 9.49 20.20 53.02 29.92 CW Package B: - Improve 314D (25.6 km) - Improve CBF at Prey Var, Svay Rieng CW Package C: - Improve 150B east (5.8 km) 1.53 1.32 2.85 53.68 4.22 - Improve 150B west (25.5 km) 4.44 3.87 8.31 53.43 12.31 - Improve 150B Alangkae local road (3.1 km) 0.07 0.06 0.13 52.85 0.19 - Improve NR 53 (31.8 km) 1.88 1.64 3.52 53.41 5.21 - Improve 151B (3.6 km) 0.24 0.21 0.45 53.33 0.67 - UXO Clearance for 5 roads and CBF at Prey Var, Svay Rieng 0.08 0.08 0.16 50.00 0.24 Land Acquisition - 1.84 1.84 0.00 3.17 DDIS Consulting Services - Consulting Services: 5 roads and CBF - Preparation for a Future Project 3.64 0.41 3.03 0.34 6.67 0.75 54.57 54.67 9.88 1.11 2. Improved Road Asset Management through Axle Load Control 0.77 0.67 1.44 53.47 2.13 3. Increased Road Safety and Safeguards - HIV/AIDS and Human Trafficking Prevention Program 0.12 0.20 0.32 37.50 0.47 4. Improved Climate Resilience 2.53 3.28 5.81 43.55 8.61 5. Efficient Project Management - Project Management - Priority Operating Costs B. Contingency 1. Physical Contingency 2. Price Contingency 4.51 1.96 3.95 2.04 8.46 4.00 53.31 49.00 12.53 5.93 0.25 1.67 1.92 13.02 2.84 0.06 0.32 0.38 15.79 0.56 Subtotal (A) 33.20 34.29 67.21 49.18 100.00 3.32 2.42 2.67 2.06 5.99 4.48 55.43 54.02 8.87 6.64 Subtotal (B) 5.74 4.73 10.47 54.82 15.51 C. Interest During Construction 1.12-1.12 100.00 1.66 Subtotal (C) 1.12-1.12 100.00 1.66 Total (A+B+C) 40.06 39.02 78.80 50.64 117.17 CBF = cross-border facility, CW = civil works, DDIS = detailed design and implementation and supervision, km = kilometer, NR = national road, UXO = unexploded ordnance. Source: Asian Development Bank

11 B. Allocation and Withdrawal of Loan and Grant Proceeds 15. Table 4.2A shows allocation and withdrawal of loan funds under all the categories of the project. Table 4.2B shows allocation and withdrawal of PPCR loan and grant funds under all the categories of the project. Table 4.2A Allocation and Withdrawal of Loan Proceeds CATEGORY Amount Allocated (SDR) Number Item Category Subcategory 1 Works 21,741,000 1A 1B 1C Works Package A Improve NR13 (62.4 km) Works Package B Improve NR314D (25.6 km) and CBF at Prey Var, Svay Rieng Works Package C Improve NRs 150B, 53, 151B (69.6 km) ADB FINANCING Percentage and Basis for Withdrawal from the Loan Account 9,160,000 71% of total expenditure 5,891,000 74% of total expenditure 6,690,000 68% of total expenditure 2 Equipment 394,000 100% of total expenditure* 3 Consulting Services 4,088,000 3A 3B 3C Detailed design and implementation supervision Road asset management program HIV awareness and prevention program 4 Incremental administrative costs 3,479,000 80% of total expenditure* 425,000 100% of total expenditure* 184,000 100% of total expenditure* 1,301,000 89% of total expenditure 4A Project management 1,060,000 87% of total expenditure 4B Priority operating cost 241,000 100% of total expenditure* 5 Interest Charge 698,000 100% of amount due** 6 Unallocated 4,786,000 Total 33,008,000 ADB = Asian Development Bank, CBF = cross-border facility, EQ = equipment, km = kilometer, NR = national road. * Exclusive of taxes and duties imposed within the territory of the Borrower ** On this loan

12 Table 4.2B Allocation and Withdrawal of Loan Proceeds CATEGORY PPCR FINANCING Percentage and Basis for Amount Allocated ($) Withdrawal from the Loan Number Item Category Subcategory Account 1 Works 7,250,000 1A 1B 1C Civil works Package A Improve NR13 (62.4 km) Civil works Package B Improve NR314D (25.6 km) and CBF at Prey Var, Svay Rieng Civil works Package C Improve NRs 150B, 53, 151B (69.6 km) 3 Consulting Services for Detailed Design and Implementation Supervision 3,430,000 17% of total expenditure 1,500,000 12% of total expenditure 2,320,000 15% of total expenditure 1,270,000 20% of total expenditure claimed* 5 Service Charge 20,000 100% of amount due 6 Unallocated 1,460,000 Total 10,000,000 ADB = Asian Development Bank, CBF = cross-border facility, EQ = equipment, km = kilometer, NR = national road, PPCR = Pilot Program for Climate Resilience. * Exclusive of taxes and duties imposed within the territory of the Borrower

13 Table 4.2C Allocation and Withdrawal of Grant Proceeds CATEGORY PPCR FINANCING Percentage and Basis for Amount Allocated ($) Withdrawal from the Grant Number Item Category Subcategory Account 1 Works 3,630,000 1C 1D Civil works Package C Improve NRs 150B, 53, 151B Civil works Package D Climate resilience works 2 Consulting Services for climate resilience 3 Unallocated 1,090,000 Total 7,000,000 860,000 6% of total expenditure 2,770,000 87% of total expenditure 2,280,000 100% of total expenditure* ADB = Asian Development Bank, CBF = cross-border facility, EQ = equipment, km = kilometer, NR = national road, PPCR = Pilot Program for Climate Resilience. * Exclusive of taxes and duties imposed within the territory of the Borrower

14 C. Detailed Cost Estimates by Financier A. Base Cost 1. Civil Works ($ millions) ADB PPCR Loan PPCR Grant Government Total Amount % Amount % Amount % Amount % Amount CW Package A: - Improve NR 13 (62.4 km) 14.43 71.44 3.43 16.98 2.34 11.58 20.20 CW Package B: 74.48 12.04 13.48 - Improve 314D (25.6 km) 6.01 71.04 1.50 17.73 - - 0.95 11.23 8.46 - Improve CBF at Prey Var, Svay Rieng 3.27 81.75 - - - - 0.73 18.25 4.00 CW Package C: 68.35 15.05 5.58 11.02 - Improve 150B east (5.8 km) 1.93 67.72 0.41 14.39 0.21 7.37 0.30 10.53 2.85 - Improve 150B west (25.5 km) 5.60 67.39 1.15 13.84 0.65 7.82 0.91 10.95 8.31 - Improve 150B Alangkae local road (3.1 km) 0.09 69.23 0.02 15.38 - - 0.02 15.38 0.13 - Improve NR 53 (31.8 km) 2.50 71.02 0.63 17.90 - - 0.39 11.08 3.52 - Improve 151B (3.6 km) 0.32 71.11 0.08 17.78 - - 0.05 11.11 0.45 - UXO Clearance for 5 roads and CBF at Prey Var, Svay Rieng 0.10 62.50 0.03 18.75 - - 0.03 18.75 0.16 Land Acquisition - - - - 1.84 100.00 1.84 DDIS Consulting Services - Consulting Services: 5 roads and CBF - Preparation for a Future Project 2. Improved Road Asset Management through Axle Load Control - Consulting Services - Equipment 4.79 0.69 0.67 0.62 3. Increased Road Safety and Safeguards - HIV/AIDS and Human Trafficking Prevention Program 0.29 90.63 - - 0.03 9.38 0.32 4. Improved Climate Resilience - Consulting Services - Civil Works Package D 5. Efficient Project Management - Project Management - Priority Operating Costs B. Contingency 1. Physical Contingency 2. Price Contingency 73.85 71.81 92.00 89.33 89.86 1.27 - - - 17.12 19.04 - - - 0.61 0.06 0.08 0.07 9.03 9.15 8.00 10.67 10.14 6.67 0.75 0.75 0.69 - - - - - - 2.28 2.77 87.02 86.83 0.34 0.42 12.98 13.17 2.62 3.19 89.13 10.87 1.67 86.98 - - - - 0.25 13.02 1.92 0.38 100.00 - - - - - - 0.38 Subtotal (A) 43.36 64.23 8.52 12.62 5.91 8.75 9.42 14.40 67.21 4.33 3.21 72.29 71.65 0.85 0.61 14.19 13.62 0.60 0.49 10.02 10.94 0.21 0.17 3.51 3.79 5.99 4.48 Subtotal (B) 7.54 72.02 1.46 13.94 1.09 10.41 0.38 3.63 10.47 C. Interest During Construction* 1.10 98.21 0.02 1.79 - - - - 1.12 Subtotal (C) 1.10 98.21 0.02 1.79 - - - - 1.12 Total (A+B+C) 52.00 65.74 10.00 12.00 7.00 8.85 9.80 12.77 78.80 ADB = Asian Development Bank, CBF = cross-border facility, CW = civil works; DDIS = detailed design and implementation supervision, km = kilometer; NR = national road, PPCR = pilot program for climate resilience, UXO = unexploded ordnance. * Includes interest charges and service charges. Interest for ADB loan and service charge for Strategic Climate Fund loan during construction have been respectively computed at 1.0% per annum and 0.1% per annum during the grace period. Source: Asian Development Bank

15 D. Detailed Cost Estimates by Outputs A. Base Cost b 1. Civil Works ($ millions) Output 1: Road Rehabilitation Output 2: Road Asset Management Output 3: Road Safety and Safeguards Output 4: Climate Change Adaptation Output 5: Project Management CW Package A: Improve NR 13 (62.4 km) 20.20 0.00 0.00 0.00 0.00 20.20 CW Package B: Improve 314D (25.6 km) and CBF at Prey Var, Svay 12.46 0.00 0.00 0.00 0.00 12.46 Rieng CW Package C: Improve 150B east (5.8 km), 150B west (25.5 km), 15.26 0.00 0.00 0.00 0.00 15.26 150B Alangkae local road (3.1 km), NR 53 (31.8 km), 151B (3.6 km); UXO Clearance for 5 roads and CBF at Prey Var, Svay Rieng 0.16 0.00 0.00 0.00 0.00 0.16 Land Acquisition 1.84 0.00 0.00 0.00 0.00 1.84 DDIS Consulting Services - Consulting Services: 5 roads and CBF - Preparation for a Future Project 6.67 0.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.67 0.75 2. Improved Road Asset Management through Axle Load Control 0.00 1.44 0.00 0.00 0.00 1.44 3. Increased Road Safety and Safeguards 0.00 0.00 0.32 0.00 0.00 0.32 4. Improved Climate Resilience 0.00 0.00 0.00 5.81 0.00 5.81 5. Efficient Project Management 0.00 0.00 0.00 0.00 2.30 2.30 Subtotal (A) 57.34 1.44 0.32 5.81 2.30 67.21 B. Contingency c 1. Physical Contingency 2. Price Contingency 5.12 3.69 0.13 0.06 0.03 0.02 0.50 0.43 0.21 0.28 5.99 4.48 Subtotal (B) 8.81 0.19 0.05 0.93 0.49 10.47 C. Interest During Construction d 0.97 0.04 0.07 0.00 0.04 1.12 Subtotal (C) 0.97 0.04 0.07 0.00 0.04 1.12 Total (A+B+C) 67.12 1.67 0.44 6.74 2.83 78.80 CBF = cross-border facility, CW = civil works, DDIS = detailed design and implement supervision, km = kilometer, NR = national road, UXO = exploded ordnance. a Includes taxes and duties of $7.69 million to be financed from government resources. b c d In mid-2011 prices. Physical contingencies computed at 10% for civil works, field research and development, training, surveys, and studies. Price contingencies computed for foreign exchange costs and local currency costs based on the annual rates in the table below; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. Annual Rate 2011 2012 2013 2014 2015 2016 2017 Foreign Currency 4.9% -3.2% 0.3% 0.5% 0.5% 0.5% 0.5% Local Currency 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% Includes interest charges and service charges. Interest for ADB loan and service charge for Strategic Climate Fund loan during construction have been respectively computed at 1.0% per annum and 0.1% per annum during the grace period. Source: Asian Development Bank. Total a

16 E. Detailed Cost Estimates by Year A. Base Cost 1. Civil Works ($ millions) 2012 2013 2014 2015 2016 Total CW Package A: Improve NR 13 (62.4 km) 0.00 4.04 7.07 6.06 3.03 20.20 CW Package B: Improve 314D (25.6 km) and CBF at Prey Var, Svay 0.00 2.49 4.36 3.74 1.87 12.46 Rieng CW Package C: Improve 150B east (5.8 km), 150B west (25.5 km), 0.00 3.05 5.34 4.58 2.29 15.26 150B Alangkae local road (3.1 km), NR 53 (31.8 km), 151B (3.6 km); UXO Clearance for 5 roads and CBF at Prey Var, Svay Rieng 0.00 0.03 0.06 0.05 0.02 0.16 Land Acquisition 0.92 0.92 0.00 0.00 0.00 1.84 DDIS Consulting Services - Consulting Services: 5 roads and CBF - Preparation for a Future Project 1.33 0.15 1.33 0.15 1.34 0.15 1.33 0.15 1.34 0.15 6.67 0.75 2. Improved Road Asset Management through Axle Load Control 0.14 0.65 0.65 0.06 0.06 1.44 3. Increased Road Safety and Safeguards 0.06 0.08 0.06 0.06 0.06 0.32 4. Improved Climate Resilience 0.59 1.45 1.45 1.16 1.16 5.81 5. Efficient Project Management: - Project Management; Priority Operating Costs 0.46 0.46 0.46 0.46 0.46 2.30 Subtotal (A) 3.65 14.65 20.94 17.59 10.38 67.21 B. Contingency 1. Physical Contingency 2. Price Contingency 0.35 0.13 1.32 0.60 1.85 1.19 1.55 1.43 0.92 1.13 5.99 4.48 Subtotal (B) 0.48 1.92 3.04 2.98 2.05 10.47 C. Interest During Construction* 0.01 0.07 0.21 0.36 0.47 1.12 Subtotal (C) 0.01 0.07 0.21 0.36 0.47 1.12 Total (A+B+C) 4.14 16.64 24.19 20.93 12.90 78.80 CBF = cross-border facility, CW = civil works, DDIS = detailed design and implementation supervision, km = kilometer, NR = national road, UXO = unexploded ordnance. * Includes interest charges and service charges. Interest for ADB loan and service charge for Strategic Climate Fund loan during construction have been respectively computed at 1.0% per annum and 0.1% per annum during the grace period.

Cumulative Disbursements ($ million) Cumulative Contract Awards ($ millions) 17 F. Contract and Disbursement S-curve a. Contract Awards Projection 70 60 6.0 50 40 30 60.0 20 10 0 2011 2012 2013 2014 2015 2016 2017 Fact Finding Actual Annual Year 2011 2012 2013 2014 2015 2016 2017 Fact Finding 0 60 6 0 0 0 0 Actual b. Loan Disbursement Projections 80 70 1.0 60 50 40 30 15.0 15.0 15.0 20 10 0 6.0 15.0 2011 2012 2013 2014 2015 2016 2017 Fact Finding Actual Annual Year 2011 2012 2013 2014 2015 2016 2017 Fact Finding 0 6 15 15 15 15 1 Actual

18 G. Fund Flow Diagram ADB Project Management and Administration Expenses Direct Payments MEF MPWT/PMU3 Imprest Account (only for ADB loan) Consultants, Civil Works Contractors, and Equipment Flow of funds Withdrawal Applications Documents and Liquidation/Statement of Expenditures invoices ADB = Asian Development Bank, MEF = Ministry of Economy and Finance, MPWT = Ministry of Public Works and Transport, PMU = project management unit.

19 A. Financial Management Assessment V. FINANCIAL MANAGEMENT 16. The Financial Management Assessment reveals that the MPWT and PMU3 have no serious obstacles to financial management for the project implementation. The MPWT and PMU3 have implemented road projects financed by ADB, and the PMU3 is staffed with experienced accountants. Since the accounting staff in the PMU3 is experienced in financial management practices for projects funded by ADB and the PMU3 has sound financial accounting, reporting and internal control system, the financial management capacity is in considered adequate. 17. The PMU3 will maintain separate project records and accounts that are adequate to identify goods and services financed from the ADB loan proceeds, PPCR loan and grant proceeds. An external independent auditor acceptable to ADB will be engaged to annually audit all accounts and financial statements related to the project in accordance with International Standards on Auditing and Government's audit regulations. The auditor s report including the auditor s opinion on the use of loan and grant proceeds, compliance with loan covenants, the use of the imprest account and the statement of expenditures (SOE) procedures will be submitted in the English language by PMU3 to ADB within 6 months of the end of the fiscal year. B. Disbursement Arrangements 18. The ADB loan, Strategic Climate Fund (SCF [PPCR]) loan, and SCF grant proceeds will be disbursed in accordance with ADB s Loan Disbursement Handbook (2007, as amended from time to time), 2 and detailed arrangements agreed upon between the Government and ADB. 19. Pursuant to ADB's Safeguard Policy Statement (SPS, 2009) 3, ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth in Appendix 5 of the SPS. 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 to subprojects financed by ADB. 20. Disbursements from the ADB loan for contracts for equipment, consulting services and civil works bid under international competitive bidding procedures will be through direct payment procedures defined in ADB s Loan Disbursement Handbook. Disbursements for incremental administrative expenditures will be through an imprest account. 4 PMU3, in consultation with Ministry of Economy and Finance (MEF), will open and maintain one imprest account 5 for ADB loan under the PMU3 in National Bank of Cambodia. All withdrawal applications shall be prepared and submitted by PMU3 to ADB through MEF. All imprest accounts will be established, managed, replenished, and liquidated in accordance with ADB s Loan Disbursement Handbook. PMU3 has previous experience in administering ADB-funded project accounts and they will administer the imprest account which will be in $. 21. The maximum ceiling of the imprest account will not at any time exceed the estimated 2 Available at: http://www.adb.org/documents/handbooks/loan_disbursement/loan-disbursement-final.pdf 3 Available at: http://www.adb.org/documents/policies/safeguards/safeguard-policy-statement-june2009.pdf 4 Available at: http://www.adb.org/documents/handbooks/loan_disbursement/chap-06.pdf 5 Bank charges related to the imprest accounts will be financed from the loan amount.

20 ADB-financed expenditures to be paid from the imprest account for the next 6 months or 10% of the respective loan amount, whichever will be lower. The request for initial advance to the imprest account should be accompanied by an Estimate of Expenditure Sheet 6 setting out the estimated expenditures for the first six months of project implementation, and submission of evidence satisfactory to ADB that the imprest account has been duly opened. For every liquidation and replenishment request of the imprest account, the borrower will furnish to ADB (i) Statement of Account (Bank Statement) where the imprest account is maintained, and (ii) the Imprest Account Reconciliation Statement, reconciling the above mentioned bank statement against the executing agency's records. 7 The accounting records and system will be managed and maintained in accordance with ADB s Financial Management Manual for Cambodia. 22. The SOE will be used to reimburse eligible expenditures and liquidate advances to the imprest account to ensure speedy project implementation. The ceiling for SOE will be $50,000 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 23. 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 borrower is to consolidate claims to meet this limit for reimbursement and imprest account claims. Withdrawal applications and supporting documents will demonstrate, among other things that the goods, and/or services were produced in or from ADB members, and are eligible for ADB financing. C. Accounting 24. The PMU3 will maintain separate project accounts and records by funding source for all expenditures incurred on the Project. Project accounts will follow international accounting principles and practices. D. Auditing 25. The PMU3 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 the English language by the executing agency to ADB within 6 months of the end of the fiscal year. The annual audit report will include a separate audit opinion on the use of the imprest account, and the SOE procedures. The Government and MPWT 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. 6 Available in Appendix 29 of the Loan Disbursement Handbook. 7 Follow the format provided in Appendix 30 of the Loan Disbursement Handbook. 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 VI. PROCUREMENT AND CONSULTING SERVICES A. Advance Contracting and Retroactive Financing 26. Advance action for consultant selection will be undertaken in conformity with ADB s Guidelines on the Use of Consultants (2010, as amended from time to time). 9 Each milestone action of such advance action will be subject to ADB approval. The Borrower and MPWT have been advised that approval of advance action does not commit ADB to finance the project. Advance action will be undertaken for DDIS consulting services. Under advance action before loan effectiveness few steps of consulting recruitment will be conducted. These include, shortlisting, evaluation of technical and financial proposals, to be ready for contract negotiations. B. Procurement of Goods, Works and Consulting Services 27. Procurement of all goods and civil works will be in accordance with ADB s Procurement Guidelines (2010, as amended from time to time). In addition, all procurement under the Project will use and follow the Government s Standard Operating Procedures (SOP) for Externally Financed Projects 2007, amended from time to time. Should there be any discrepancy between the SOP and the ADB s Guidelines, then ADB s Guidelines shall prevail. 28. ICB will be adopted for all civil works contracts. NCB for goods will be adopted for contracts estimated between $100,000 and $500,000. Shopping will be used for contracts of $100,000 and less. The following table shows the major civil works contract packages. Civil Works Contract Packages Contract Package and Provinces No. of Roads Total Length (km) Approximate Value ($ millions) Completion (months) CW-A: Improve NR 13 (Prey Veng) 1 62.4 23.39 36 CW-B: Improve 314D and CBF at Prey 1 25.6 14.32 39 Var, Svay Rieng (Svey Rieng) CW-C: Improve 150B, NR 53 3 69.6 17.78 36 151B (Kampong Chhnang and Kampong Speu) CW-D: Civil works for Climate resilience (Kampong Chhnang) 3.70 33 = not applicable, ADB = Asian Development Bank, CBF = cross-border facility, CW = civil works, km = kilometer, NR = national road. 29. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and NCB guidelines is in Section C. 30. All consultants will be recruited according to ADB s Guidelines on the Use of Consultants. 10 The terms of reference (TOR) for all consulting services are detailed in Section D. 31. The executing agency will recruit a consulting firm as the DDIS consultant, which will assume the role of the Engineer for the civil works contracts. The PMU3 representing the executing agency will select the consultants using quality- and cost-based (80:20) selection procedure. The estimated personnel and person-month requirements for each consulting 9 Available at: http://www.adb.org/documents/guidelines/consulting/guidelines-consultants.pdf 10 Checklists for actions required to contract consultants by method available in e-handbook on Project Implementation at: http://www.adb.org/documents/handbooks/project-implementation/

22 services package are provided in the table below. Upon completion of the project, all equipment procured under the consulting services contracts shall be appropriately handed over to MPWT according to the provisions for transfer under the contracts. Consulting Services Packages List of Personnel Person-Months CS 1: DDIS Consultants International Team Leader (highway engineer) 59 Road design engineer 7 Materials engineer 19 Structural engineer 7 Resident engineer 108 Environmental specialist 14 Procurement specialist 6 Social safeguards specialist 6 Transport economist 6 Resettlement specialist 9 Road safety specialist 12 National Road design engineer (deputy team leader) 8 Materials engineer 43 Structural engineer 43 Surveyor 43 Hydrologist 7 Assistant resident engineer 108 Environment specialist 14 Procurement 7 Labor and gender specialist 15 De-mining/UXO specialist 7 Resident inspectors/survey 432 Road engineer 8 Resettlement specialist 24 Road safety specialist 24 CS1: Total 1,036 CS2: Road asset management consultant International Team leader/senior axle load specialist 8 Electronic/Software specialist 4 National Axle load specialist (2) 62 Electronic/Software specialist Axle load data analyst 6 8 CS2: Total 88 CS3: HIV/AIDS and human trafficking prevention National HIV specialist (Team leader) 15 Human trafficking prevention specialist 15 Program officers (2 persons) 20 Monitoring and evaluation specialist 8 CS3: Total 54 CS4: Climate Resilience Consultant International Team Leader/Adaptation specialist 12 Hydrologist/Impacts modeler 6 GIS specialist 2 Disaster Management and Early Warning 6 Specialist Road Design Engineer 5 Ecosystems Specialist 4 Hydraulics engineer 4

23 List of Personnel Person-Months Climate Modeler/scientist 4 National Adaptation Specialist/Institutional Strengthening 33 Expert and Knowledge Management Hydrologist 12 GIS Specialist 4 Early Warning and Disaster Risk Management 12 Specialist Road Design Engineer 1 Land Use and Natural Resource Management 6 Specialist Hydraulic engineer 4 Social Specialist 1 Translator 3 Data Collection Assistant 8 CS4: Total 127 CS = consulting services, DDIS = detailed design and implementation supervision, GIS = geographic information system, UXO = unexploded ordnance. C. Procurement Plan Basic Data Project Name: Provincial Roads Improvement Project Country: Cambodia Executing Agency: Ministry of Public Works and Transport Loan Amount: $79.08 million Loan (Grant) Number: Date of First Procurement Plan Date of this Procurement Plan: 8 November 2011 1. Process Thresholds, Review and 18-Month Procurement Plan a. Project Procurement Thresholds 32. Except as the ADB may otherwise agree, the following process thresholds shall apply to procurement of goods and works. Procurement of Goods and Works Method Threshold International Competitive Bidding for Works $1,000,000 and above International Competitive Bidding for Goods $500,000 and above National Competitive Bidding for Works Below $1,000,000 National Competitive Bidding for Goods Below $500,000 Shopping for Works $100,000 and below Shopping for Goods $100,000 and below b. ADB Prior or Post Review 33. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project. Procurement Method Prior or Post Comments Procurement of Goods and Works International Competitive Bidding for Works Prior All bidding documents, BERs, and contracts International Competitive Bidding for Goods Prior All bidding documents, BERs, and

24 Procurement Method Prior or Post Comments contracts National Competitive Bidding for Works Post National Competitive Bidding for goods Post First set of bidding documents in the English language shall be prior reviewed First set of bidding documents in the English language shall be prior reviewed Shopping for Works Post First set of bidding documents in the English language shall be prior reviewed Shopping for Goods Post First set of bidding documents in the English language shall be prior reviewed Recruitment of Consulting Firms Quality- and Cost-Based Selection Quality-Based Selection BER = bid evaluation report. Prior Prior c. Goods and Works Contracts Estimated to Cost More Than $1 Million 34. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Contract Value ($) Procurement Method Prequalification of Bidders (y/n) Advertisement Date Comments CW-A Improve NR13 23.39 million ICB No Q4 2012 ADB/PPCR financing (62.4km) CW-B Improve 314D + 14.32 million ICB No Q4 2012 ADB/PPCR financing CBF (25.6 km) CW-C Improve 150B, 17.78 million ICB No Q4 2012 ADB/PPCR financing NR53, 151B (69.6 km) CW-D Climate Resilience 3.70 million ICB No Q2 2013 PPCR financing only ADB = Asian Development Bank, CBF = cross-border facility, CW = civil works, ICB = international competitive bidding; km = kilometer, NR = national road, PPCR = Pilot Program for Climate Resilience, Q = quarter. Source: Asian Development Bank d. Consulting Services Contracts Estimated to Cost More Than $100,000 35. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description CS1 Detail Design and Contract Value ($) Recruitment Method Advertisement Date (quarter/year) International or National Assignment 8.45 million QCBS Q4 2011 International and national Comments ADB/PPCR financing

25 General Description Contract Value ($) Recruitment Method Advertisement Date (quarter/year) International or National Assignment Comments Implementation Supervision consultant FTP (80:20) CS2 0.85 million QCBS Q2 2012 International and ADB Road Asset national FTP (80:20) Management consultant CS3 HIV Awareness and Prevention Program 0.35 million QCBS Q2 2012 National consultant ADB financing BTP (80:20) CS4 3.04 million QCBS Q2 2012 International and PPCR Climate Change Adaptation Program national consultant financing FTP (80:20) ADB = Asian Development Bank, CS = consulting services, FTP= full technical proposal, PPCR = Pilot Program for Climate Resilience, Q = quarter, QCBS = quality- and cost-based selection, STP= simplified technical proposal. Source: Asian Development Bank e. Goods and Works Contracts Estimated to Cost More Than $100,000 36. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Contract Value ($) Number of contracts Procurement Method Comments EQ1:Axle load control equipment: 2 permanent weigh stations 0.78 million 1 ICB ADB financing ADB = Asian Development Bank, EQ = equipment, ICB = international competitive bidding. Source: Asian Development Bank 2. Indicative List of Packages Required Under the Project 37. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. Estimated Value (cumulative) ($) Estimated Number of Contracts Domestic Preference Applicable (y/n) Comments Procurement Method 0.78 million 1 ICB Yes ADB financing General Description EQ1:Axle load control equipment: 2 permanent weigh stations CW-A 23.39 million 1 ICB Yes ADB/PPCR Improve NR13 (62.4 km) financing CW-B 14.32 million 1 ICB Yes ADB/PPCR Improve 314D + CBF financing (25.6 km) CW-C 17.78 million 1 ICB Yes ADB/PPCR Improve 150B, NR53, financing 151B (69.6 km) CW-D 3.70 million 1 ICB Yes PPCR Climate Resilience financing ADB = Asian Development Bank, CBF = cross-border facility, CW = civil works, EQ = equipment, ICB = international competitive bidding, km = kilometer, NR = national road, PPCR = Pilot Program for Climate Resilience. Source: Asian Development Bank.