Project Administration Manual. Viet Nam: Central Mekong Delta Region Connectivity Project

Transcription

1 Project Administration Manual Project Number: Loan and/or Grant Number(s): {LXXXX; GXXXX; TAXXXX} 11 June 2013 (NEGOTIATED) Viet Nam: Central Mekong Delta Region Connectivity Project

2 CONTENTS ABBREVIATIONS Page I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 3 A. Project Readiness Activities 3 B. Overall Project Implementation Plan 5 III. PROJECT MANAGEMENT ARRANGEMENTS 6 A. Project Implementation Organizations Roles and Responsibilities 6 B. Key Persons Involved in Implementation 7 C. Project Organization Structure 8 IV. COSTS AND FINANCING 9 A. Allocation and Withdrawal of Loan and Grant Proceeds 10 B. Detailed Cost Estimates by Financier 12 C. Detailed Cost Estimates by Year 13 D. Contract Award and Disbursement S-curve 14 E. Fund Flow Diagram 15 V. FINANCIAL MANAGEMENT 16 A. Financial Management Assessment 16 B. Disbursement 16 C. Accounting 17 D. Auditing 17 VI. PROCUREMENT AND CONSULTING SERVICES 18 A. Procurement of Goods, Works and Consulting Services 18 B. Procurement Plan 18 C. Consultant's Terms of Reference 26 VII. SAFEGUARDS 30 VIII. GENDER AND SOCIAL DIMENSIONS 33 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 34 A. Project Design and Monitoring Framework 34 B. Monitoring 36 C. Evaluation 37 D. Risks and Mitigating Measures 37 X. ANTICORRUPTION POLICY 40 XI. ACCOUNTABILITY MECHANISM 41 XII. RECORD OF PAM CHANGES 42 iii

3 ii Project Administration Manual Purpose and Process The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. The MOT and Cuu Long CIPM are wholly responsible for the implementation of this ADB financed project, as agreed jointly between the borrower and ADB, and in accordance with Government and ADB s policies and procedures. ADB staff are responsible to support implementation including compliance by MOT and Cuu Long CIPM with their obligations and responsibilities for project implementation in accordance with ADB s policies and procedures. At Loan Negotiations the borrower and ADB agreed to the PAM and ensure consistency with the Loan and Grant Agreements. Such agreements shall be reflected in the minutes of the Loan Negotiations. In the event of any discrepancy or contradiction between the PAM and the Loan and Grant Agreements, the provisions of the Loan and Grant Agreements shall prevail. After ADB Board approval of the Project, 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.

4 iii ABBREVIATIONS ADB = Asian Development Bank AFS = audited financial statements CFLD = Center for Land Fund Develpment CQS = consultant qualification selection DMF = design and monitoring framework EARF = environmental assessment and review framework EIA = environmental impact assessment EMP = environmental management plan GACAP = governance and anticorruption action plan GDP = gross domestic product ICB = international competitive bidding IEE = initial environmental examination LIBOR = London interbank offered rate NCB = national competitive bidding NGOs = nongovernment organizations PAI = project administration instructions PAM = project administration manual PIU = project implementation unit QBS = quality based selection QCBS RP = = quality- and cost based selection Resettlement Plan RRP = report and recommendation of the President to the Board SBD = standard bidding documents SOE = statement of expenditure SPS = Safeguard Policy Statement SPRSS = summary poverty reduction and social strategy TOR = terms of reference

5 I. PROJECT DESCRIPTION Rationale 1. Viet Nam has a rapidly growing export-led economy; it is the world s second largest rice exporter. The economy of the Mekong Delta, a key economic region, relies mainly on agroindustry and other light industries. The Mekong Delta produces more than 60% of Viet Nam s agricultural and fishery outputs, and is the country s third largest producer of light industrial goods. Consequently, rapidly growing motorization with an inefficient transport network will soon lead to severe congestion of the sole arterial link National Highway 1A a four-lane single carriageway road that cannot be widened due to dense inhabitation. Severe congestion could negatively affect domestic food distribution as well as Viet Nam s exports, and would certainly increase the cost of food and exports. To sustain economic development of this region, the government plans to construct a parallel arterial link from Ho Chi Minh City to the Mekong Delta and southern coastal provinces. 2. The government s expressway development plan identifies the SSH as a key artery for development of the Mekong Delta. 1 The SSH connects Ho Chi Minh City through the Mekong Delta to the southern coastal region and serves as an alternative to National Highway 1A. It also provides access to the region s western provinces, and connects to the Greater Mekong Subregion Southern Coastal Corridor in An Giang province, which connects to highway networks in Cambodia and Thailand. The project will help diversify and develop the region s economy into the western provinces. The western provinces are predominantly rural and relatively poor. This is primarily due to poor connectivity, which has resulted in the region s industries locating and concentrating in the southeastern provinces along National Highway 1A. 3. The two-lane SSH is currently constrained by ferry crossings at Cao Lanh and Vam Cong, which are slow and cause traffic delays. The government plans to remove the bottlenecks caused by these ferries and, more generally, improve connectivity in the Mekong Delta by constructing a section of the SSH between Cao Lanh (on the northern bank of the Tien branch of the Mekong River) and Long Xuyen (on the southern bank of the Hau branch). 4. ADB is assisting the government to realize its transport investment program, increase transport efficiency, and reduce transport costs. ADB s strategy for Viet Nam focuses on (i) alignment with the priorities of the government s Socio-Economic Development Plan, as they intersect with ADB s Strategy 2020, (ii) investments that offer value-addition and innovative solutions, (iii) support for the government's commitment to economic restructuring and related reforms, and (iv) strategic partnerships with development partners to implement commitments under the Paris Declaration. 2 The government identifies the project as a high priority and included it in its 5-year plan. The governments of Australia and the Republic of Korea, in support of their bilateral partnerships, have committed to provide financial support; for both development partners, this is the largest amount provided for a single project in Viet Nam. 5. The project is expected to bring inclusive development to areas that are poorly connected to major population centers, improve access to basic social and health services, increase national food security by stimulating the local agro-industry and boosting exports, 1 Government of Viet Nam Decision 1734/QD-TTg, Approval of Viet Nam s Expressways Development Plan up to 2020 and Beyond. 2 ADB Country Partnership Strategy: Viet Nam, Manila.

6 2 facilitate private sector investment, and extend regional connectivity to neighboring Cambodia and the Greater Mekong Subregion, as well as to Viet Nam s major inland ports in the Mekong Delta. An estimated 170,000 road users will benefit daily from the project; the 5 million residents of An Giang, Can Tho, and Dong Thap provinces will benefit from improved living standards. Impact and Outcome 6. The expected impact is improved and sustainable transport connectivity contributing to inclusive development in the Central Mekong Delta Region. The expected outcome is improved road transport access and travel time across and within the Central Mekong Delta Region. Outputs 7. The project will build a section of the SSH, including two cable-stayed bridges with a combined length of about 5 kilometers (km) and associated access and interconnecting roads with a total length of about 26 km, and provide systems for bridge health monitoring, traffic management, and emergency response. The project comprises component 1, Cao Lanh bridge (2.0 km) and approach roads (5.8 km); component 2, interconnecting road (15.7 km); and component 3, Vam Cong bridge (3.0 km) and approach roads (4.5 km) to be financed by the Export Import Bank of Korea (KEXIM). 3 This output will be achieved through construction, associated project management, and safeguard implementation and monitoring activities. 4 3 The project preparatory technical assistance (footnote 1) identified additional components along the SSH, which the government intends to construct in the future. 4 The technical assistance described in para. 18 will prepare operation and maintenance plans and manuals, and provide institutional capacity building to train MOT staff to operate and maintain the project systems and facilities.

7 3 II. IMPLEMENTATION PLANS 8. The project implementation will be completed by 31 December 2017, followed by 2 years of defects liability period ending on 31 December 2019 and the loan closing date on 30 June Advance contracting for detailed design and construction services have been achieved with the use of the TA described in para 6. Procurement of civil works have commenced in Q Civil works is expected to commence by Q The following show the project readiness activities showing the main activities as well as the project readiness filters for Viet Nam. The implementation plan is in Section B. Indicative A. Project Readiness Activities Activities Advance contracting x actions Retroactive financing actions Establish project implementatio X n arrangements ADB Board approval X Who responsible Cuu Long CIPM Cuu Long CIPM MOT/ Cuu Long CIPM ADB Loan signing X ADB, SBV Government legal opinion provided Government budget inclusion Loan effectiveness X X MOJ,SBV MOF ADB

8 4 No Key Project Preparation Elements Identification/ Conceptualization Stage of Project Preparation Factfinding Negotiations Within 1 month of Effectiveness Remarks 1 Project priority Inclusion in ODA Requesting List 2 Approval of PDO Approved by Prime (PPTA) Minister LA and PO identified 3 Concept Paper clearance 4 Approval of PDO (Loan) Appraised and approved by LA Approved by Prime Minister LA prepares PDO based on reconnaissance mission MOU 5 Approval of FS Appraised and approved by LA 6 Project PAM drafted Confirmed Administration Manual 7 Counterpart Funds Defined Agreed First-year funds confirmed 8 PMU Establishment Proposed staffing and structure discussed 9 Project Implementation Plan Staffing levels and TORs agreed Drafted PMU established with key staff Completed and agreed Full project implementation team in place GOV regulation requires PMU established within 10 working days of FS approval 10 EIA, Resettlement Plan Requirements defined Agreed Confirmed 11 Procurement Plan Draft prepared Agreed Confirmed 12 Auditing Arrangements and TOR 13 Preparation for Consultant Recruitment Discussed TOR agreed Confirmed

9 B. Overall Project Implementation Plan 5

10 6 III. PROJECT MANAGEMENT ARRANGEMENTS A. Project Implementation Organizations Roles and Responsibilities Project implementation Management Roles and Responsibilities organizations Ministry of Transport Executing Agency o Provide policy guidance to Implementing Agency Project Coordination Committee Coordination of all project activities across the several components that make up the project. Members include MOT, cofinanciers, provincial peoples committees for the project provinces, other central government agencies as required. Cuu Long CIPM Implementing Agency Day-to-day management of the project Coordinate all resettlement-related activities Disburses payments for resettlement-related expenses through imprest account Provincial Peoples Committees / Center for Land Fund Development (CLFD) Detailed Design and Implementation Support Consultants (DDIS Consultant) Implementing Agency for Resettlement Plan Implement all resettlement-related activities Disburses payments for resettlement-related expenses through imprest sub-account Implementation Consultant Prepare detailed design and assist with procurement Supervise and manage construction activities Prepare safeguards plan, assist in implementation and monitoring Assist in implementation of social action plan ADB Provides project financing Project preparation Implementation monitoring Administration of AusAID funds AusAID Provides project financing Co-monitoring during implementation

11 7 B. Key Persons Involved in Implementation Executing Agency Ministry of Transport (MOT) Officer's Name : Nguyen Ngoc Dong Position : Vice Minister of Transport of Vietnam Telephone : : Implementing Agency Cuu Long Corporation for Officer's Name : Duong Tuan Minh Investment, Development and Position : General Director Project Management of Telephone : (848) Infrastructure (Cuu Long CIPM) address : dtminhgtvt@gmail.com Office Address : 127B Dinh Tien Hoang St. Ward 3 Binh Thanh District, HCMC, Viet Nam Provincial Peoples Committees Officer's Name : Position : Can Tho City Telephone : address : Officer's Name : ADB Southeast Asia Transport and Communication Division (SETC) Position Telephone : address : Dong Thap Province Staff Name : James Lynch Position : Director Telephone No. : (632) address : jlynch@adb.org Mission Leader Staff Name : Rustam Ishenaliev Position : Transport Specialist Telephone No. : (632) address : rishenaliev@adb.org Project Analyst Staff Name : Nilo Farrofo Position : Senior Project Officer Telephone No. : (632) address : nfarrofo@adb.org

12 8 C. Project Organization Structure THE FINANCIERS MOT (EA) Cuu Long CIPM (IA) Project Management Divisions 1. Can Tho Vam Cong 2. Cao Lanh 3. PMD 1 4. PMD 5 5. PMD 6 Functional Divisions 1 Administration 2 Finance and Accounting 3 Investment and Procurement Management 4 Construction Quality Control Department Units Directly under Cuu Long CIPM 1 Cuu Long IMC 2 Road Management No Can Tho Bridge Management 4 Cuu Long CTS Representative Branch Offices 1 Ha Noi city 2 Can Tho city Contractors Supervision Consultants Detailed Design Consultants Project Preparation Consultants (FS & Basic Design)

13 9 IV. COSTS AND FINANCING 9. The project is estimated to cost $860 million (Table 1). Table 1: Project Investment Plan ($ million) Item Amount A. Base Cost a 1. Civil works Project management b Consultants c Land acquisition and resettlement support Unexploded ordinance survey and clearance Taxes and duties d 58.3 Subtotal (A) B. Contingencies e C. Financing Charges During Implementation e 17.0 Total (A+B+C) a In end-2012 prices for ADB and AusAID financed project components. Includes incremental cost of climate change adaptation estimated at $4.5 million. b Includes project management cost and cost of external financial audit. c This amount excludes $26 million financed by AusAID separately under associated TA 7822, but includes the cost of detailed design and construction supervision for the KEXIM-financed Component 3. d To be financed by ADB and the Government. e Physical contingencies computed at 10% for base cost excluding land acquisition and resettlement. Price contingencies computed at an average of 1.5% on foreign exchange costs and average of 8.5% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. f Includes interest and commitment charges. Interest during construction for the ADB loan has been computed at the 5-year forward swap rate plus an effective spread of 0.4% and the maturity premium of 0.2%. Commitment charges for the ADB loan are 0.15% per year to be charged on the undisbursed loan amount. Sources: Asian Development Bank and executing agency estimates. 10. The government has requested a loan of $410 million from ADB s ordinary capital resources to help finance the project. 5 The loan will have a 31-year term, including a grace period of 6 years (straight-line repayment method), an annual interest rate determined in accordance with ADB s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.15% per year on the undisbursed loan amount (the interest and other charges during construction to be capitalized in the loan), and such other terms and conditions set forth in the draft loan agreement. The average loan maturity is years, and the maturity premium payable to ADB is 0.20% per annum. 11. The government has asked ADB to finance part of the land acquisition cost and resettlement expenses through retroactive financing, as well as part of the taxes. The eligibility of these items for ADB financing was determined through a due diligence assessment, which focused on (i) the expected productive nature of land to be acquired, (ii) suitability of land market conditions, (iii) adequacy of administrative arrangements to ensure transparent and efficient transfer of funds, (iv) risk profile of the transaction, (v) soundness of the monitoring and evaluation arrangements, and (vi) the country partnership strategy recommendation for 5 Including transportation, insurance, and bank charges.

14 10 financing taxes that apply to ADB-financed expenditures. Based on the results of the assessments, ADB concluded that all requirements had been met The financing plan is in Table 2. The Government of Australia, through the Australian Agency for International Development (AusAID), will provide grant cofinancing of A$128 million. ADB will administer the grant, equivalent to $134 million at the exchange rate prevailing at the time of fact-finding; it will be denominated in US dollars pursuant to ADB s standard accounting practices. 7 AusAID will jointly cofinance the cost of civil works with ADB based on different ratios for each cost category and/or subcategory. The Government of the Republic of Korea, through KEXIM, will provide a tied-parallel loan of $260 million equivalent for component 3. The Government of Viet Nam will finance all costs for project management; unexploded ordnance clearance; and land acquisition, resettlement, taxes, and duties for the KEXIM-financed component 3. These are estimated at $56 million. Table 2: Financing Plan Source Amount ($ million) Share of Total (%) Asian Development Bank Ordinary capital resources (loan) Government of Australia a Government of the Republic of Korea Government of Viet Nam Total a Government of Australia contribution calculated at the exchange rate prevailing at the time of fact-finding. Source: Asian Development Bank estimates. A. Allocation and Withdrawal of Loan and Grant Proceeds 13. Tables 3 and 4 set forth the Categories of works and other items to be financed out of the proceeds of the Loan and Grant and the allocation of amounts to each such Category. Table 3: Allocation and Withdrawal of ADB Loan Proceeds (million USD) Percentage of Total Financing Number Category Amount 1.1 Works Cao Lanh Bridge % of total expenditure claimed 1.2 Works Interconnecting Road % of total expenditure claimed 2 Land acquisition and Resettlement % of total expenditure claimed 3 Interest and commitment charges % of amount due 4 Unallocated Total Due Diligence for Land Acquisition and Resettlement Financing (accessible from the list of linked documents in Appendix 2). 7 This amount may be adjusted for currency fluctuations to match the grant amount received by ADB.

15 11 Table 4: Allocation and Withdrawal of Government of Australia Grant Proceeds (million USD) Percentage of Total Financing Number Category Amount 1 Works % of total expenditure claimed 2 Unallocated* Total * This amount includes the ADB administration fee, audit costs, bank charges, and a provision for foreign currency fluctuations (if any) to the extent that these items are not covered by the investment income earned on this grant, or any additional grant contribution by the Government of Australia.

16 B. Detailed Cost Estimates by Financier 12

17 C. Detailed Cost Estimates by Year 13

18 Disbursements ($ M) Amount ($M) 14 D. Contract Award and Disbursement S-curve a. Contract Awards Projection Year Annual Award Cumm Award Year b. Loan Disbursement Projections Year Annual Dibursement Cumm Disbursement Year

19 15 E. Fund Flow Diagram Direct Payment of ICB Civil Works (ADB Loan and AusAID Grant) ADB (ADB Loan) (AusAID Grant) Withdrawal applications/ replenishment/ liquidation request Replenishment of Imprest CUU LONG CIPM ADB Loan Imprest Fund AP, IPC Replenishment Replenishment/ liquidation request Payment Request for Funds Civil Works Contractors Sub-account for Components 1 and 2 Dong Thap CLFD Government Fund for Component 3 Dong Thap CLFD Land Acquisition and Resettlement Costs including Administrative Costs Land Acquisition and Resettlement Costs including Administrative Costs Loan Agreement Grant Agreement Government Ministry of Finance Request for Funds Counterpart Funds Government Counterpart Fund Payment Request for Funds Payment AP, IPC Payment AP, IPC Government Fund for Component 3 Can Tho CLFD UXO Clearance Contractor External Financial Auditor Land Acquisition and Resettlement Costs including Administrative Costs Cash flow Agreement Payment/ replenishment/ liquidation request flow ADB = Asian Development Bank, AP = advance payment, CLFD = Center for Land Fund Development; ICB = international competitive bidding, IPC = Interim Payment Certificate, UXO = unexploded ordnance.

20 16 V. FINANCIAL MANAGEMENT A. Financial Management Assessment 14. The Financial Management Assessment reveals that the MOT and Cuu Long CIPM have no serious obstacles to financial management for the project s implementation. The MOT and Cuu Long CIPM have implemented road projects financed by ADB, and Cuu Long CIPM is staffed with experienced accountants. Since the accounting staffs in Cuu Long CIPM are experienced in financial management practices for projects funded by ADB and Cuu Long CIPM has sound financial accounting, reporting and internal control systems, the financial management capacity is considered adequate. B. Disbursement 15. The Loan and Grant proceeds will be disbursed in accordance with ADB s Loan Disbursement Handbook. 8 (2012, as amended from time to time), 9 and detailed arrangements agreed upon between the Government and ADB. 16. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS), 10 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at 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 (Appendix 5) to subprojects financed by ADB. 17. An imprest account will be established for the loan at a commercial bank to be proposed by SBV. The ceiling of the imprest account will be 10% of the ADB loan amount and the currency will be USD. Cuu Long CIPM may request for initial and additional advances to the imprest account based on an Estimate of Expenditure Sheet setting out the estimated expenditures to be financed through the account for the forthcoming six(6) months. Supporting documents should be submitted to ADB or retained by the Cuu Long CIPM in accordance with ADB s Loan Disbursement Handbook when liquidating or replenishing the imprest account. The imprest account (and sub-account) is to be used exclusively for ADB s share of eligible expenditures. Cuu Long CIPM who established the imprest account in its name is accountable and responsible for proper use of advances to the imprest account, including advances to the sub-account. Cuu Long CIPM will be responsible for (i) preparing disbursement projections, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) preparing and sending withdrawal applications to ADB. 18. One sub-account for the ADB loan will be established in Dong Thap province Treasury to be used for resettlement expenses for components 1 and 2 of the works. Separate accounts for the counterpart funds will be established in Can Tho and Dong Thap provinces to be used for resettlement expenses on component 3 of the works. Use of the sub-account for the ADB loan will be in accordance with procedures in ADB's Loan Disbursement Handbook. Use of the sub-account will be limited to the Center For Land Fund Development (CLFD) providing funds for payments (i) to affected persons for land and other assets acquired to facilitate construction of the Project; (ii) to affected persons for resettlement compensation and allowances as set out 8 ADB Loan Disbursement Handbook. Manila. 9 Available at: 10 Available at:

21 17 in the approved updated resettlement plan; and (iv) for incremental expenses incurred by the provincial, and district compensation committees necessary for implementing the approved updated resettlement plan. Liquidation of any amount paid from the sub-account for land or other assets will require (a) a validation certificate issued by a qualified appraiser engaged by the CLFD to carry out replacement cost surveys; (b) the results of the detailed measurement survey (DMS) and compensation plan signed by the AP, and that receipt of compensation payment is acknowledged by the AP, and (c) certification by the external resettlement monitor that the AP has received the full payment. CLFD will administer the sub-account and be responsible for ensuring they are operated in accordance with ADB s requirements, authorize all withdrawals from the sub-account, and ensure that the sub-account is audited as part of the regular annual audits of project accounts. 19. The statement of expenditure (SOE) procedure 11 will be used to reimburse/liquidate eligible expenditures not exceeding $100,000 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. Reimbursement and liquidation of individual payments in excess of the SOE ceiling should be supported by full documentation when submitting the withdrawal application to ADB. 20. Before the submission of the first withdrawal application, SBV 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 US$100,000, unless otherwise approved by ADB. Cuu Long CIPM 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 21. The MOT, Cuu Long CIPM and CFLD will maintain separate books and records by funding source for all expenditures incurred on the Project. Project financial statements will be prepared in accordance with Government's accounting laws and regulations. D. Auditing 22. The Cuu Long CIPM will cause the detailed consolidated project financial statements to be audited in accordance with International Standards on Auditing and in accordance with the Government's audit regulations by an auditor acceptable to ADB. Cuu Long CIPM will submit the audited financial statements and its associated management letter in the English language to ADB within 6 months of the end of the fiscal year to which they apply. The annual audit report will include a separate audit opinion on the use of the imprest fund, and the SOE procedures as applicable. The Government, MOT and Cuu Long CIPM 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. 11 SOE form is available in Appendix 9B of the Loan Disbursement Handbook

22 18 VI. PROCUREMENT AND CONSULTING SERVICES A. Procurement of Goods, Works and Consulting Services 23. All procurement of goods and works financed by ADB and AusAID will be undertaken in accordance with ADB s Procurement Guidelines. Advanced contracting and retroactive financing have been requested to procure civil works contracts. Retroactive financing of up to 20% of loan and grant amounts will finance eligible project expenditures for civil works, land acquisition and resettlement, incurred prior to loan effectiveness but not earlier than 12 months before loan signing. 24. International competitive bidding procedures will be used for civil works contracts estimated to cost $5 million or more, and procurement of goods valued at $500,000 or higher. Shopping will be used for contracts for procurement of works and equipment worth less than $100, In the event National Competitive Bidding is used, ADB and the Government will review the public procurement laws before the start of any procurement to ensure consistency with ADB s Procurement Guidelines. 26. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section B. 27. All consultants will be recruited according to ADB s Guidelines on the Use of Consultants. 12 The outline terms of reference for all consulting services are in Section D. B. Procurement Plan Basic Data Project Name: Central Mekong Delta Connectivity Project Country: Socialist Republic of Viet Nam Executing Agency: Ministry of Transport Loan and Grant Amount: $410 M (ADB), $134 M Loan (Grant) Number: xxxx-vie (AusAID) Date of First Procurement Plan Date of this Procurement Plan28 September 2012 A. Process Thresholds, Review and 18-Month Procurement Plan 1. Project Procurement Thresholds 28. Except as ADB may otherwise agree, the following process thresholds shall apply to procurement of goods and works. Method Procurement of Goods and Works Threshold International Competitive Bidding (ICB) for Works Above $5,000,000 International Competitive Bidding for Goods Above $500,000 National Competitive Bidding (NCB) for Works Below $5,000,000 and above $100,000 National Competitive Bidding for Goods 1 Below $500,000 and above $100,000 Shopping for Works Below $100, Checklists for actions required to contract consultants by method available in e-handbook on Project Implementation at:

23 19 Shopping for Goods Below $100,000 Direct Contracting Below $10, ADB Prior or Post Review 29. 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 ICB Works Prior ICB Goods Prior NCB Works Post Prior review for first document NCB Goods Post Prior review for first document Shopping for Works Prior Shopping for Goods Prior Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Prior Quality-Based Selection (QBS) Prior Other selection methods: Consultants Qualifications (CQS), Least-Cost Selection (LCS), Fixed Budget (FBS), and Single Source (SSS) Prior Recruitment of Individual Consultants Individual Consultants Prior 3. Goods and Works Contracts Estimated to Cost More Than $1 Million 30. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Package CW1A: Northern Approach to Cao Lanh Br. Km 0+00 to Package CW1B: Cao Lanh Br. And 200 m approach Km3+800 to Package CW1C: Southern Approach to Cao Lanh Br. Km to Package CW2 Interconnecting Road between Vam Cong bridge and Cao Lanh bridge Km to Lot CW2A: Km to Km Lot CW2B: Km to Km Lot CW2B: Km to Km Contract Prequalification Advertisement Value ($ million) Procurement Method of Bidders (y/n) Date (quarter/year) 39 ICB N Q4/ Q1/ ICB Y Q3/ Q4/ ICB N Q4/ Q1/ ICB Multiple contract N Q4/ Q1/2013 Comments 1 Stage - 2 Envelope 1 Stage - 2 Envelope 1 Stage - 2 Envelope

24 20 4. Consulting Services Contracts Estimated to Cost More Than $100, The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description None Contract Value ($ million) Recruitment Method Advertisement Date (quarter/year) International or National Assignment Comments 5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100, The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description None Value of Contracts (cumulative) Number of Contracts Procurement / Recruitment Method Comments B. Indicative List of Packages Required Under the Project 33. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section. General Description 1. Package CW1A: Northern Approach to Cao Lanh Br. Km 0+00 to Package CW1B: Cao Lanh Br. And 200 m approach Km3+800 to Package CW1C: Southern Approach to Cao Lanh Br. Km to Package CW2 Interconnecting Road between Vam Cong bridge and Cao Lanh bridge Km to Lot CW2A: Km to Km Lot CW2B: Km to Km Lot CW2B: Km to Km Package CW3B: Northern Approach to vam Cong Br. Km to and Southern Approach Km to (2.1 km and connecting road to NH80 (1.5 km) Contract Value ($ million) Est. Number of Contracts Procurement Method Domestic Preference Applicable Comments 39 1 ICB N Construction Period 36 months ICB N Construction Period 45 months 16 1 ICB N Construction Period 36 months 40 1 N Construction Period 36 months 40 1 N Construction ICB Multiple Period 36 contract months 40 1 N Construction Period 36 months 14 1 CB N Construction Period 36 months, financed by KEXIM

25 21 3. Package CW3A: Vam Cong +200 m approach at both sides Km to Km (2.97 km) CB N Construction Period 36 months, financed by KEXIM C. National Competitive Bidding 1. General 34. The laws to be followed for national competitive bidding shall be those set forth in the Law on Procurement No. 61/2005/QH11 of 29 November 2005 and the Construction Law no. 16/2003/QH11 of 26 November 2003 and with the processes described in Decree No. 85/20009/ND-CP of 15 October 2009 and Decree No. 68/20009/ND-CP of 12 September 2012 with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the Procurement Guidelines. 2. Registration (i) (ii) (iii) (iv) Bidding shall not be restricted to pre-registered firms and such registration shall not be a condition for participation in the bidding process. Where registration is required prior to award of contract, bidders: (i) shall be allowed a reasonable time to complete the registration process; and (ii) shall not be denied registration for reasons unrelated to their capability and resources to successfully perform the contract, which shall be verified through postqualification. Foreign bidders shall not be required to register as a condition for submitting bids. Bidder s qualification shall be verified through post-qualification process. 3. Eligibility (i) National sanction lists may only be applied with approval of ADB 13. (ii) A firm declared ineligible by ADB cannot participate in bidding for an ADB financed contract during the period of time determined by ADB. 4. Prequalification and Post qualification (i) Post qualification shall be used unless prequalification is explicitly provided for in the loan agreement/procurement plan. Irrespective of whether post qualification 13 Section 52 of the Integrity Principles and Guidelines allows ADB to sanction parties who fail to meet ADB's high ethical standards based on the decisions of third parties, such a decision can only be made by the Integrity Oversight Committee on the basis of ADB's own independent examination of the evidence. As such, the process should follow the normal assessment and investigative processes prescribed by the Integrity Principles and Guidelines.

26 22 or prequalification is used, eligible bidders (both national and foreign) shall be allowed to participate. (ii) (iii) (iv) When pre-qualification is required, the evaluation methodology shall be based on pass/ fail criteria relating to the firm s experience, technical and financial capacities. Qualification criteria shall be clearly specified in the bidding documents, and all criteria so specified, and only criteria so specified, shall be used to determine whether a bidder is qualified. The evaluation of the bidder s qualifications should be conducted separately from the technical and commercial evaluation of the bid. In carrying out the post-qualification assessment, the Employer/ Purchaser shall exercise reasonable judgment in requesting, in writing, from a bidder missing factual or historical supporting information related to the bidder s qualifications and shall provide reasonable time period (a minimum of 7 days) to the bidder to provide response. 5. Preferences (i) (ii) (iii) No preference of any kind shall be given to domestic bidders or for domestically manufactured goods. Regulations issued by a sectoral ministry, provincial regulations and local regulations which restrict national competitive bidding procedures to a class of contractors or a class of suppliers shall not be applicable. Foreign bidders shall be eligible to participate in bidding under the same conditions as local bidders, and local bidders shall be given no preference (either in bidding process or in bid evaluation) over foreign bidders, nor shall bidders located in the same province or city as the procuring entity be given any such preference over bidders located outside that city or province 6. Advertising (i) (ii) Invitations to bid (or prequalify, where prequalification is used) shall be advertised in Government Public Procurement Bulletin. In addition, the procuring agency should publish the advertisement in at least one widely circulated national daily newspaper or freely accessible, nationally-known website allowing a minimum of twenty-eight (28) days for the preparation and submission of bids and allowing potential bidders to purchase bidding documents up to at least twenty-four (24) hours prior the deadline for the submission of bids. Bidding of NCB contracts estimated at $500,000 or more for goods and related services or $1,000,000 or more for civil works shall be advertised on ADB s website via the posting of the Procurement Plan. Bidding documents shall be made available by mail, or in person, to all who are willing to pay the required fee, if any.

27 23 (iii) The fee for the bidding documents should be reasonable and consist only of the cost of printing (or photocopying) the documents and their delivery to the bidder. (Currently set at 1 Mln VND, increase subject to approval of ADB) 7. Standard bidding documents (i) (ii) The Borrower s standard bidding documents, acceptable to ADB, shall be used. The bidding documents shall provide clear instructions on how bids should be submitted, how prices should be offered, and the place and time for submission and opening of bids. Bidders shall be allowed to submit bids by hand or by mail/ courier. 8. Bid Opening 35. A copy of the bid opening record shall be promptly provided to all bidders who submitted bids. 9. Bid Evaluation (i) (ii) (iii) (iv) (v) Merit points shall not be used in bid evaluation. Bidders shall not be eliminated from detailed evaluation on the basis of minor, non-substantial deviations. 14 Except with the prior approval of ADB, no negotiations shall take place with any bidder prior to the award, even when all bids exceed the cost estimates. A bidder shall not be required, as a condition for award of contract, to undertake obligations not specified in the bidding documents or otherwise to modify the bid as originally submitted. Bids shall not be rejected on account of arithmetic corrections of any amount. However, if the Bidder that submitted the lowest evaluated bid does not accept the arithmetical corrections made by the evaluating committee during the evaluation stage, its bid shall be disqualified and its bid security shall be forfeited. 10. Rejection of All Bids and Rebidding (i) (ii) No bid shall be rejected on the basis of a comparison with the owner's estimate or budget ceiling without the ADB s prior concurrence. Bids shall not be rejected and new bids solicited without the ADB s prior concurrence. 14 Minor, non-substantial deviation is one that, if accepted, would not affect in any substantial way the scope, quality, or performance specified in the contract; or limit in any substantial way, the Contracting entity rights or the Bidder s obligations under the proposed contract or if rectified, would not unfairly affect the competitive position of other bidders presenting substantially responsive bids.

28 Participation by Government-owned enterprises 36. Government-owned enterprises shall be eligible to participate as bidders only if they can establish that they are legally and financially autonomous, operate under the Enterprise law and are not a dependent agency of the contracting entity. Furthermore, they will be subject to the same bid and performance security requirements as other bidders. 12. Non-eligibility of military or security units 37. Military or security units, or enterprises which belong to the Ministry of Defense or the Ministry of Public Security shall not be permitted to bid. 13. Participation by Foreign contractors and suppliers. Joint Ventures and Associations (i) (ii) (iii) Foreign suppliers and contractors from eligible countries shall, if they are interested, be allowed to participate without being required to associate or form joint ventures with local suppliers or contractors, or to subcontract part of their contract to a local bidder. A bidder declared the lowest evaluated responsive bidder shall not be required to form a joint venture or to sub-contract part of the supply of goods as a condition of award of the contract. A license for foreign contractors operation in Vietnam shall be provided in a timely manner and shall not be arbitrarily withheld. 14. Publication of the Award of Contract and Debriefing. (i) (ii) (iii) For contracts subject to prior review, within 2 weeks of receiving ADB s Noobjection to the recommendation of contract award, the EA shall publish in the Government Public Procurement Bulletin, or well-known and freely-accessible website the results of the bid evaluation, identifying the bid and lot numbers, and providing information on: i) name of each bidder who submitted a bid; ii) bid prices as read out at bid opening; iii) name and evaluated prices of each bid that was evaluated; iv) name of bidders whose bids were rejected and the reasons for their rejection; and v) name of the winning bidder, and the price it offered, as well as the duration and summary scope of the contract awarded. For contracts subject to post review, the procuring entity shall publish the bid evaluation results no later than the date of contract award. In the publication of the bid evaluation results, the EA shall specify that any bidder who wishes to ascertain the grounds on which its bid was not selected, should request an explanation from the procuring entity. The procuring entity shall promptly provide an explanation of why such bid was not selected, either in writing and / or in a debriefing meeting, at the option of the borrower. The requesting bidder shall bear all the costs of attending such as debriefing. In this discussion, only the bidder s bid can be discussed and not the bids of competitors.

29 Handling of Complaints 38. The national competitive bidding documents shall contain provisions acceptable to ADB describing the handling of complaints in accordance with with Decree No. 85/20009/ND-CP of 15 October 2009 and Decree No. 68/20009/ND-CP of 12 September 2012 with Decree No. 85/20009/ND-CP of 15 October 2009 and Decree No. 68/20009/ND-CP of 12 September ADB Member Country Restrictions 39. Bidders must be nationals of member countries of ADB, and offered goods, works, and services must be produced in and supplied from member countries of ADB. 17. Fraud and Corruption 40. ADB will sanction a party or its successor, including declaring ineligible, either indefinitely or for a stated period of time, to participate in ADB-financed activities if it at any time determines that the firm has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for, or in executing, an ADB-financed contract. 18. Right to Inspect/ Audit 41. Each bidding document and contract financed from by ADB shall include a provision requiring bidders, suppliers, contractors to permit ADB or its representative to inspect their accounts and records relating to the bid submission and contract performance of the contract and to have them audited by auditors appointed by ADB.

30 26 C. Consultant's Terms of Reference External Auditor I. Delivery of Opinions and Reports 42. The auditor will provide the following opinions and reports to management (with copies to ADB), in accordance with the following timeframes: Audit Opinion on the Annual Project Accounts of the Project: Audit Opinion on Annual Financial Statements (balance sheet, statement of income and expenses, and related statements) of the Project, and Management Letter relating to the Project. 43. All reports must be provided in the English language and certified copies furnished to ADB promptly after their preparation but in any event not later than six (6) months after the close of the Fiscal Year to which they relate. Tasks of the consulting services will include: Annual audit: Auditing loan grant and government counterpart funds utilized in accordance with the provisions of the Loan agreement between the Government and ADB and the Grant agreement between the Government of Vietnam and the Government of Australia. Auditing all Goods and Services procured from loan and grant resources. Auditing all necessary documents, accounting books and records relating to expenditures of the Project. Auditing imprest accounts opened and maintained in compliance with the both loan and grant agreements.. Project completion audit: Preparing project completion auditing reports, which are to include all activities in compliance with ADB requirements. Preparing a separate project completion auditing report in compliance with Vietnamese auditing standards and laws. II. Scope of work and Terms of Reference: 44. The audit will be conducted in accordance with Vietnamese Accounting and Auditing standards and related regulations in Vietnam s law. The audit will be also in accordance with ADB s requirements. The Auditor will be allowed access to all legal documents, correspondences and other information related to the project that is needed. The scope of work for the consulting services are, but not limited, to the following: Auditing Standards and Program. The audit will be carried out in accordance with the auditing standards, including professional or general standards, standards of fieldwork, and reporting standards. The audit program will consider the risk of material misstatements resulting from fraud or error. It should include procedures that are designed to provide reasonable assurance that material misstatements (if any) are detected.

31 27 Accounting Policies and Changes. The auditor should comment on the project s accounting policies, and confirm the extent to which the agreed project accounting policies have been applied. In particular, the auditor should note the impact on the APA and AFS arising from any material deviations from the agreed accounting standards. The auditor should also comment on any accounting policy changes, either during a financial year, or from one year to another. Imprest Account The Imprest Account reflects: (i) deposits and replenishment received from financiers, (ii) payments substantiated by withdrawal applications, and (iii) the remaining balance at financial year-end. The auditor will examine whether the Imprest Account has been maintained in accordance with the provisions of the relevant financing agreements. The auditor must form an opinion on whether the Imprest Account was used in compliance with required ADB procedures and the fairness of the presentation of Imprest Account activity and the year-end balance. The auditor should examine the eligibility and correctness of financial transactions during the period under review, account balances at the end of the period, the operation and use of the Imprest Account in accordance with the financing agreement, and the adequacy of internal controls for this particular disbursement mechanism. Statements of Expenditures (SOE). The auditor will audit all SOEs used as the basis for the submission of withdrawal applications to ADB. These expenditures should be verified as to eligibility in reference to the loan and grant agreements Compliance with Financial Covenants. The auditor will confirm compliance with each financial covenant contained in the project financing agreements. Where present, the auditor should indicate the extent of any non-compliance by comparing required and actual performance measurements for each financial covenant with the financial year concerned. Compliance with Financial Assurances. The auditor will confirm compliance with all financial assurances contained in the project legal documents. Where present, the auditor should indicate the extent of any non-compliance by comparing required and actual performance of the borrower in respect of these requirements with the financial year concerned. Use of Funds for the Purpose Intended. The auditor will confirm, or otherwise, that: (i) all funds have been used in accordance with the loan and grant agreements with due attention to economy and efficiency, and only for the purpose for which the financing was provided; and (iii) goods and services financed have been procured in accordance with the relevant financing agreements. Record Keeping. The auditor will pay particular attention to whether all necessary supporting documents, records, and accounts have been kept in respect of all project activities, with clear linkages between the APA and the accounting records. Internal Control Systems. The auditor will assess the adequacy of the project financial management systems, including internal controls. III. Management Letters 45. At the conclusion of the audit, the auditor will prepare a management letter for the audited project, detailing: