WORK REPORT FOR 2006 WORK PLAN FOR 2007

Transcription

1 Work Report for 2006 SECOND ULAANBAATAR SERVICES IMPROVEMENT PROJECT WORK REPORT FOR 2006 WORK PLAN FOR 2007 ULAANBAATAR

2 CONTENTS 1. INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) CREDIT... 4 PROJECT NAME... 4 SECTOR... 4 PROJECT IMPLEMENTATION AREA... 4 PROJECT IMPLEMENTATION BACKGROUND AND DEMANDS... 4 PROJECT OBJECTIVES... 4 WORKS TO BE IMPLEMENTED UNDER THE PROJECT... 4 PROJECT PROFITS AND RESULTS... 5 PROCEEDS AMOUNT REQUIRED FOR PROJECT IMPLEMENTATION (MILLION US DOLLAR) 5 LEGAL ENVIRONMENT FOR THE PROJECT... 6 ENVIRONMENTAL AND SOCIAL IMPACTS... 6 WORKS IMPLEMENTED IN 2006 BY IDA CREDIT... 7 INFORMATION AND ADVERTISEMENT WORK... 8 CONCLUSION NETHERLANDS GOVERNMENT GRANT (TRUST FUND) TF GRANT NAME:... 9 OBJECTIVES:... 9 GRANT PROCEEDS AMOUNT:... 9 IMPLEMENTED PERIOD:... 9 PROJECT COMPONENTS:... 9 IMPLEMENTED WORKS /BY DISTRICT/... 9 CONCLUSION JAPANESE SOCIAL DEVELOPMENT FUND (JSDF) - TF GRANT NAME: OBJECTIVES: PROCEEDS AMOUNT: IMPLEMENTATION PERIOD: COMPONENTS: IMPLEMENTED WORKS:

3 CONCLUSION FRENCH GOVERNMENT GRANT (FASEP 647): GRANT NAME: OBJECTIVES: GRANT AMOUNT: PROJECT COMPONENT CONTRACTOR: IMPLEMENTED PERIOD: COMPLETED WORKS: CONCLUSION PROJECT OF STRENGTHENING PUBLIC EXPENDITURE CAPACITY MANAGEMENT AND HUMAN RESOURCES MANAGEMENT OF MUB: GRANT NAME: OBJECTIVES: PROCEEDS AMOUNT: COMPONENTS: IMPLEMENTATION PERIOD: CONTRACTOR: COMPLETED WORKS: CONCLUSION COOPERATION WITH OTHER ORGANIZATIONS AND MANAGEMENT IMPROVEMENT. 14 CONCLUSION CONCLUSION CONCLUSION DIFFICULTIES FACED WITH CREDIT AND GRANT IMPLEMENTATION PLANNED WORKS IN 2007 /LOAN AND GRANT/

4 Work Report for International Development Association (IDA) Credit Project name Second Ulaanbaatar Services Improvement Project (USIP2) Sector Public services sector Project Bayankhoshuu, Dari-Ekh, Dambadarjaa, Chingeltei, Uliastai, Naran ger implementation area area Project implementation The Government of Mongolia received Credit Loan amounting of 18 background and million US dollar from World Bank for carrying out the USIP2 demands implementation as a second stage implementation of USIP under the request of Government of Mongolia (GOM) for provision of financial assistance to develop infrastructure required for supplying ger area people with quality water meeting the standards in a sustainable way. The main project tasks to be implemented in water sector: a/ necessary demands to improve ger area public services; b/ reduce water loss for city network; c/ water source protection through water new tariff; d/ improve institutional financial capacity through expenditure reduction and fully recovery of expenditure. Support the city development through investment of main sectors such as increase of water supply reliability and operational efficiency, and urban planning, land organization, MUB administration and financing. Project objectives Works to be implemented under the project The Project key objective is to deliver standard meeting water supply services to ger area residents of Ulaanbaatar city and sustain the water supply services as a reliable and sustainable manner Second Ulaanbaatar Services Improvement Project (USIP2) shall be carried out in Total cost of the project is about million US dollar including domestic financing of 4.98 million US dollar. Contract number: 3890-MOG, The project shall cover the following ger areas. Chingeltei /Chingeltei district/ Dambadarjaa /Sukhbaatar district/ Bayankhoshuu /Songinokhairkhan district/ Dari-Ekh /Bayanzurkh district/ Naran /Bayangol district/ Uliastai /Bayanzurkh district/ The project has 4 components. 1. Ger area water supply (1) Supply and installation of about 78.3 km pipes; Total of 78.3 km of pipes shall be installed and from which 42 km of pipes shall be installed in Bayankhoshuu, 13 km of pipes shall be installed in Chingeltei, 23.3 km of pipes shall be installed in Dambadarjaa and Dari Ekh ger area. Total of 104 water kiosks shall be connected to city network including existing 82 water kiosks and new 22 kiosks to the city network; (2) Construction of 3 reserviours and 3 pump stations; construction or rehabilitation of 104 new kiosks; connecting of 17 institutions such as hospitals and schools and 430

5 households to the water supply network; (3) Supply and installation of water meters, valves, various pumps and associated electrical equipment; (4) Supply of 15 water trucks and 5 faecal vehicles together with spare parts; 2. City water supply improvement (1) Introduction of new technology required for replacement of about 12.2 km pipes of city water network; (2) Replacement of 4 pumps and equipment for western district pump station; ehnancement of telemetering system; construction of monitoring well; and supply of laboratory equipment; 3. Energy efficiency improvement Supply and installation of about 90 submersible pumps; of 1000 kw transformer and control system for intake well at the Upper source; and of 59 km of energy efficiency overhead wire lines which to be used in the well fields of Upper, Central and Meat complex source. 4. Institutional Development and Project Management (1) Consulting Services for preparation of detailed engineering designs and bidding documents, procurement process, construction supervision, management and quality control; (2) In scope of policy: Consulting Services for communication, internal financial controls, individual connections and metering, sanitation, private sector participation for operating kiosks and portable water supply, increasing energy efficiency and reducing operating costs. Project profits and results Proceeds amount Improvement of ger area living conditions and conditions to transfer ger area into private apartments area (PAA) shall be provided. Strengthening of USUG operation and management. Increase private sector participation through privatiziation of water kiosks and water trucks. Reduction of water loss in the network. Reduction of utilization cost through introduction of telemetering system, control valve and energy efficiency equipment. Improvement of water availability and network reliability. Connection of ger area households and institutions to the water supply system. Reduction of water consumption and water tariff difference between ger area and apartments customers. Reduction of water-born disease in ger area. Introduction of new technology for rehabiliation of city s old water network. IDA Credit -18 million US dollar 5

6 required for project implementation (million US dollar) Legal environment for the project Environmental and social impacts 0.57 million US dollar from MUB for 50% of PMU operational expenses and relocation compensation 4.41 million US dollar from USUG for 67% of construction work and PIU costs Total: million US dollar Development Credit Agreement was signed between Mongolia and International Development Association in July 23, 2004 and ratified by State Ikh Khural in October 22, Project Agreement signed between MUB and World Bank IDA was ratified by the Decree of Citizens Representative Khural dated as November 1, 2004 and responsibility to establish Subsidiary Loan Agreement (SLA) between Government of Mongolia and MUB; SLA between MUB and USUG was handled to Capital City Mayor. Authority to sign on the SLA was officially approved by the Mayor s Decree dated November 4, The Subsidiary Loan Agreement by USUG specifies that the principal amount repayment period to 40 years, including grace year of 10 years with 5% interest rate annually. The resolution of Subsidiary Loan Agreement Amendment for USIP was approved by the letter of Director in charge of Mongolia, Eastern Asia and Pacific region of World Bank dated April 8, 2005 to amend the principal amount repayment period of 20 years, including grace year of 5 into principal amount repayment period to 40 years, including grace years of 10 years. Mayor s Recommendation #1/1286 was issued in July 15, 2005 and new water tariff became effective from September 1, Through WB Approval dated as November 29, 2005 the USIP2 Disbursement became effective. In order to strengthen USUG financial capacity and provide conditions for that organization to be financially independant to carry out the USIP2 project, the WB recommended MUB and Ministry of Finance (i) to writeoff USIP and USIP2 foreign exchange risks discrepency for USUG; (ii) to postpone the repayment for USIP supposed to be repaid in 2004, 2005 with two years (iii) to cancel penalty charge for delayed interest payment and to make amendment in SLA, however these issues is pending to be solved. According to the WB requirements, PMU staffs Labour Agreement was amended as to employ PMU staff as a Domestic Consultants and the staffs Contracts were sent for WB approval. Through ger area water supply improvement there would be some direct and indirect positive impacts for the environment. 6

7 Works implemented in 2006 by IDA Credit Social significance for disease reduction and hygienic condition improvement through water quality improvement of ger area residents. Through connection of water kiosks to the central water supply services the possibility to use quality water which meets standards requirements shall be increased. Through public services improvement the women and children would have possibility to improve and educate themselves by saving the time. Consulting team for preparation of detailed engineering designs completed their works in May 2006 and total of 17 designs were prepared and approved by expertise. Moreover, Technical Specifications and Bill of Quantities for 19 Contracts were prepared. Consulting team submitted about 30 volumes of documents in 9 kinds of reports such as engineering geology and geodesy survey, frozen depth study, heating technical estimation, hydraulic estimation, inception and final reports, project management manual and construction supervision principles. PMU completed the preparation of bidding documents, invitation to bids, bid evaluation, notification of award for the Contractors/Supplier and Contract signing for the following 4 construction and 5 goods procurement: Construction work: o Installation and construction of water pipes and water kiosks in Bayankhoshuu South and North ger area o Installation and construction of water pipes, water kiosks, reservoir and pump station in Chingeltei ger area o Construction of 10 water trucks garage together with engineering network and 9 truck piped kiosks o Drilling and construction of 3 monitoring wells for supervision of city water quality and cleaning of 6 wells Supply and provision: o Supply of Preinsulated Polyethylene water pipes (HDPE), fittings and related goods o Supply of Preinsulated Ductile iron water pipes, fittings and related goods o Supply of valves and accessories o Supply of pumps and accessories o Supply of 10 water trucks and 5 waste water trucks According to the Contracts of Supply of Preinsulated Polyethylene water pipes; Supply of ductile iron water pipes; supply of valves and pumps signed with Suppliers, the site visit for investigation and supervision of HDPE, ductile iron water pipes, fittings, valves and pumps manufacturing process and quality test was organized. Technical issues aroused during the preparation of drawing designs was solved with cooperation with USUG engineers and some complicated issues were submitted to Professional Group headed by Mayor s office and following resolutions were issued. 1. By renewing the daily water consumption for ger area households as 25 liter/person, 4.5 liter/person for institutions, 80 liter/person for connected households the average water consumption of 25 liter/person has changed to 37.5 liter/person and it was agreed to use 37.5 liter/person for the computation 7

8 2. Issues in scope of policy and coordination required for ger area households connection was discussed and solved The study for 250 households affected by pipe alignment was carried out, and relocation notice was delivered to about 183 households in cooperation with districts land management departments and relocation cost was incorporated in urban investment plan. Engineer Geodesy Co., Ltd was selected as a Consultant for preparation of Feasibility Study for water and wastewater network connection in selected ger area. The Company carried out the feasibility study for connection of water and wastewater network among the 400 households of Nisekh and Naran ger area, technical and financial difficulties were identified, and several technical resolutions were prepared. Reports, study and designs were prepared in Mongolian and English version and submitted to correspondent ministries, departments for review and incorporation of investment plan. The advertisement of Consulting Services for Public Communication Program aiming at organization of water value and water usage training, liaison between water resources deficiency and water tariff; increase public understanding of water value was published and 6 companies were short listed. World Bank approval for selection of ME Consulting Co., Ltd for the Consultant for above mentioned consulting services was received in January 11 and according to World Bank approval the technical and financial proposal is received and now it is under review. Information and advertisement work Conclusion In order to introduce USIP2 objectives, guidelines and activities to the community; to identify existing ger area public services situation and further way to improve it on the community based comments and innovation; to give information on water quality, standards and resources; the information and advertisement was prepared with appropriate plan. The advertisement was carried out in the following manners. Contract was signed with radio and advertisement program was implemented Cooperation with journalists for giving them proper understanding of water extraction and water disposal company (USUG) through organization of site visit tour To deliver the information through the organization s web site Project introduction and pipe laying position in ger area under USIP2 was posed at water kiosks for advertising it to the community The Beauty of the City titled documentary film about the project implementation was produced Project information distribution through khoroo Cooperation with students for gathering their comments on advertisement work method regarding water saving. 5 tenders were delayed according to the procurement plan by the end of 2005, but as of December 31, 2006 all the delayed procurement process was regained and there is no any delayed procurement process for a today. All the design works were completed and there is noticeable progress in announcement of Invitation to Bids and Contract signing with the Contractors. 8

9 Work Report for 2006 WORKS IMPLEMENTED IN 2006 BY GRANT PROCEEDS PMU organized the following work implementation funded by Grant proceeds accompanying World Bank credit loan. 2. Netherlands Government Grant (Trust fund) TF Grant name: Objectives: Grant proceeds amount: Implemented period: Project components: Implemented works /by district/ Project of Mongolian Environmental Reform To improve Ulaanbaatar city environment and increase green facilities 1.85 million US dollar (1.6 month) In scope of the project Mongolian environmental reform Increase green facilities of Ulaanbaatar city Construction of flood protection drainages, ger area road and bathhouse Planting berry trees and bushes in ger area households plot with community participation The facilities constructed and commissioned in 2006 and submitted to Property Management Department of MUB are as follows: In Songinokhairkhan District: km of reinforced concrete drainage, sedimentation tank and 3 energy observing facilities in Tolgoit. Cost: 577 thousand US dollar 2. Construction of 0.6 km of improved paved auto road and reinforced concrete bridge with 18 m stan in Denjing ger area, 1st khoroolol. Cost: thousand US dollar In Khan-Uul district: 1. Construction of 6 shower bathhouse together with outside upgrading works. Cost 83.1 thousand US dollar In Sukhbaatar district: 1. Construction of Selbe river flood protection reinforced concrete drainage of 2.1 km. Cost: thousand US dollar 2. Dismantling of about 40 pit latrines in Sharga Morit Summer camp area and construction of environmentally friendly public toilet together with grey water soak pit and dust bin. Cost : 10 thousand US dollar In Chingeltei district: Dismantling of several indepenent pit latrines which located in polluted 3 spots of Yargait and Yargait bogino summer camp area and construction of environment friendly public pit latrines together with grey water soak pit and

10 dust bin. Total cost is 40 million US dollar. The Grant unallocated savings was reallocated for the following study works. 1. Environmental impacts study for Sanitation condition in the Camp area of Ulaanbaatar city 2. USUG Laboratory Study for identification of measures for USUG laboratory to reach the international standards, assessment and evaluation of existing situation, staff training and management improvement Conclusion Research on the Pollen allergic plants and their spread in Ulaanbaatar area for reviewing the allergic disease and its existing situation and identification of further measuring programs and methodology Netherlands Government Grant proceeds by World Bank was successfully allocated for the appropriate works within short term. By using the 98% of allocation for Grant amount of 1.85 million US dollar in short term, UB city green facilities condition improved and flood risk for citizens were mitigated. Through experience it is shown that using the Grant proceeds for the public owned green facilities there would be some difficulties for risk of utilization process and irresponsibilty for maintenance and upgrading 10

11 Work Report for Japanese Social Development Fund (JSDF) - TF Grant name: To impove ger area infrastructure on community based participation Objectives: Proceeds amount: Implementation period: Components: Implemented works: Development and implementation of community led infrastructure plan, construction of low cost pit latrines and development of micro credit 1.8 million US dollar Establishment of CBOs among the citizens Development of community led infrastructure plan and its actual implementation Construction of ventilized low cost pit latrines, organization of health awareness training and development of micro credit PMU completed the following works by the Grant. Selection of Consultant Services company and preparation of Study for public utility facilities of ger area and guidelines for community led activities. Particularly: Study for identification of demands for improving the public utility facilities in selected 7 ger area, ranking of the demands by their significance and community participation and further measures. Preparation of Manual for establishing CBOs among the citizens. Selection of 28 facilitators (for getting preparaton) to establish CBOs among the citizens and training of these facilitators. Terms of Reference (TOR) for Consulting Services for preparation of community led infrastructure plan (CLIP), liaison of community with districts and khoroos, preparation of design drawings and implementation of actual works had been prepared by PMU and Consultant s advertisement was published and shortlisting for Consulting Services is underway. 24 meetings for 26 khoroos facilitators had been organized in Bayanzukh, Bayangol, Songinokhairkhan, Sukhbaatar, Chingeltei and Nalaikh district and draft plan for infrastructe development had been prepared by 4th khoroo of Songinokhairkhan district. Currently there are 6 CBO established and being formed. Conclusion Suspended process of JSDF implementation had been handled out and now the higher attention is focused on the timely implementation of the Grant. Due to the lack of practise in ger area people s participatory approach in developing the infrastruce by themselves and preparing of plan from bottom to the top in Mongolia as well as less amount of professional institutions and specialists and low knowledge, innovation and activeness of citizens, the work is facing some problems.

12 Work Report for French Government Grant (FASEP 647): French Government provided FASEP Grant for Mongolian under the request of MUB for providing financial assistance to carry out Ulaanbaatar Water and Wastewater Master Plan. Grant name: Objectives: Grant amount: Project component Preparation of Ulaanbaatar Water and Wastewater Master Plan Preparation of Ulaanbaatar Water and Wastewater Master Plan coordinating with General Plan of Ulaanbaatar city upto million euro Preparation of Water Master Plan Preparation of Sewerage Master Plan Conclusion of water sources Contractor: Implemented period: Completed works: Seureca company, Franch Seureca company completed the Ulaanbaatar Water and Wastewater Master Plan in May 2006 and submitted to Mr. Ts. Batbayar, Capital City Mayor of Ulaanbaatar city. The overview of the completed work is as follows: Ulaanbaatar water and wastewater master plan upto 2020 was developed by 5 years covering urban 9 districts and population Ulaanbaatar Water and Wastewater Master Plan was prepared with close coordination with General Plan of Ulaanbaatar city upto 2020 and this project covered the participation of architechures of Urban Development Policy Department of MUB, specialists of Urban Plan, Reseaerch and Design Institute, MUB and based on the statistic data Ger area development was divided into 5 zones and potential alternatives and recommendations for zones water extraction, transmission and water treating was prepared Alternative comments on resolution for ger area households sanitation was developed Existing situation of water sources and further measures are identified Water kiosks, their services scope, pressure zone and newly to be constucted networks are specified in the map with scale of M1: M1:40000 and published Epanet program of water hydralic estimation was installed in USUG and training for engineers and technicians were organized Inception, Intermediate and Final Report of Ulaanbaatar water and wastewater Master Plan and 14 maps were prepared and submitted to MUB

13 Conclusion Now Ulaanbaatar city has Water and Waste Water Master Plan. All level of organizations responsible for urban development policy, investment coordination, design development and project and program implementing units should use this Master Plan as a Guidelines and should co-work on its improvement and sophistication. 5. Project of Strengthening Public Expenditure Capacity Management and Human Resources Management of MUB: Grant name: Strenghtening Public Expenditure Capacity Management and Human Resources Management Objectives: To improve public expenditure management of MUB and other implementing agencies of the city according to the Public Sector Management and Finance Law and to take further measures on improvement of human resources management and organization, to provide required equipment for the city and MUB and to organize training for the staffs. Proceeds amount: 311 thousand US dollar Components: Provision of computers and equipment Improvement of public expenditure management Improvement of human resources management and organization Organization of staffs training Implementation period: Contractor: Completed works: MUB and Glocoms Inc, USA Selection of Consultant for above mentioned project had been organized with cooperation of Treasure Department of MUB and Public Administration Department of MUB. The overview of completed works by the Consultant in the year of 2006 is as follows: Preparation of Inception and Intermediate Reports in English and Mongolian version Preparation of Recommendation through review of state treasury and administrative operation of 3 districts and 5 organizations Organization of 3 stage training for finance and human resources specialists of district and MUB and 8 people covered in training visit to Philipine and USA Under the project 4 portable and 36 permanent computers, 2 projectors, 1 photocopier machine and other equipment were supplied 3 kinds of recommendation and 4 kinds of manual are published in 13

14 number of 1200 and distributed to MUB staffs Establishment of training hall for distributing information on finance adn budget Conclusion As a result of Consultant Service of Strengthening Public Expenditure Capacity Management and Human Resources Management the cooperation and liaison between State Treasury Department and Public Administration Department has been improved and great significance created for establishment of base for staffs training and development Cooperation with other organizations and management improvement Some works are organized for cooperation with related organizations, teams and contractors for implementing the project objectives successfully within the term, motivation of each person s innoviation, support staffs enthisiasm for improving their knowledge and education, spending staffs free time efficiently and protection of staffs health. A. Cooperation with other organizations Cooperated as follows: Cooperation with Ministry of Finance for position of required Invitation to Bids in the website of Ministry of Finance according to the Procurement Law of Mongolia, review and approval for the Bidding Document, approval from Ministry of Finance for the Evaluation Committee s Resolution, getting advice and inquiries and preparation of addition material and documents according to recommendation. 5 Bidding Documents got the approval from MOF in Appropriate measures were taken according to the resolution of Citizens Representative Khural, Action Plan of Mayor, responsibility given from General Manager of Ulaanbaatar city are as follows. Constucted and commissioned facilities by Credit and Grant are commissioned to Property Management Department of MUB and cooperated with related organizations of MUB on further improvement of facilities utilization and protection. In particular 2006 year was announced as a Supporting year of khoroos development and 5th khoroo of Nalaikh district was given to PMU to take responsibility for. PMU assisted 5th khoroo for getting the investment of 17.9 million tugrug in the field of improvement of khoroo s activities, staffs training, upgrading and reconstruction of khoroo and health improvement of khoroo s citizens. PMU was awarded by honoured certificate and one million tugrug in Ulaanbaatar city for active participatory institution for organization of Supporting year of khoroos development : Study on Pollen Allergic Plants and their impacts on residents health in Ulaanbaatar city was carried out by Netherlands Government Grant for supporting the objectives of Citizens Representative Khural to act 14

15 against urban pollen allergic plants. To introduce project activities to Steering Committee, to get resolution on technical and other issues and their implementation Steering Committee meeting organized 3 times and design drawings for water supply facilities for USIP2 and procurement plan was approved by SC and Ulaanbaatar Water and Wastewater Master Plan was commented. Aide Memoire and Management Letter by World Bank Mission distributed to all concerned organizations, reports and study results are presented to them, final submittal of reports after incorporating the rised comments and recommendations, distribution to all concerned organizations and organization of work according to the recommendations. For establishing the Evaluation Committee the representatives of Government and MUB are included in the EC. 9 Evaluation Committees were established by Mayor Decree and 9 resolutions to select the Supplier/Contractor was issued and there was no cancelled and re-announced tender in During the project implementation the meeting with Contractors, PIU and PMU is formed. The meeting for each contract has been organized once in 2 weeks and in total about 20 meetings were organized. According to the minutes of meeting for the each meeting the work implementation was supervised and technical issues were solved which was great stimulus to carry out the construction work according work scheme. Conclusion From PMU sides, the significant progress were made for cooperation with ministries, MUB and districts in 2006 B. Improvement of staffs knowledge and education and staffs health protection: In order to improve staffs knowledge and education as well as to improve work organization the measures such as training, inter active learning from each other, domestic and foreign tour training, participation in exhibition, covering of training for MUB specialist related with project activities were taken. In 2006 six people attended in Mongolian Procurement New Law training, one person attended in accounting training and 9 people (in duplicated number) worked on overseas mission for tour training and supervision of manufacturing process. 8 specialists from MUB studied experience in USA, Philiphine and Republic of China and 7 people from USUG also shared experience in Holland and Republic of China by IDA Credit and Netherlands Government Grant. 15

16 14 staffs of PMU covered in health check and staffs picnic was organized in Uvurkhangai aimag. Conclusion As a result coordination of project activities improved and actual contribution for assitance from correspondent agencies for solving the project issues were made. C. Credit and Grant disbursement and financial operation: Project financing plan for was renewed according to the updated procurement plan and counterpart from World Bank, USUG and MUB is prepared by percentage and in currencies and submitted to World Bank. 50% of PMU operational expenses and resettlement expenses for 2007 were calculated and incorporated in city budget. Account of Netherlands Government Grant implemented by USIP2 was audited by Nimm Audit Co., Ltd. Project financial operation for was reviewed by World Bank. According to the conclusion the following measures are taken. Project financial registration for credit and grant is installed and registered in program Credit and Grant project is coded by financial registration and sources, expenses and contract Monthly and quarterly reports are constantly prepared and submitted to World Bank and Word Bank Residential office in Ulaanbaatar Financial and procurement specialist attended in the training Budget operational disbursement for 2005 was inspected by Tax office of MUB. Partially paid payment for auto vehicles were found by the inspection and such payment was repaid. Professional Inspection Department of MUB inspected the financial operation in There is no variance found from the inspection. Social insurance payment is inspected by Professional Inspection Department of MUB and Social Insurance Department of Chingeltei district. There is no variance found from the inspection. Credit disbursement for 2006 was 7% for the credit and 98% for Netherlands Government Grant. Financial report is attached in Annex 2. Conclusion Difficulties faced with Credit and Grant implementation As a result of hard working to eliminate some variances found by first inspection of WB financial department the further mistakes did not occur for the following inspections held by all level organizations. During the project implementation the following difficulties faced. 1. Water tariff increase is the background for the project implementation however for Mongolia to increase the tariff not only the water tariff is very sensitive issue due to the higher percentage of poor people in Mongolia emphasized by city authorities. However measures are being seeked for strengthening of USUG financial capacity. In particular on the occasion of VAT 16

17 tax reduction by 5% in January 1, 2007 the water tariff increase for USUG by such amount is approved. 2. In order to strenghten USUG financial capacity and to provide that organization the conditions to fully cover the 67% of financing for the USIP2 construction work the World Bank recommended (i) USUG not bear the foreign currency risk discrepancy for USIP1 and USIP2 (ii) to postpone the loan repayment for USIP in 2004 and 2005 with two years (iii) to cancel the penalty charge for delayed interests payment however none of them are pending to be solved. 3. According to the procurement new law requirements of Mongolia the Bidding documents, Evaluation reports and Evaluation Committee resolution above the threshold price of 1 billion tugrug are reviewed by MOF and Evaluation committee resolution which is prepared by Evaluation Committee consisting of professional specialists from ministries and MUB are cancelled just because of low cost not considering the technical requirements causes time wasting and even the bidder who did not meet the technical requirements have tendency to win the tender through several clarifications. 4. There were some issues such as lack of liaison between policy maker and implementing agency, lack of integrated data base and inquiring for payment for lending the documents and materials required for city study by correspondent organization under MUB. 5. The practice of establishment of CBO by community participation and solving their problems through that CBO is not common in Mongolia, therefore this approach is quite new for PMU, which is trying to implement that kind of project. Thus it is very necessary to cover PMU staffs and citizens representatives to the training. 6. The area for construction of water supply facilities which is identified by Preliminary Design is being granted for other purposes. During the survey there were 48 households to be affected by relocation however by the end of the 2006 this number increased to 69. Therefore due to the increase of relocation expenses the city finance would face some difficulties. 17

18 Work Report for 2006 Planned works in 2007 /Loan and Grant/ One. In scope of USIP2: Cooperation with USUG for commissioning, delivering to guaranteed warehouses, registeration and protection by safety guard of all material supplied by Contracts of Supply of Preinsulated Polyetheylene water pipes, Ductile iron water pipes, valves and armatures, and pumps and accessories. Receiving of 10 water trucks and 8 waste water trucks and commissioning of them to USUG Starting of construction work of pipe laying in Bayankhoshuu North and South ger area Selection of Contractor for construction work of pipe laying in Chingeltei ger area and starting of the construction work Completion of construction work of garage for 10 water trucks and commissioning for operation Construction and commissioning of 9 truck piped kiosks in ger areas Drilling of monitoring wells for water quality supervision and completion and commissioning of new kiosks and rehabilitated kiosks Starting and completion of replacement of pumps in western district pump station Preparation of Bidding Document for construction of ger area network reservoirs and pump stations and selection of contractor Preparation of Bidding Document for supply and installation of telemetering system and selection of contractor and starting of the work Resolution of technical issues for new technology of city area pipe lining and preparation of bidding document Preparation of Terms of Reference and detailed work plan for the works to be carried out under Energy efficiency increase as a new component of the project Two. Japanese Social Development Fund: Strengthening of newly established CBOs in the districts, making them into organization and organization of separate meetings for each group to train them to work in team Presentation of CBO experience by Bayanzurkh district s facilitators based on their own experience shall be presented to each district Organization of introductory tour and journey with other NGOs specialized in community mobilization and activiation Preparation of infrastructure development plan with participation of community, liaison between community and districts and khoroos, preparation of drawing designs, selection of Consultant team for actual work implementation and start the Consultants work. Three. In the scope of Strengthening Public Expenditure Capacity

19 Management and Human Resources Management in MUB: Submission of Final Report prepared by Consultant Company and completion of Consulting work Organization of discussion among the correspondent organizations for the Consultant Services Report Distribution of project related documents to city institutions Four. Planned works within PMU operation: On the occasion of 10th anniversary for Public Services Project implementation in Mongolia funded by World Bank is occuring the following packaged measures are planned: They are as follows: Preparation and implementation of 10th anniversary program Presentation of exhibition for showing implemented works and work results under USIP1 and activities process for USIP2 Production of short term Documentary Film Organization of tour training and advertisement among the children of ger area schools and kintergarden for increasing project activities understanding Planned works for strengthening PMU staffs capacity and health protection Covering of health check for each staff once a year Organization of picnic in the mother country s sightviewing places once a year with duration of 7 days Provision of conditions to educate staffs and preparation and implementation of training plan Organization of multi-approach management measures for self development, inter active learning from each other and knowledge and education impovement 19