AIDE MEMOIRE ADB Loan 3210-FIJ: Transport Infrastructure ... · selection of consultants must...

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AIDE MEMOIRE

ADB Loan 3210-FIJ: Transport Infrastructure Investment Sector Project WB Project P150028: Transport Infrastructure Investment Project

REVIEW MISSION

Suva, Fiji 19-22 April 2016

I. INTRODUCTION

1. A joint Asian Development Bank (ADB) and World Bank (WB) Review Mission (the Mission)1 visited Suva, Fiji from 19-22 April 2016 to review implementation progress for the jointly implemented ADB Loan 3210-FIJ: Transport Infrastructure Investment Sector Project and WB Project P150028: Transport Infrastructure Investment Project (the project). Agreements reached by the Mission with the Ministry of Finance (MOF), and the Fiji Roads Authority (FRA) are recorded in this Aide Memoire, which is subject to the approval of higher authorities within the Government of Fiji (the Government), ADB, and WB. A list of persons consulted is in Annex 1.

II. BACKGROUND

2. The ADB project outcome is improved safety and resilience of land and maritime infrastructure. It is aligned with the WB project development objective to improve the resilience and safety of land and maritime transport infrastructure for users of project roads, bridges and rural jetties and wharves. The project has two outputs: (i) rehabilitated and climate-resilient land and maritime transport infrastructure, and (ii) efficient project management support and institutional strengthening. The executing agency is the Ministry of Finance, and the implementing agency is the FRA. 3. The project is estimated to cost US$166.7 million. The project is financed by: (i) a loan of US$100 million from ADB’s ordinary capital resources, which will finance civil works, consulting services, taxes and duties, contingencies, and financing charges during implementation, (ii) a loan of US$50 million from the International Bank for Reconstruction and Development, which will finance civil works, consulting services, taxes and duties, contingencies, and financing charges during implementation, and (ii) government contribution of $16.7 million, which will finance civil works, consulting services, taxes and duties, salaries, and contingencies. The project was approved on 5 December 2014 by ADB, and on 11 March 2015 by World Bank.

1 The mission comprised D. Ling, Transport Specialist/ADB Mission Leader; J. Reichert, Senior Infrastructure

Specialist/WB Mission Leader; S. Michaels, WB Infrastructure Specialist; C. Nunes, WB Senior Procurement Specialist; O. Whalley, WB Transport Analyst; C. Clark, WB Safeguards Specialist; S. Faletau, WB Coordination Officer; G. King, ADB Senior Finance Officer; and E. Masih, ADB Associate Project Analyst. The Government was represented by senior officials from Ministry of Finance, Ministry of Infrastructure and Transport, and FRA.

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4. The ADB loan and project agreements were signed on 12 December 2014, and the loan was made effective on 27 March 2015. The WB loan agreement was signed on 14 April 2016. The Project Agreement between FRA and WB is also expected to be signed shortly. The WB loan agreements are yet to be made effective pending the following effectiveness conditions: (i) MoF sends WB a copy of the legal opinion, (ii) the subsidiary agreement between MOF and FRA is signed and a copy provided to WB, (iii) the ADB loan agreement is amended to reflect WB financing, and (iv) FRA submits a copy of the revised (to reflect WB requirements under TIISP) Project Administration Manual (PAM) to WB. These conditions of effectiveness will need to be fulfilled within 120 days of signing, or by August 12, 2016.

III. MISSION FINDINGS AND AGREEMENTS REACHED

A. Implementation Status

5. Based on the updated project implementation schedule in the approved PAM dated June 2015 (Annex 2), the project is assessed to be about three months behind schedule. As detailed below, the entire project support team is expected to be permanently staffed by June 2016. Progress on recruiting design and supervision consultants is assessed as on track, on the basis that FRA have utilized their existing professional services to prepare a first phase of subprojects. However, these professional services are scheduled to expire in 2016, and recruitment of design and supervision consultants must commence urgently. The feasibility studies and detailed design of a first phase of subprojects were scheduled to be completed by Q1 2016, but are now expected to be completed by Q2 2016.

B. Project Outputs and Implementation Arrangements

6. Project supervision team. As detailed in the PAM, FRA is required to establish a project supervision team consisting of a project manager/procurement specialist, accountant, environmental safeguards manager, and social safeguards manager. The final job descriptions were agreed between FRA, ADB, and WB on 1 May 2015. The positions were advertised on FRA’s website and national newspapers on 2 May 2015. 7. A project financial management specialist was mobilized on 8 January 2016. However, he tendered his resignation on 29 March 2016. FRA is in the process of recruiting a suitably qualified replacement. The social safeguards specialist and the environment safeguards specialist were both mobilized on 13 January 2016. Both have been performing their functions satisfactorily to date. A permanent project manager/procurement specialist is yet to be appointed, although FRA are currently negotiating an offer with a candidate. This position is expected to be filled by end June 2016. In the meantime, an interim project manager/procurement specialist has been engaged since October 2015.

8. FRA’s Professional Services. During the transition from the former Department of National Roads to FRA, MWH were engaged by the Government to provide professional advisory services covering strategy and planning, asset management, standards, codes, and policies, program planning, and design and supervision. Some of these responsibilities moved to FRA when they were established, while some functions remained with MWH. With MWH’s contract due to expire by end 2016, FRA have recently completed an organizational review to identify which of these responsibilities should be in-house, which should be outsourced, and how to ensure that FRA will have the capacity and capabilities for their responsibilities. The

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review has developed a comprehensive transition plan with a range of institutional strengthening activities which are currently being pursued by FRA.

9. To date, design and supervision services for the project have been mostly provided by MWH, together with other consultants such as Erasito/Beca, and Opus. Outputs for subproject due diligence and detailed design for ADB/WB-financed subprojects have been largely satisfactory to date. FRA will continue to require professional services for design and supervision of civil works for both their full work program, including the proportion financed by ADB and WB beyond 2016, after MWH’s contract expires. There is an urgent need for FRA to commence recruiting professional engineering services contracts immediately, to ensure continuity in the work program currently managed by MWH (New Zealand), and to minimize disruption to the projected work program anticipated in 2017 and thereafter. The best strategy of how the professional engineering services are to be allocated must be agreed. These services should be procured competitively in the open market, with due consideration for cost, quality, and performance management. 10. The project budget and closing date should be carefully considered in the selection of the professional engineering firms. The project budget of US$17.66 million or F$37.57 million equivalent for consulting services needs to be utilized before the project closes. This would allow for professional engineering services contracts of up to 4 years. 11. It is also recognized that the ADB and WB require a rigorous approach to due diligence for economic analysis, environmental safeguards, land acquisition and resettlement, and social and poverty analysis including implementing gender action plans and pro-poor actions. Moreover, the banks’ require monitoring and evaluation of environmental management and social management plans during construction, which requires adequate resources during construction supervision. The banks’ require key expertise in a firm’s technical proposal with demonstrated experience in these areas, and familiarity with the relevant banks’ policies and guidelines. It is preferable by both banks that any civil works to be financed by the project should also be designed and supervised by professional engineering consultants that are financed by them. Such professional services are a necessity, to support FRA’s institutional set up to outsource professional services. In order for ADB and WB to finance these services, selection of consultants must follow the Guidelines on the Use of Consultants by ADB and its Borrowers (2015, as amended from time to time, herein referred to as Consulting Guidelines). 12. In view of FRA’s evolving works program that is finalized through Government’s annual budget, the full scope of a professional engineering services contract cannot be fully defined over a 4 year period. According to the Consulting Guidelines, time-based contracts are used when the scope of services is undefined. Finally, it is recognized that the full needs of FRA’s professional engineering services should not be contracted to a single firm, as has been done previously. Awarding professional engineering services to multiple firms, while more administratively intensive, will enable FRA to manage poorly performing consulting firms by reducing their inputs, and enable FRA to award well performing consulting firms additional work. Diversification will mitigate the risk exposure to a single poorly performing consulting firm. 13. The mission discussed three options in structuring a suitable selection method and form of contract to meet the considerations described in paras. 8-12:

(i) Indefinite Delivery Contracts. The mission shared a draft manual on Indefinite Delivery Contracts from ADB. These contracts allow several firms to be pre-qualified and retained for an extended period, normally three to four years. At this stage, there is no

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guarantee of any income to the pre-qualified firms. When a subproject has been fully scoped and identified (an Indefinite Delivery Contract Assignment (IDCA)), three of the pre-qualified firms are invited to submit a proposal. The successful firm could be contracted on a lump-sum contract for design, and a time-based contract for contract supervision. The selected firm is evaluated on completion of each IDCA. This is FRA’s preferred method to administer design and supervision services. (ii) Time-based Contracts. This is a traditional approach in which a consulting firm(s) is selected upfront over a part of or the full project duration, based on quality and cost. An indicative time requirement for key experts is included in the time-based contract, which is the basis of the maximum budget for the assignment. When a subproject has been fully scoped and identified, the firm is required to submit an approach and methodology time to FRA, detailing time inputs required for both design and supervision. Once the time inputs have been agreed between FRA and the firm, the job is undertaken on the agreed unit rates.

(iii) Output-based Contracts. This approach offers the best value for money, where a consulting firm is required to submit an agreed output at a lump-sum price, with the opportunity to manage its time inputs. In order for this to be an effective form of contract, the full scope of works for design work must be defined upfront, which is not possible as described in para. 12 above. It was noted that this was not a suitable form of contract for construction supervision, given that the duration of supervision is linked to the construction period and is not linked to a set of outputs.

14. The mission informed MOF and FRA that while it noted a desire to consider the use of item (i) above, its use has only been done internally within ADB and not administered on loan-financed projects. Therefore, approval would be needed from ADB’s Operation Services and Financial Management Department on the use of this form of contract. Moreover, the mission noted that the methodology proposed by FRA on the use of Indefinite Delivery Contracts deviated from ADB’s draft IDC Manual. To facilitate a request to use this form of contract, FRA will need to submit a formal request to ADB. 15. Should the use of IDCs not be approved, FRA should be prepared to utilize either option (ii) or (iii) above. Should agreement not be met on any of the above options, the project may require a restructure whereby the government will fully finance its own design and supervision services, and arrange for feasibility studies, detailed design, procurement, and construction supervision to meet ADB and WB requirements, in order for both banks to continue to finance the resulting civil works.

16. It was also noted that construction supervision of civil works financed by ADB and WB will need to continue beyond 31 December 2016, when MWH’s contract expires. FRA will ensure adequate construction supervision arrangements are in place to supervise these civil works and provide ADB and WB with the detailed arrangements by 30 May 2016. A Project Steering Committee will be held in May to discuss the progress on securing professional services and construction supervision arrangements for 2017 and onwards. 17. Procurement Plan. FRA’s draft procurement plan was discussed during the mission. It was noted that the draft procurement plan may be amended from time to time (i.e. the procurement plan is a live document), as the government will be changing its financial year from January – December to August – July from 2016 onwards. Following finalization of the procurement plan, a general procurement notice will be issued. The mission reminded FRA that

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all consulting recruitment notices and invitations for bids must be advertised on ADB’s Business Opportunities website and on appropriate World Bank sites (Client Connection, UNDB, and dgMarket), to ensure bidders from all World Bank member countries are aware of the project’s procurement and consulting opportunities.

18. The mission reviewed subproject status, and a detailed matrix is included in Annex 3. A summary is provided in Table 1 below.

Table 1: Civil Works Contract Packages Subproject Value (F$) Status Expected Award

of Civil Works

Suva Arterial Roads Upgrading (Phase 1)

34,500,000 Safeguards screening reports cleared on 3 February 2016. Feasibility studies for technical and economic analysis, environment, and land acquisition were submitted on 29 February 2016. Comments provided by ADB/WB. FRA resubmitted reports on 17 April 2016. These are being reviewed.

5 Oct 2016

Streetlight Installation (Central, Western Division, Renewals)

7,612,514 Due diligence complete. Bidding complete. The final bid evaluation report was submitted on 5 Feb 2016 and cleared on 18 Feb 2016. Awaiting awards for three contracts.

30 Apr 2016

Matawale Crossing Rehabilitation

2,300,000 Due diligence was completed during loan preparation and has been accepted by ADB and WB. Detailed design was completed by MWH. Bidding has commenced and will close on 26 April 2016.

8 Jul 2016

Reseal and Second Coat Seal – Western, Central, and Northern Divisions

27,200,000 Safeguards screening reports were submitted to ADB and WB on 3 April 2016, and are being reviewed by ADB and WB. Bidding is scheduled to commence on 13 June 2016.

21 Nov 2016

Taveuni Bridges 26,500,000 Safeguards screening reports were submitted

to ADB and WB on 7 April 2016, and are being reviewed. Bidding is scheduled to commence on 23 June 2016.

29 Nov 2016

Solovi 1 and 2 Crossing Rehabilitation

863,000 Beca is undertaking due diligence under ADB TA8514-FIJ. A portion of due diligence has been submitted to FRA for review. Bidding is targeted to commence on 26 May 2016.

14 Sep 2016

Rababa Crossing Rehabilitation

3,450,000 Beca is undertaking due diligence under ADB TA8514-FIJ. A portion of due diligence has been submitted to FRA for review. Bidding is targeted to commence on 16 May 2016.

14 Sep 2016

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Contract Package

Value (F$) Status Expected Award of Civil Works

Ovalau Bridge Rehabilitation

2,500,000 No safeguards screening reports or due diligence received from FRA to date. Bidding scheduled to commence on 16 May 2016. The estimated value may require review.

14 Oct 2016

New Streetlights and Traffic Lights - Villages

$5,550,000 Screening reports were submitted to ADB and WB on 1 April 2016, and are being reviewed. Due diligence documents are being prepared for ADB and WB submission.

28 Aug 2016

New Streetlights (Urban)

3,889,600 Screening reports were submitted to ADB and WB and cleared on 9 March 2016. Due diligence is expected to be submitted by end April 2016. Bidding planned in June 2016.

6 Sep 2016

Traffic Signals (Urban)

4,439,714 As above. 6 Sep 2016

Mass Action Plan (Guard Rails)

1,661,000 As above. 2 Sep 2016

Unsealed Roads – Nakorosule

1,802,740 Safeguards screening reports were submitted to ADB and WB on 7 April 2016, and are being reviewed. Bidding is targeted to commence in June 2016.

15 Sep 2016

Unsealed Roads – Wainiseve - Wainivilimi

$1,900,000 No safeguards screening reports or due diligence received from FRA to date. Bidding scheduled to commence in July 2016.

9 Oct 2016

Unsealed Roads – Naikalawaca

1,746,280 No safeguards screening reports or due diligence received from FRA to date. Bidding scheduled to commence in July 2016.

9 Oct 2016

Unsealed Roads – Kilaka


15 Sep 2016

Unsealed Roads – Sevaci-Korotasere


22 Sep 2016

Unsealed Roads Rehabilitation – Central, Western, Northern Division

16,181,828 No safeguards screening reports or due diligence received from FRA to date. Bidding scheduled to commence in June 2016.

20 Sep 2016

Total 113,261,969

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19. Design and Build packages. FRA has planned a design and build contract packages for award in the second quarter of 2017 for a second phase of upgrading work for Suva Arterial Roads estimated at F$55,000,000. The mission reminded FRA that ADB’s standard bidding documents for design and build need to be followed and prior review of bidding documents and specifications are required by ADB and WB. Moreover, a supervision consultant will need to be selected to supervise the outputs of the design build contractor. MOF has requested that planned design and build contract packages require further discussion at the PSC meeting in May.

C. Safeguards and Social Dimensions

20. The mission noted that safeguards for environment, and land acquisition and resettlement are being complied with to date. FRA is following the approved Environmental and Social Management Framework, and Land Acquisition and Resettlement Framework.

21. The mission reminded FRA that subprojects should be implemented in accordance with the approved Gender Action Plan (GAP). In particular, the mission reminded FRA that sex-disaggregated data should be collected when monitoring benefits of subprojects in order to monitor performance in implementing the GAP. Other gender-sensitive practices should also be mainstreamed in to project implementation as outlined in the GAP such as ensuring participation of both women and men in consultations. Gender sensitization training was provided to FRA and other Government agencies on 9-12 March 2015, although additional workshops on gender mainstreaming can be provided if the need arises.

22. FRA was reminded that that project designs should improve access of transport infrastructure for women as well as vulnerable groups, including the elderly, children, and disabled. Assessment and measures to incorporate such should be incorporated in relevant subproject design documentation.

D. Mission Workshop and Site Visit

21. A workshop was held in Suva on 20 April 2016 to officially launch the project. It was well attended with approximately 20 participants from the MOF, FRA, MOIT, Audit Office, TIISP Project Supervision Team, ADB, and World Bank. The ADB, World Bank, and the TIISP Project Supervision Team delivered presentations associated with the project’s overall objectives, components, implementation arrangements, procurement, financial management, safeguards, and monitoring of performance. The participants discussed a number of issues related to these aspects of the project, as well as on issues associated with road safety and open contracting following topical presentations. The workshop attendance list is included in Annex 4. The presentations made have been shared with the government electronically. 22. The mission conducted a site visit to Ovalau on 21 April 2016. Representatives from MOF, FRA, MOIT, the TIISP Project Supervision Team, ADB, and World Bank participated. The mission carried out site inspections of four bridges to be financed under TIISP, in particular Buinika Bridge, Draiba Bridge, Naikorokoro Bridge, and Levuka Bridge. The proposed replacement bridges typically consist of reinforced concrete hollow core beam decks, with a single traffic lane (plus shoulders) and a footpath provided. This latter feature is commendable for road safety given that pedestrians appeared to be the predominant transport mode on the island. In general the designs were well suited to the context, with features like raised decks,

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piled foundations and approach armoring serving to improve resilience. Detailed observations for each of the bridges to be replaced are provided in Annex 5.

E. Pavement Trial Opportunity

23. An opportunity to become involved with engineering research on pavement design was discussed by the mission. The Pacific Regional Infrastructure Facility (PRIF) has recently completed a report titled ‘Pavement Design Using Local Materials’, with the next stage being a number of field trials to extend and apply the knowledge developed. FRA expressed an interest in becoming involved in these trials, particularly a comparison of basecourse stabilization methodologies, with trial proposals were shared for comment. The mission encouraged FRA to engage with the consultant conducting this work by providing comments on these proposals. This consultant can provide support to refine trials which will help to improve pavement performance in Fiji and across the Pacific.

F. Contract Awards and Disbursements

24. As of 21 April 2016, there have been no contract awards under the project. The first contract awards are expected on 30 April 2016. The only expenditure incurred under the ADB loan to date is the capitalization of interest totalling US$127,251.25 as of 20 April 2016.

G. Disbursement Arrangements

25. The ADB loan will be disbursed in accordance with ADB's Loan Disbursement Handbook (2012, as amended from time to time). The disbursement from the ADB loan proceeds will be in accordance with Schedule 3 of the Loan Agreement. Pursuant to ADB’s Safeguard Policy Statement 2009, ADB funds may not be applied to the activities described in the ADB Prohibited Investment Activities List. Disbursement from ADB loan proceeds will be through direct payment and reimbursement procedures. 26. Three disbursement methods are available for the WB loan, including advance payments, reimbursements, and direct payments. A designated account (DA) for FRA will be established in Fijian Dollars at a bank acceptable to WB and reconciled on a monthly basis. The ceiling of the DA will be FJD 5 million. FRA’s financial management team will be responsible for forecasting project expenditures and submitting withdrawal applications to replenish the DA on a monthly basis.

27. The Ministry of Finance has submitted to ADB specimen signatures of authorized persons who will sign the withdrawal applications on behalf of the Borrower. The Ministry of Finance will be required to submit similar specimen signatures to WB of authorized persons who will sign the withdrawal applications on behalf of the Borrower. The mission advised MOF that since each withdrawal application requires two signatories, additional MOF staff should be authorized to sign on behalf of the Borrower.

H. TA8777-FIJ: Strengthening Transport Sector Coordination

28. The objective of the TA is to strengthen the capacity of MOF, Ministry of Infrastructure and Transport, and FRA staff in overseeing infrastructure projects, and to streamline broader national policy objectives with sector-specific policies and plans. The TA is financed by a $700,000 grant from ADB’s Technical Assistance Special Fund. The scope of the TA has been reconfirmed with MOF and FRA, and consultant selection has commenced.

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I. Reporting, Accounting and Auditing

29. As required by Section 2.08 of the Project Agreement, FRA is required to furnish to ADB periodic reports on the executing of the project including progress made, problems encountered during the period under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following period. The mission provided FRA with a reporting template agreed between ADB and WB. FRA will commence quarterly reporting based on this template for Q2 2016 onwards. A template on reporting requirements was agreed between ADB and WB, and shared with FRA during the mission. The template is attached in Annex 6. 30. FRA are required to maintain separate records and accounts that identify the goods, works, and services financed by the project, the expenditures incurred for the project, and the use of counterpart funds. The project accounts are required to be accrual accounts established and maintained in accordance with sound accounting principles and practices that follow internationally accepted accounting standards, in accordance with Section 2.09 of the Project Agreement. 31. The mission informed FRA that submission of the audited project financial statements and audit report is due six months after the close of each fiscal year. The only expenditure incurred under the loan to date is the capitalization of interest. The government has obtained approval from ADB to waive the requirement of submission of audited project financial statements and the audit report. FRA will still be required to submit to ADB the audited project financial statements from the effectivity date 23 March 2015 to the end of the revised financial year, 31 July 2016 by 31 January 2017.

J. Project Assurances 32. ADB’s approval of the project was based on a number of assurances provided by Ministry of Finance and FRA through the loan and project agreements, to be complied with during project implementation. The list of assurances and their status of compliance are available in Annex 7. The mission noted that assurances are generally being complied with.

IV. CONCLUSION

33. The next joint ADB/WB review mission is expected to be in October 2016. The mission will review progress of activities outlined in this Aide Memoire. The Mission conveys it’s thanks to the Ministry of Finance, Ministry of Infrastructure and Transport, and FRA, for the cooperation, active participation, and strong support provided to the Mission.

David Ling Transport Specialist, Asian Development Bank Jim Reichert Senior Infrastructure Specialist, World Bank

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Attachments: Annex 1 – List of Persons Met Annex 2 – Project Implementation Schedule Annex 3 – Matrix of Subproject Status Annex 4 – Workshop Attendance List Annex 5 – Ovalau Site Visit Report Annex 6 – Quarterly Progress Report Template Annex 7 – List of Assurances

Annex 1

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LIST OF PERSONS MET Ministry of Finance Krishna Prasad Deputy Secretary, Department of Strategic Planning,

National Development & Statistics Isikeli Voceduadua Deputy Secretary, Financial and Asset Management Unit Pankaj Singh Acting Director, Debt and Cashflow Unit Kamal Gounder Principal Economic Planning Officer, Department of

Strategic Planning, National Development & Statistics Tevita Tuicikau Principal Accounts Officer, Debt and Cashflow Unit Davina Whippy Principal Economic Planning Officer, Budget Division Atin Chand Senior Accounts Officer, Debt and Cashflow Unit Vinil Narayan Senior Economic Planning Officer, Department of Strategic

Planning, National Development & Statistics Ministry of Infrastructure and Transport Paul Bayly Permanent Secretary Lui Naisara Deputy Secretary (Transport and Energy) Fiji Roads Authority Rory Garland Acting CEO/Strategy, Planning, and Performance Manager Ian Hunter Capital Works Manager Anne-Marie Bishop Procurement Specialist Abhash Panda Social Safeguards Specialist Nixon Toremana Program Manager (Bridges)

Annex 2

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Project Implementation Plan (June 2015)

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Rehabilitated, climate resilient land and maritime

transport infrastructure

Government approves national transport infrastructure

investment plan

Phase I subproject selection and feasibility studies

Phase I subproject detailed design and bid documents

Bidding of Phase I subprojects

Award and implementation of Phase I subproject

Phase II subproject selection and feasibility studies

Prepare detailed design and bid documents for Phase II

subprojects

Bidding of Phase II subprojects

Award and implementation of Phase II subprojects

Project management support

Recruitment of Project Supervision Team (FRA Staff)

Draft revised design and construction standards

Pilot revised design and construction standards on

selected Phase I subproject

Recruitment of Phase I Design and Supervision

Consultants

Recruitment of Phase II Design and Supervision

Consultants

Management Activities

Establish FRA project supervision team

Implement environmental management plan and

resettlement plan

Inception/Annual/Mid-term reviews

Project completion report

2018 2019 20202017ACTIVITIES

2014 2015 2016

Annex 3

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Matrix of Subproject Status

Annex 4

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List of Workshop Participants

Annex 5

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OVALAU SITE VIST REPORT 1. On April 21, 2016 a team consisting of representatives of the ADB, World Bank, FRA, Ministry of Finance, and Ministry of Infrastructure and Transport undertook a site visit to inspect the bridge works proposed under the project on Ovalau Island. The island is Fiji’s fourth largest by land area with a population of approximately 8,300 and is home to Fiji’s first capital city of Levuka which is listed as a UNESCO World Heritage Site. 2. Arriving at Buresala Wharf on the west coast of Ovalau the team travelled south by bus to Lautoka before returning the same way. Under the project, the replacement of four bridges on the main loop road is proposed. Existing bridges in these locations were observed to be in various states of disrepair, with evidence of recent reinstatement of approaches after the damaging storm surges and stream flows of Cyclone Winston. 3. Proposed replacement bridges typically consist of 7 metre wide reinforced concrete hollow core beam decks, with a single 3.5 metre wide traffic lane (plus shoulders) and a 1.7 metre wide footpath. That latter feature is commendable for road safety given that the predominant transport mode on the island appears to be pedestrian traffic. In general the designs were considered to be well suited to the context, with features like raised decks, piled foundations and approach armoring serving to improve resilience. Observations for each of the bridges to be replaced are provided below: Ovalau Bridges Nabuinika (refer figure 1) 4. The existing bridge consists of a concrete deck on steel beams. There was evidence that this bridge had been overtopped during Cyclone Winston, with the design plan to raise the deck level by 200mm to improve hydraulic capacity. Final specification of levels will be based on a hydraulic study of the catchment which the bridge serves, which is good design practice. There was also evidence of significant scour of the bridge approaches, and the team was informed that rock armor would be applied to both approaches to protect against this. The bridge abutments are in poor condition and will be replaced with piled foundations.

Figure 1 – Existing Nabuinika Bridge

Annex 3

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Naikorokoro 5. This existing bridge consists of a reinforced concrete deck which is supported by temporary props which are heavily corroded. It was understood that this bridge was under capacity for modern traffic loads with advisory signage in place. The proposed replacement will be significantly wider, with the deck also lifted to provide more hydraulic capacity. The existing abutments appeared in satisfactory condition but will be replaced with piled foundations for the new bridge.

Figure 2 – Existing Naikorokoro Bridge Draiba 6. This bridge was a short span, with a dated design consisting of diagonal supports for a central transverse slab beam. This convoluted substructure was clearly the cause of significant blockage by debris, with some of the diagonal members damaged or destroyed, presumably by logs which had passed through. The proposed replacement consists of a clear span more than double the exiting length, with the additional hydraulic capacity a good design decision. One concern was that the channel undertook a sharp bend downstream of the crossing, and extensive armoring will be required to protect an adjacent house from being undermined by scour.

Annex 3

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Figure 3 – Existing Draiba Bridge Levuka 7. This bridge is a two span reinforced concrete structure, with the design proposing to remove the central pier for a single clear span. The beams of this bridge were in very poor condition, with extensive spalling as a result of corroded reinforcement. The design proposes to retain existing abutments which are in good condition but install new piles behind these. The width of the carriageway will be maintained with a new footpath added.

Figure 4 – Spalling and exposed reinforcement of existing Levuka Bridge

Annex 3

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Other Observations Road Network 8. Traffic observed on the Ovalau loop road was very limited, and mostly consisted of taxis and public buses/PMVs. The network was mostly unsealed, with sealed sections in built up areas. These sealed sections appeared to be in good condition, with the unsealed sections ranging in condition from good to poor. Coastal Protection 9. One pressing need identified during the visit was for coastal protection, with evidence of erosion and many locations along the road, as well as failure of the upstand wall at Levuka Town. The needs for this coastal protection are significant and any further development should carefully consider how investments can be protected from this coastal erosion hazard.

Figure 5 – Failed upstand wall at Levuka Town

Annex 6

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FIJI: Transport Infrastructure (Sector) Investment Project

Asian Development Bank Project Number: 48141 World Bank Project Number: P150028

DRAFT Template for Quarterly Progress Reporting

Executive Summary [summarize progress and key issues]

1 Introduction and Basic Data

1.1 Total estimated project cost and financing plan 1.2 Status of project financing including availability of counterpart funds and loan

financing from ADB and WB 1.3 Dates of approval, signing, effectiveness of ADB/WB loans 1.4 Original and revised (if applicable) ADB and WB loan closing dates and elapsed

loan period based on original and revised (if applicable) loan closing dates 1.5 Date of last ADB and/or WB review mission

2 Implementation Progress 2.1 Overall implementation status

– Project implementation arrangements – establishment, staffing, and financing of the project supervision team. Recruitment of design and supervision consultants

– Information relating to other aspects of the EA and IA internal operations that may impact on the implementation arrangements or project progress

2.2 – Progress and achievements in implementation since the last progress report. Implementation status by component and contract [for project components, detail progress and challenges (technical, contractual, financial, delays, etc.); for each contract signed (works, services, goods), describe latest progress/deliverables, works/services completed, payments made, and estimated time remaining to complete each activity - provide graph of disbursements/payments per contract.]

2.3 Updated implementation plan and key milestones - Assessment of progress in implementing the overall project to date in

comparison with the original implementation schedule – quantifiable and monitorable targets (including simple charts such as bar or milestone to illustrate progress, a chart showing actual versus planned expenditure, S-curve graph showing the relationship between physical and financial performance, and actual progress in comparison with the original schedules and budgets)

Annex 6

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3 Project Scope, Project Development Objectives (PDO) and Results Indicators 3.1 Status of project scope/implementation arrangements compared with

those in the report and recommendation of the President (RRP)/Project Appraisal Document (PAD), and whether major changes have occurred or will need to be made

3.2 Assessment of progress in meeting PDO – likelihood that the Project Outcome/PDO will be met in part or in full, and whether remedial measures are required based on the current project scope and implementation arrangements

3.3 Results Indicators [update Results Indicators table in Annex 1]

3.4 Key issues and challenges in meeting indicator targets – assessment of the key assumptions and risks and their validity that affect attainment of the development objectives

4 Procurement

4.1 Status of procurement and cumulative contract awards [summarize procurement progress, including contracts signed to date, and contracts submitted to ADB for review/under revision, and update table in Annex 2]

4.2 Updated procurement plan 4.3 Key issues and challenges

5 Financial Management and Disbursement

5.1 Financial management update [document delivery of Interim Financial Reports, audits, adequacy and timeliness of counterpart funding, etc] Cumulative disbursements and forecast [detail total disbursements from ADB and WB loans and compare with originals forecasts, number and amount of withdrawal applications, forecast disbursements by quarter to project close, etc. - provide details in Annex 3]

5.2 Re-estimated costs to completion, need for reallocation with project cost categories, and whether an overall project cost overrun is likely

5.3 Updated IFRs (semi-annually) [update table in Annex 4]

1.1 Key issues and challenges 2 Environmental Safeguards

2.1 Summary of implementation status [describe compliance with requirements as defined in the safeguards documents, ESMF, ESMP, etc]

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2.2 Key issues and challenges [describe by component and contract, and identify any emerging issues]

3 Social Safeguards

3.1 Summary of implementation status [describe compliance with requirements as defined in the safeguards documents, LARF, LARP, etc]

3.2 Key issues and challenges [describe by component and contract, and identify any emerging issues]

4 Institutional Arrangements

4.1 Adequacy of Arrangements [describe sub-projects selected and rationale for selection, PSC meetings, etc.]

4.2 Key issues and challenges 5 Legal Covenants

5.1 Status of compliance with all project legal covenants (financial laon covenants including financial management, and the provision of audited project accounts or audited agency financial statements, the borrowers and EA’s compliance with project-specific loan covenants associated with implementation, environment, and social dimensions) [include table]

6 Major Project Issues and Problems Summarize the major problems and issues affecting or likely to affect

implementation progress, compliance with covenants, and achievement of immediate development objectives. Recommend actions to overcome these problems and issues (eg. Changes in scope and/or implementation arrangements/project restructure, and reallocation of loan proceeds)

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Annex 1: Results Framework Target values below are based on the World Bank’s Project Appraisal Document (PAD); Other ADB indicators to be added. Project Development Indicator: Improved safety and resilience of land and maritime transport infrastructure [for users of project roads, bridges and rural jetties and wharves.

Project Development Objective Indicators

Cumulative Values

Indicator Name Unit of

Measure YR1 YR2 YR3 YR4 YR5

Frequency of

Measurement

Data Source /

Methodology

Responsibility for Data

Collection

Length of FRA roads rehabilitated to revised standards for safety & resilience.

KM

Target:

Design standards revised.

25 50 75 100 Quarterly

PST & Consultant

Reports FRA

Actual:

Length of roads with minimum 3-Star rating for vehicle occupants based on iRAP assessments.

KM

Target:

25 35 45 55 65 Quarterly

FRA GIS Database

FRA

Actual:

Population at risk of bridge failure. #

Target:

0 55,000 110,000 165,000 250,000 Quarterly

PST & Consultant

Reports FRA

Actual:

Rural jetties/wharves requiring high priority attention.

Target:

35 33 32 30 29 Quarterly

PST & Consultant

Reports FRA

Actual:

.

Intermediate Results Indicators

Cumulative Values

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Indicator Name Unit of

Measure YR1 YR2 YR3 YR4 YR5

Frequency of

Measurement

Data Source /

Methodology

Responsibility for Data

Collection

Rural roads rehabilitated. KM

Target:

0 25 55 80 90 Quarterly

PST & Consultant

Reports FRA

Actual:

Bridges tendered. #

Target:

10 20 30 45 45 Quarterly

PST & Consultant

Reports FRA

Actual:

Jetties/wharves tendered. #

Target:

2 3 5 6 6 Quarterly

PST & Consultant

Reports FRA

Actual:

Street lights reinstated and/or installed new.

#

Target:

1,500 2,000 2,500 4,000 5,000 Quarterly

PST & Consultant

Reports FRA

Actual:

Community assets constructed that benefit women.

#

Target:

5 15 30 45 55 Quarterly

PST & Consultant

Reports FRA

Actual:

Project designs consider gender issues.

%

Target:

100 100 100 100 100 Quarterly

PST & Consultant

Reports FRA

Actual:

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Design Summary Performance Targets and Indicators with Baselines

Data Sources and Reporting Mechanisms

Assumptions and Risks

Outcome Assumptions Improved safety and resilience of land and maritime transport infrastructure [for users of project roads, bridges, and rural jetties and wharves[

By 2020: Government remains committed to implement public sector investment program, updated 20 year National Transport Infrastructure Plan Revised design and construction standards are completed on time Risks Government budget allocations for investment, maintenance, and service delivery do not meet needs identified in sector plans

Number of bridges requiring high priority attention

a reduced by 30%

(2014 Baseline: 100) Number of jetties requiring high priority attention

a

reduced by 20% (2014 Baseline: 20) At least 2 subproject designs are informed by revised standards with climate resilience and safety considerations (2014 Baseline: 0)

Project quarterly progress and completion reports

Outputs Assumptions 1. Rehabilitated and

climate resilient land and maritime transport infrastructure

By 2020 100 km of main, municipal, and rural roads rehabilitated to revised standards 40 km of roads with minimum 3-Star rating for vehicle occupants based on iRAP assessments 30 bridges rehabilitated or reconstructed with gender-sensitive designs that improve all weather pedestrian access to waterways 6 rural jetties rehabilitated or reconstructed

Project quarterly progress and completion reports FRA Annual Reports FRA Asset Management System

Adequate counterpart and development partner financing is available

Assumptions

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Design Summary Performance Targets and Indicators with Baselines

Data Sources and Reporting Mechanisms

Assumptions and Risks

2. Efficient project management support and institutional strengthening

By 2020 (Baseline Year: 2015): Project meets annual contract award targets Project meets annual disbursement targets Design and construction standards revised to incorporate climate change adaptation considerations, and to reflect current international standards for road geometry, pavement, drainage, and associated structures (2015 Baseline: None)

MOF budget and expenditure FRA annual reports Project progress and completion reports Updated FRA Asset Management System

Institutional organizational of government transport agencies remains consistent Sufficient capacity of government to recruit consultants on time and manage them effectively

Activities with Milestones

Inputs:

Activities with Milestones (Overall Project)b

1. Rehabilitated and climate resilient land and maritime transport infrastructure

1.1 Government approves rolling work program and priority subproject list for non-core subprojects (Q1-Q2 2015) (unchanged)

1.2 Phase I subproject selection and feasibility studies (Q3 2015-Q1 2016) (unchanged)

1.3 Phase I subproject detailed design and bidding documents (Q2-Q4 2016) (unchanged)

1.4 Bidding of Phase I subprojects (Q1-Q2 2017) (unchanged)

1.5 Award and implementation of Phase I subproject (Q3 2017-Q4 2018) (unchanged)

1.6 Phase II subproject selection and feasibility studies (Q2-Q4 2016) (unchanged)

1.7 Prepare detailed design and bidding documents for Phase II subprojects (Q1-Q3 2017) (unchanged)

1.8 Bidding of Phase II subprojects (Q4 2017-Q1 2018) (unchanged)

1.9 Award and implementation of Phase II subprojects (Q2 2018-Q1 2020) (unchanged)

2. Project management support 2.1 Recruitment of Project Supervision Team staff

(Q4 2014-Q2 2015) (changed) 2.2 Draft revised design and construction

standards (Q3 2015-Q3 2016) (unchanged) 2.3 Pilot revised design and construction

standards on selected Phase I subproject (Q3 2016-Q1 2017) (unchanged)

ADB Loan: $100.00 million (current) $0.00 million (additional) $100.00 million (overall) Government: $11.11 million (current) $5.56 million (additional) $16.67 million (overall) Technical Assistance Grant: $0.70 million (current) $0.00 million (additional) $0.70 million (current) World Bank Loan: $0.00 million (current) $50.00 million (additional) $50.00 million (overall)

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Activities with Milestones

Inputs:

2.4 Recruitment of Phase I Design and Supervision Consultants (Q2 2015-Q4 2015) (changed)

2.5 Recruitment of Phase II Design and Supervision Consultants (Q3 2016-Q1 2017) (changed) a

High priority refers to FRA’s prioritization rating for a bridge or jetty’s condition that may include deficiencies in its serviceability which may include but are not limited to its structural integrity, vulnerability to adverse weather events, and/or lack of safety furniture.

ADB = Asian Development Bank, FRA = Fiji Roads Authority, MOF = Ministry of Finance, OCR = ordinary capital resources. Source: Asian Development Bank estimates.

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Annex 2: Procurement Status (All Contracts) Signed contracts

Contract No.

Contract Name

Description

Est. Cost (US$ mil.)

Signed Value (US$

mil.)

Procurement Method

Review by ADB

(Prior/Post)

Expected Bid-Opening

Date

Signing Date

Completion

Expected contracts

Contract No.

Contract Name

Description

Est. Cost (US$ mil.)

Signed Value (US$

mil.)

Procurement Method

Review by ADB

(Prior/Post)

Expected Bid-Opening

Date

Signing Date

Completion

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Annex 3: Disbursement History and Forecast (by quarter)

To be provided by FRA.

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Annex 4: IFRs The draft IFR on the following page is an attempt to devise a single document that harmonizes ADB and WB reporting requirements. The minimum information needed includes:

spending by semester, year to date, and project to date;

opening cash balances;

sources of funds;

uses of funds;

closing cash balances;

outstanding commitments; and

total budget.

This sample IFR, which is available as an Excel spreadsheet, can be modified to match outputs from FRA’s accounting system. Also, ADB will need to review and might want additional information. Changes to be agreed with WB and ADB. Note that IFRs are only required semi-annually.

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31

LOAN ASSURANCES

Assurance Reference in Loan

Agreement

Status of Compliance

(a) The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound applicable technical, financial, business, and development practices. (b) In the carrying out of the Project and operation of the Project facilities, the Borrower shall perform, or cause to be performed, all obligations set forth in Schedule 5 to this Loan Agreement and the Project Agreement.

Section 4.01 Complied

The Borrower shall make available, or cause to be made available, promptly as needed, the funds, facilities, services, land and other resources, as required, in addition to the proceeds of the Loan, for the carrying out of the Project.


The Borrower shall ensure that the activities of its departments and agencies with respect to the carrying out of the Project and operation of the Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures.


The Borrower shall enable ADB's representatives to inspect the Project, the Goods and Works, and any relevant records and documents.


ADB shall disclose the annual audited financial statements for the Project and the opinion of the auditors on the financial statements within 30 days of the date of their receipt by posting them on ADB’s website.

Section 4.05 Not yet due

The Borrower shall take all actions which shall be necessary on its part to enable FRA to perform its obligations under the Project Agreement, and shall not take or permit any action which would interfere with the performance of such obligations.


(a) The Borrower shall exercise its rights under the Financing Arrangement in such a manner as to protect the interests of the Borrower and ADB and to accomplish the purposes of the Loan. (b) No rights or obligations under the Financing Arrangement shall be assigned, amended, abrogated or waived without the prior concurrence of ADB.


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Implementation Arrangements 1. The Borrower and the FRA shall ensure that the Project is implemented in accordance with the detailed arrangements set forth in the PAM. Any subsequent change to the PAM shall become effective only after approval of such change by the Borrower and ADB. In the event of any discrepancy between the PAM and this Loan Agreement, the provisions of this Loan Agreement shall prevail. 2. The Borrower shall ensure, or cause the FRA to ensure, that the project supervision team, established as part of the FRA, is provided with such staff and resources as necessary for the efficient implementation of the Project. 3. The Borrower and the FRA shall ensure that to the extent possible under the prevailing laws of the Borrower, the staff members who will receive training under the Project will be retained in their current positions and will not be transferred unnecessarily, so that the Project can benefit from their skills.

Schedule 5 Complied Partly complied. Not yet due

Coordination among the Agencies 4. The Borrower is fully committed to the Project and shall ensure that all ministries, agencies and divisions involved in the implementation of the Project, including local government authorities, give their full cooperation to ensure smooth implementation of the Project.

Schedule 5 Complied

Counterpart Funds 5. The Borrower shall: (a) ensure sufficient counterpart funds from its budget for each fiscal year, in a timely manner, for the efficient implementation of the Project; and (b) ensure adequate funds towards operations and maintenance of Project facilities, through budgetary allocations or other means, during and after the Project’s completion. 6. The Borrower shall provide, or cause the FRA to provide, as necessary, respective counterpart staff, land, facilities, and funding required for timely and effective implementation of the Project, including, without limitation, any funds required (a) to fund operation and maintenance of Project facilities, (b) to mitigate unforeseen environmental or social impacts, and (c) to meet any additional costs arising from design changes, price escalation in construction costs and/or unforeseen circumstances. The Borrower shall cause the FRA to make the resources thus required available on an annual basis for each fiscal year.

Schedule 5 Not yet due Not yet due Complied

Resources 7. The Borrower shall ensure that FRA shall be provided with adequate staff, resources, and facilities to implement the Project.

Schedule 5 Complied

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Selection Criteria and Approval Process for Subprojects 8. Feasibility studies prepared for proposed Subprojects shall be endorsed by the EA prior to submission to ADB for approval. The Borrower shall periodically submit for ADB’s approval a list of roads, bridges and/or rural jetties it wishes to propose for Subprojects. The list shall be accompanied by an endorsed feasibility study for each proposed Subproject. The Borrower shall ensure that the feasibility studies are prepared with sufficient detail for ADB to assess whether the proposed Subprojects meet the criteria set forth in the PAM, and are otherwise suitable and viable. 9. The Borrower shall ensure that all documents forming the basis for screening, selection and processing of Subprojects are made available to ADB upon request and are kept available for such purposes for a minimum period of five years from the date of the project completion report for the Project.

Schedule 5 Complied Complied

Project Website 10. Within 12 months after the Effective Date, the Borrower shall ensure, or cause the FRA to ensure, that a Project website is created to disclose information about various matters in regards to the Project, including procurement. With regard to procurement, the website shall disclose the following information in relation to goods and services procured for the Project: (a) the list of participating bidders; (b) the name of the winning bidder; (c) basic details on bidding procedures adopted; (d) the amount of contract awarded; and (e) the list of goods/services procured. The Project website need not be separate from an existing website of the FRA, as long as it is comprehensive and easily accessible by the public.

Schedule 5 Complied. FRA website provides procurement information.

Grievance Redress Mechanism 11. Within 12 months after the Effective Date, the Borrower shall ensure that FRA prepare a grievance redress mechanism, acceptable to ADB, and establish a special committee to receive and resolve complaints/grievances or act upon reports from stakeholders on misuse of funds and other irregularities, including grievances due to resettlement. The special committee shall (a) make the public aware of the existence of this grievance redress mechanism; (b) receive, review and address complaints/grievances of stakeholders of the Project, in relation to the Project, any of the service providers, or any person responsible for carrying out any aspect of the Project; and (c) proactively and constructively respond to them.

Schedule 5 Complied. FRA has a complaints registry on its website.

Environment 12. The Borrower shall ensure that the preparation, design, construction, implementation, operation and decommissioning of each Subproject, and all Project facilities comply with (a) all applicable laws and regulations of the Borrower relating to environment, health, and safety; (b) the Environmental Safeguards; (c) the ESMF; and (d) all measures and requirements set forth in the EIA and EMP, and any corrective or preventative actions set forth in a Safeguards Monitoring Report.

Schedule 5 Complied

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Land Acquisition and Involuntary Resettlement 13. The Borrower shall ensure that FRA make all land and all rights-of-way required for each Subproject available to the Works contractor in accordance with the schedule agreed under the related Works contract, and all land acquisition and resettlement activities are implemented in compliance with (a) all applicable laws and regulations of the Borrower relating to land acquisition and involuntary resettlement; (b) the Involuntary Resettlement Safeguards; (c) the LARF; and (d) all measures and requirements set forth in the relevant LARP, and any corrective or preventative actions set forth in a

Schedule 5 Complied

Safeguards Monitoring Report. 14. Without limiting the application of the Involuntary Resettlement Safeguards, the LARF or the relevant LARP, the Borrower shall ensure, or cause the FRA to ensure, that no physical or economic displacement takes place in connection with the Subprojects until: (a) compensation and other entitlements have been provided to affected people in accordance with the relevant LARP; and (b) a comprehensive income and livelihood restoration program has been established in accordance with the relevant LARP.

Schedule 5 Not yet due. Not yet due.

Indigenous Peoples 15. The Borrower shall ensure that the Project does not have any impact on indigenous peoples within the meaning of the SPS. In the event that the Project does have any such impact, the Borrower shall ensure, or cause the FRA to ensure, that the preparation, design, construction, implementation and operation of the relevant Subprojects comply with (a) all applicable laws and regulations of the Borrower relating to indigenous peoples; (b) the Indigenous Peoples Safeguards; and (c) any corrective or preventative actions set forth in a Safeguards Monitoring Report.

Schedule 5 Complied

Human and Financial Resources to Implement Safeguards Requirements 16. The Borrower shall make available, or cause the FRA to make available, all necessary budgetary and human resources to fully implement the EMP and the LARP as required.

Schedule 5 Complied

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Safeguards-Related Provisions in Bidding Documents and Works Contracts 17. The Borrower shall ensure, or cause the FRA to ensure, that all bidding documents and contracts for Works contain provisions that require contractors to: (a) comply with the measures and requirements relevant to the contractor set forth in the relevant EIA, EMP, LARP, any conditions attached to the approval issued by the Department of Environment of the Borrower, and any corrective or preventative actions set forth in a Safeguards Monitoring Report; (b) make available a budget for all such environmental and social measures; (c) provide the EA with a written notice of any unanticipated environmental, resettlement or indigenous peoples risks or impacts that arise during construction, implementation or operation of the Project that were not considered in the relevant EIA, EMP, or LARP; (d) adequately record the condition of roads, agricultural land the other infrastructure prior to starting to transport materials and construction; and (e) fully reinstate pathways, other local infrastructure, and agricultural land to at least their pre-project condition upon the completion of construction.

Schedule 5 Complied Complied Complied Complied Complied

Safeguards Monitoring and Reporting 18. The Borrower shall do, or cause the FRA to do, the following: (a) submit semi-annual Safeguards Monitoring Reports to ADB, and disclose relevant information from such reports to affected persons promptly upon submission; (b) if any unanticipated environmental and/or social risks and impacts arise during construction, implementation or operation of the Project that were not considered in the relevant EIA, EMP, or LARP, as applicable, promptly inform ADB of the occurrence of such risks or impacts, with detailed description of the event and proposed corrective action plan; and (c) report any breach of compliance with the measures and requirements set forth in the relevant EIA, EMP, or LARP promptly after becoming aware of the breach.

Schedule 5 Complied Complied Complied

Prohibited List of Investments 19. The Borrower shall ensure, or cause the FRA to ensure, that no proceeds of the Loan under the Project are used to finance any activity included in the list of prohibited investment activities provided in Appendix 5 of the SPS.

Schedule 5 Complied

Gender 20. The Borrower shall ensure that (a) the GAP is implemented in accordance with its terms; (b) the bidding documents and contracts include relevant provisions for contractors to comply with the measures set forth in the GAP; (c) adequate resources are allocated for implementation of the GAP; and (d) progress on implementation of the GAP, including progress toward achieving key gender outcome and output targets, are regularly monitored and reported to ADB.

Schedule 5 Complied

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Other Social Measures 21. The FRA shall ensure that all civil works contracts under the Project follow all applicable labor laws of the Borrower, and that these further include provisions to the effect that contractors: (a) carry out HIV/AIDS awareness programs for labor and disseminate information at worksites on risks of sexually transmitted diseases and HIV/AIDS as part of health and safety measures for those employed during construction; and (b) follow and implement all statutory provisions on labor (including not employing or using children as labor, and equal pay for equal work), health, safety, welfare, sanitation, and working conditions. Such contracts shall also include clauses for termination in case of any breach of the stated provisions by the contractors.

Schedule 5 Complied

Procurement 22. The EA and the FRA shall ensure that the anticorruption provisions acceptable to ADB and the Borrower are included in all bidding documents and contracts financed by ADB in connection with the Project, including provisions specifying the right of ADB to review and examine the records and accounts of the EA, the FRA, and all contractors, suppliers, consultants, and other service providers as they relate to the projects. The Borrower and the FRA shall allow and assist ADB’s representatives to carry out random spot checks on the work in progress and utilization of funds for the Project.

Schedule 5 Complied

Reform Measure 23. By June 2015, the Borrower shall have endorsed the updated National Transport Investment Plan and the updated Land Transport Policy and Maritime Transport Policy.

Schedule 5 Partly complied.

Governance and Anticorruption 24. The Borrower and the FRA shall (a) comply with ADB’s Anticorruption Policy (1998, as amended to date) and acknowledge that ADB reserves the right to investigate directly or through its agents, any alleged corrupt, fraudulent, collusive or coercive practice relating to the Project; and (b) cooperate with any such investigation and extend all necessary assistance for satisfactory completion of such investigation, and as included in detail in the PAM. 25. The Borrower and the FRA shall (a) ensure that the anticorruption provisions acceptable to ADB and the Borrower are included in all bidding documents and contracts financed by ADB in connection with the Project, including provisions specifying the right of ADB to review and examine the records and accounts of the FRA, and all contractors, suppliers, consultants, and other service providers as they relate to the Project and as included in detail in the PAM, and (b) allow and assist ADB’s representatives to carry out random spot checks on the work in progress and utilization of funds for the Project.

Schedule 5 Complied Complied

Operation and Maintenance 26. The Borrower shall allocate and make available, on a timely basis, sufficient funds for the operation and maintenance of the Project facilities, and shall ensure that the Project facilities are adequately maintained in accordance with the applicable standards and best international practices.

Schedule 5 Not yet due

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Review 27. (a) ADB, the Borrower, and the FRA shall meet regularly as required to discuss the progress of the Project and any changes in the implementation arrangements or remedial measure required to be taken to achieve the objectives of the Project. (b) ADB, the Borrower, and the FRA shall undertake a mid-term review of the Project, around 2 years from the Effective Date, which shall include review of issues and any problems and/or weaknesses in implementation arrangements and shall agree on any changes needed to achieve the objectives of the Project.

Schedule 5 Complied Not yet due

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PROJECT ASSURANCES

Assurance Reference in

Project Agreement

Status of Compliance

(a) FRA shall carry out the Project with due diligence and efficiency, and in conformity with sound applicable technical, financial, business, and development practices. (b) In the carrying out of the Project and operation of the Project facilities, FRA shall perform all obligations set forth in the Loan Agreement to the extent that they are applicable to FRA.

Section 2.01.

Complied Complied

FRA shall make available, promptly as needed, the funds, facilities, services, equipment and other resources as required, in addition to the proceeds of the Loan, for the carrying out of the Project.


(a) In the carrying out of the Project, FRA shall employ competent and qualified consultants and contractors, acceptable to ADB, to an extent and upon terms and conditions satisfactory to ADB. (b) Except as ADB may otherwise agree, FRA shall procure all items of expenditures to be financed out of the proceeds of the Loan in accordance with the provisions of Schedule 4 to the Loan Agreement. ADB may refuse to finance a contract where any such item has not been procured under procedures substantially in accordance with those agreed between the Recipient and ADB or where the terms and conditions of the contract are not satisfactory to ADB.

Section 2.03.

Complied Complied

FRA shall carry out the Project in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to ADB. FRA shall furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as ADB shall reasonably request.

Section 2.04. Complied

(a) FRA shall take out and maintain with responsible insurers, or make other arrangements satisfactory to ADB for, insurance against such risks and in such amounts as shall be consistent with sound practice. (b) Without limiting the generality of the foregoing, FRA undertakes to insure, or cause to be insured, the Goods to be imported for the Project against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such Goods.

Section 2.05. Complied Complied

FRA shall maintain, or cause to be maintained, records and accounts adequate to identify the items of expenditure financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project and to reflect, in accordance with consistently maintained sound accounting principles, its operations and financial condition.


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(a) ADB and FRA shall cooperate fully to ensure that the purposes of the Loan will be accomplished. (b) FRA shall promptly inform ADB of any condition which interferes with, or threatens to interfere with, the progress of the Project, the performance of its obligations under this Project Agreement, or the accomplishment of the purposes of the Loan. (c) ADB and FRA shall from time to time, at the request of either party, exchange views through their representatives with regard to any matters relating to the Project, FRA and the Loan.

Section 2.07. Complied Complied Complied

(a) FRA shall furnish to ADB all such reports and information as ADB shall reasonably request concerning (i) the Loan and the expenditure of the proceeds thereof; (ii) the items of expenditure financed out of such proceeds; (iii) the Project; (iv) the administration, operations and financial condition of FRA; and (v) any other matters relating to the purposes of the Loan. (b) Without limiting the generality of the foregoing, FRA shall furnish to ADB periodic reports on the execution of the Project and on the operation and management of the Project facilities. Such reports shall be submitted in such form and in such detail and within such a period as ADB shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the period under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following period. (c) Promptly after physical completion of the Project, but in any event not later than 3 months thereafter or such later date as ADB may agree for this purpose, FRA shall prepare and furnish to ADB a report, in such form and in such detail as ADB shall reasonably request, on the execution and initial operation of the Project, including its cost, the performance by FRA of its obligations under this Project Agreement and the accomplishment of the purposes of the Loan.

Section 2.08. Complied Complied Not yet due

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(a) FRA shall (i) maintain separate accounts and records for the Project; (ii) prepare annual financial statements for the Project in accordance with accounting principles acceptable to ADB; (iii) have such financial statements for the Project audited annually by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB, in accordance with international standards for auditing or the national equivalent acceptable to ADB; (iv) as part of each such audit, have the auditors prepare a report (which includes the auditors’ opinion on the financial statements, use of the Loan proceeds and compliance with the financial covenants of the Loan Agreement) and a management letter (which sets out the deficiencies in the internal control of the Project that were identified in the course of the audit, if any); and (v) furnish to ADB, no later than 6 months after the close of the fiscal year to which they relate, copies of such audited financial statements, audit report and management letter, all in the English language, and such other information concerning these documents and the audit thereof as ADB shall from time to time reasonably request. (b) ADB shall disclose the annual audited financial statements for the Project and the opinion of the auditors on the financial statements within 30 days of the date of their receipt by posting them on ADB’s website. (c) In addition to annual audited financial statements referred to in subsection (a) hereinabove, FRA shall (i) provide its annual financial statements prepared in accordance with national accrual-based financing reporting standards acceptable to ADB; (ii) have its financial statements audited annually by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB, in accordance with international standards for auditing or the national equivalent acceptable to ADB; and (iii) furnish to ADB, no later than 1 month after approval by the relevant authority, copies of such audited financial statements in the English language and such other information concerning these documents and the audit thereof as ADB shall from time to time reasonably request. (d) FRA shall enable ADB, upon ADB's request, to discuss FRA’s financial statements and its financial affairs where they relate to the Project with the auditors appointed by FRA pursuant to subsections (a)(iii) and (c) hereinabove, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB. This is provided that such discussions shall be conducted only in the presence of an authorized officer of FRA, unless FRA shall otherwise agree.

Section 2.09. Complied Not yet due Not yet due Complied

FRA shall enable ADB's representatives to inspect the Project, the Goods and any relevant records and documents.


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(a) FRA shall, promptly as required, take all action within its powers to maintain its corporate existence, to carry on its operations, and to acquire, maintain and renew all rights, properties, powers, privileges and franchises which are necessary in the carrying out of the Project or in the conduct of its operations. (b) FRA shall at all times conduct its operations in accordance with sound applicable technical, financial, business, development and operational practices, and under the supervision of competent and experienced management and personnel. (c) FRA shall at all times operate and maintain its plants, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound applicable technical, financial, business, development, operational and maintenance practices.

Section 2.11. Complied Complied Complied

Except as ADB may otherwise agree, FRA shall not sell, lease or otherwise dispose of any of its assets which shall be required for the efficient carrying on of its operations or the disposal of which may prejudice its ability to perform satisfactorily any of its obligations under this Project Agreement.


Except as ADB may otherwise agree, FRA shall apply the proceeds of the Loan to the financing of expenditures on the Project in accordance with the provisions of the Loan Agreement and this Project Agreement, and shall ensure that all items of expenditures financed out of such proceeds are used exclusively in the carrying out of the Project.


Except as ADB may otherwise agree, FRA shall duly perform all its obligations under the Financing Arrangement, and shall not take, or concur in, any action which would have the effect of assigning, amending, abrogating or waiving any rights or obligations of the parties under the Financing Arrangement.


FRA shall promptly notify ADB of any proposal to amend, suspend or repeal any provision of its constitutional documents, which, if implemented, could adversely affect the carrying out of the Project or the operation of the Project facilities. FRA shall afford ADB an adequate opportunity to comment on such proposal prior to taking any affirmative action thereon.


AIDE MEMOIRE ADB Loan 3210-FIJ: Transport Infrastructure ... · selection of consultants must...

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