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Port Moresby Power Grid Development Project (RRP PNG 43197)
Project Number: 43197 April 2013
Papua New Guinea: Port Moresby Power Grid Development Project
Project Administration Manual
Contents
ABBREVIATIONS 5
I. PROJECT DESCRIPTION 1
II. IMPLEMENTATION PLANS 3
A. Project Readiness Activities 3 B. Overall Project Implementation Plan 4
III. PROJECT MANAGEMENT ARRANGEMENTS 5
A. Project Implementation Organizations – Roles and Responsibilities 5 B. Key Persons Involved in Implementation 6 C. Project Organization Structure 6
IV. COSTS AND FINANCING 7
A. Detailed Cost Estimates by Expenditure Category 8 B. Allocation and Withdrawal of Loan Proceeds 9 C. Detailed Cost Estimates by Financier 10 D. Detailed Cost Estimates by Outputs/Components 11 E. Detailed Cost Estimates by Year 12 F. Contract and Disbursement S-curve 13 G. Fund Flow Diagram 13
V. FINANCIAL MANAGEMENT 14
A. Financial Management Assessment 14 B. Disbursement 15 C. Accounting 16 D. Auditing 16
VI. PROCUREMENT AND CONSULTING SERVICES 17
A. Advance Contracting and Retroactive Financing 17 B. Procurement of Goods, Works and Consulting Services 17 C. Procurement Plan 18 D. Consultant's Terms of Reference 23
VII. SAFEGUARDS 28
VIII. SOCIAL SAFEGUARDS DUE DILIGENCE EXISTING FACILITIES 29
IX. DUE DILIGENCE/SOCIAL COMPLIANCE AUDIT OF EXISTING FACILITIES 29
A. Rouna 1 Hydropower Plant 30 B. Sirinumu Toe-of-dam Hydropower 32 C. Existing Transmission Line from Rouna 33 D. Consultations, Disclosure and Grievance Redress 34 E. Action Plan: Community Development Package 34
X. GENDER AND SOCIAL DIMENSIONS 35
XI. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 38
A. Project Design and Monitoring Framework 38 B. Monitoring 40 C. Evaluation 41 D. Reporting 41
E. Stakeholder Communication Strategy 41
XII. ANTICORRUPTION POLICY 47
XIII. ACCOUNTABILITY MECHANISM 48
XIV. RECORD OF PAM CHANGES 48
Project Administration Manual Purpose and Process
1. The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM.
2. The Independent Public Business Corporation (IPBC) and PNG Power Ltd. (PPL) are wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with Government and ADB’s policies and procedures. ADB staff is responsible to support implementation including compliance by IPBC and PPL of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.
3. At Loan Negotiations, the borrower and ADB shall agree to the PAM and ensure consistency with the Loan agreement. Such agreement shall be reflected in the minutes of the Loan Negotiations. In the event of any discrepancy or contradiction between the PAM and the Loan Agreement, the provisions of the Loan Agreement shall prevail.
4. After ADB Board approval of the project's report and recommendation of the President (RRP) changes in
implementation arrangements are subject to agreement and approval pursuant to relevant Government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.
Abbreviations
ADB = Asian Development Bank ADF C&PP CEMP DD/SCAR
= = = =
Asian Development Fund consultation and participation plan contractor environmental management plan due diligence /social compliance audit report
DMF = design and monitoring framework EA = executing agency EMP EPC
= =
environmental management plan engineering construction procurement
FMA GAP GRM
= = =
financial management assessment gender action plan grievance redress mechanism
ICB ICS
= =
international competitive bidding individual consultant selection
IEE IES
= =
initial environmental examination international environmental specialist
IPBC = Independent Public Business Corporation LIBOR NEC NES NLC OCR
= = = = =
London interbank offered rate National Executive Council national environmental specialist National Land Commission ordinary capital resources
PAM = project administration manual PMU = Project Management Unit PNG = Papua New Guinea PPL PPTA
= =
PNG Power Ltd. project preparatory technical assistance
QCBS RDC RP SIDCO SPS TL
= = = = = =
quality- and cost-based selection Rouna Development Company resettlement plan Sirinumu Development Company safeguard policy statement transmission line
I. PROJECT DESCRIPTION
1. Project Rationale. The proposed project will reduce fossil fuel consumption, increase access and improve network reliability on the Port Moresby power grid. The project will assist PNG Power Ltd. (PPL) to expand renewable energy generation, connect currently unserved customers and significantly improve the quality of electricity supply. The Project will (i) upgrade and rehabilitate two hydropower plants (Rouna 1 and Sirinumu toe-of-dam), (ii) extend the grid to approximately 3,000 additional households, including strengthening the distribution network (11 kilovolts [kV] mesh grid), and (iv) construct a new substation (Kilakila) and upgrade the existing substations. 2. Impact and Outcome. The impact of the Project will be increased economic activity for PPL residential and business customers. The outcome of the Project will be improved power supply for Port Moresby. 3. Outputs. The outputs of the project are as follows:
(i) Hydropower upgrade and rehabilitation, consisting of (a) upgrade of Rouna 1 hydropower plant (6 Megawatts [MW]), and (b) rehabilitation and upgrade of Sirinumu toe-of-dam hydropower plant (1.6 MW). After upgrade and rehabilitation, the two hydropower plants will provide 13% of the renewable energy for the Port Moresby grid. (ii) Upgraded distribution grid, including (a) extension of the grid to an estimated additional 3,000 households, (b) upgrade of the existing distribution grid (11 kV) to an open loop mesh design and, (c) implementation of a loss reduction program. It is estimated the project will connect an estimated 16% of households currently not connected and increase the access rate in Port Moresby by 5%. (iii) Upgraded substation capacity, consisting of construction of (a) one new Kilakila substation, (b) 6.1 km transmission line (66 kV), and (c) retrofits to existing substations. It is estimated that the project (distribution and substation upgrades) will reduce average outage duration to customers by 42% (by 80% within the central business district), contributing significantly to improved power supply. (iv) Efficient Project Management Services, consisting of establishment of a Project Management Unit (PMU) which will provide efficient technical design, management and supervision services.
4. Subproject Descriptions. The subprojects are described below:
Subproject 1: Kilakila Substation and Transmission Line. Subproject 1 will include one new substation (Kilakila substation) and 6.1 km of new transmission line (66 kV). The study included an alternative “Kaugere” location, however Kilakila was confirmed as the recommended option.
Subproject 2: Substation Capacitor or Statcom. The analysis assessed both options and concluded that detailed system stability and protection study is required. Both options were assessed and found to be financially and economically attractive.
Subproject 3: 11 kV Open Mesh. The objective was to enable uninterrupted load transfers between substations and between feeders to enhance reliability and restoration on faults. The initial investigation focused on use of load break switch
2
installation but was found not feasible. The scope was upgraded following review with PPL management to include automated switchgear and distribution capacitors to enhance customer restoration time. The amended project was found to be feasible.
Subproject 4a: Loss Reduction Programme. A number of options were reviewed which were subsequently included in subproject 3. This subproject was scaled back to a support program for a loss reduction pilot study and provision of essential equipment to enable the subproject. Further benefits will arise for the pilot project program as loss reduction opportunities are identified. It was considered essential this program proceed given PPL’s overall system losses exceed 22%.
Subproject 4b: Energy Access. The subproject will connect approximately 3000 households currently unable to afford the connection costs. The Government would contribute US$2.5 million equivalent to this project.
Subproject 5: Rouna 1 Rehabilitation. Various options were analysed. The least cost was decided to be complete replacement of Rouna 1 with a new station located beside the existing and the remaining plant decommissioned.
Subproject 6: Sirinumu Toe-of-Dam Rehabilitation. Options of (i) total replacement or (ii) rehabilitation only along with possible provision for installation of a future second generator reviewed were investigated. Option (ii) was selected as the least cost option.
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II. IMPLEMENTATION PLANS
A. Project Readiness Activities
2013
Jan Feb Mar Apr May Jun Responsibility
Advance contracting actions
√ √ √ PPL
Retroactive financing actions
√ √ √ PPL
Establish project implementation arrangements
√ √ √ √ PPL
ADB Board approval √ ADB
Loan signing
√ PNG Treasury/ADB
Government legal opinion provided
√ State Solicitors
Loan effectiveness √
PNG Treasury/ADB
4
B. Overall Project Implementation Plan
IMPLEMENTATION SCHEDULE Port Moresby Power Grid Development Project
Advance procurement initiated by PPL to ADB requirements
ID SP Task Name
1 Loan Effective (early by / latest by) * *2 PPL: DS Consultant procurement (Advance) f f f f f f*3 Design and Supervsion Consultant (DCS) p f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f p
SP-1 Kilakila Substation and Transmission Line (6.1km)
4 Design, EPC Bids and Contract Award p f f f f f f f p
5 Contract Effectiveness p f f
6 66kV Transmission Line Kilakila f f f f f f f f f f
7 66/11kV Substation Kilakila f f f f f f f f f f f f f f f f f f
8 Tests, Commissioning 66kV Works p
9 Project Completion p f p
SP-2 66kV Capacitor/Statcom
10 PPL/ICS: Transmission protection & stability study f f f f
11 PPL: EPC Bids, Contract Award (Advance procurement) f f f f f f *12 Plant Delivery (Statcom) f f f f f f f f f f
13 Installation, Commissioning f f f f f f
SP-3 11kV Feeder Open Loop Mesh, Capacitors & SP-1 Distribution
14 PPL: design, bid docs, bidding (with ICS suppport) f f f f f f
15 DCS: Evaluation Plant & Materials, Contracts Awarded p f f p*
16 Plant and Materials Delivery p f f f f f f f p
17 Installation Works bid docs, Bids and Contract Award f f f f f f *
18 Contract effectiveness f f
19 11kV Lines: Refurb, New Work, Switchgear, Capacitors p f f f f f f f f f f f f f f p
20 Progressive Commissioning f f f f f f f f f f f f f f
SP-4 Loss Reduction Program
21 PPL: Pilot Study Design, Equipment procurement f f f f f f
22 DCS: Program reviews and outcomes assessment f f f
23 PPL: Field Assessment (Start existing PPL equipment) f f f f f f f f f
24 PPL: Plant/materials procurement (added to SP3) f f f f f f f
25 PPL: Corrective Action, Pilot Feeder f f f f f f
26 PPL: Plan/design/review POM network corrective action f f f f f
SP-5 Rouna Hydro Power Station Replacement (6MW new)
27 PPL: Preliminary Works (incl tendering for services) f f f f f f f f f
28 DCS: Design, ICB Docs Preparation and Approval f f f f f f
29 Tendering Process and Contract Award f f f f f f *30 Contractor design f f f f f f f f f f f f
31 Equipment Procurement f f f f f f f f f f f f p
32 Civil Works f f f f f f f f f f f f f f f f f f f f f f f f p
33 Water Control Plants Works p f f f f f f f p
34 Power Plant and Substation Works p f f f f f f f f f f f f f p
35 Commissioning pp
SP-6 Sirinumu Hydropower Station Rehabilitation (1.6MW)
36 PPL: Preliminary Works p f f f f f p
37 DCS: ICB Docs Preparation and Approval f f f f
38 Tendering Process and Contract Award f f f f*39 Equipment Manufacture, Supply and Delivery f f f f f f f f f f f f
40 Intake Gate, Draft tube gate Refurbish pp
41 Guard Valve remove and install new. p f p
42 Turb/Gen Removal, Install new Turbine, Generator & MIV f f f f f
43 Switchgear and C&P equipment installation f f
44 Cone valve removal and install new f
45 Commissioning f
'12
Q4 Q1 Q2 Q3 Q4
2013 2014
Q1 Q2 Q3 Q4
2016
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015
5
III. PROJECT MANAGEMENT ARRANGEMENTS
A. Project Implementation Organizations – Roles and Responsibilities
Project implementation organizations
Management Roles and Responsibilities
Executing Agency Independent Public Business Corporation (IPBC)
Oversee implementation of the project. Support institutional strengthening and capacity building
programs under the project.
Project Steering Committee (PSC)
The PSC will be chaired by Department of National Planning and Monitoring and will have the following members; (i) Treasury, (ii) Department of Environment Conservation, and (iii) PNG Power Ltd.
Oversee implementation of the project. Monitor progress of the project. Rectify issues hindering progress of the project. Guide the executing agency and the implementing agency. Meet at least once each quarter.
Implementing Agency PNG Power Ltd.
Implement the infrastructure components of the project. Hire design and supervision consultants Coordination of steering committee meetings.Establish a Project Management Unit which will be
responsible for day to day implementation of the projects, including:
(i) preparation of an overall implementation plan and annual budgets;
(ii) overall interagency coordination; (iii) recruitment of the Project Management Consultants
and award procurement and consulting contracts, (iv) management of the bidding process, (v) management of capacity development activities, (vi) project safeguards document preparation and
safeguard plans implementation; (vii) project financial management; (viii) consolidation, review, and submission of regular
progress and financial reports to Treasury, including the annual audit report and financial statements;
(ix) monitoring and evaluation of project outputs and results;
(x) preparation of withdrawal applications for Treasury ADB Conduct regular loan review missions Review draft tender documents in accordance with
Procurement Plan Overall coordination and advisory support
6
B. Key Persons Involved in Implementation
Implementing Agency Officer's Name: Position: Telephone: Email address: Office Address: Asian Development Bank
Francis Uratun Project Manager +675 324 3548 [email protected] PO Box 1105 Boroko. N.C.D Papua New Guinea
Transport, Energy and Natural Resources, Pacific Department
Staff Name Robert Guild Position Director Telephone No. 632 632 4444 Email address [email protected]
Mission Leader
Staff Name Anthony Maxwell Position Senior Energy Specialist Telephone No. 612 8270 9445 Email address [email protected]
C. Project Organization Structure
5. The government of PNG will be the Borrower, Independent Public Business Corporation (IPBC) will be the executing agency (EA) and PNG Power Ltd. (PPL) will be the implementing agency. A Project Management Unit (PMU) will be established within PPL to coordinate implementation of the activities under the project. The PMU will be responsible for implementation of the project. The PMU will be responsible for engaging all consulting services and contracts under the project. The project organization chart is as follows:
Executing Agency (IPBC)
Implementing Agency (PPL)
Project Management Unit (PMU)
Project Steering Committee (PSC)
Design and Supervision Consultants (DSC)
PMU Project Manager
Safeguard Unit (Social and Environment)
Hydropower Design and Supervision
Transmission and Distribution Design and
Supervision
Financial Management
7
IV. COSTS AND FINANCING
6. The government of PNG has requested a loan of $51.7 million from ADB’s ordinary capital resources (OCR). The OCR loan will have a 20-year term, including a grace period of 5 years, custom tailored repayment method, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.15% per year, and such other terms and conditions set forth in the draft guarantee and loan agreements. The repayment dates will be 1 June and 1 December. Based on this, the average loan maturity is 13.8 years, and the maturity premium payable to ADB is 0.10% per annum. The government of PNG has provided ADB with (i) the reasons for its decision to borrow under ADB’s LIBOR-based lending facility based on these terms and conditions, and (ii) an undertaking that these choices were its own independent decision and not made in reliance on any communication or advice from ADB. 7. The government of PNG has also requested a loan in various currencies equivalent to SDR9,787,000 from ADB’s Special Funds (ADF) resources to help finance the project. The loan will have a 25-year term, including a grace period of 5 years, an interest rate of 2.0% per annum, and such other terms and conditions set forth in the draft loan agreements. The government of PNG will on-lend the proceeds of the OCR Loan and the ADF loan to PPL under subsidiary loan agreements acceptable to ADB. The terms for on-lending the proceeds of the OCR loan and ADF loan will include the same interest rates and repayments periods as that of OCR loan and ADF loan respectively. The financing charges during construction on the OCR and ADF loan will be capitalized. 8. The government of PNG will finance the remainder of the total project cost in an amount of $16.3 million, including local taxes and duties. The financing plan is in Table 2.
Table 2: Financing Plan
Source
Amount
Share of Total (%) ($ million)
Asian Development Bank (ADF) 15.0
18.0%
Asian Development Bank (OCR) 51.7
62.3%
Government 16.3
19.7%
Total 83.0 100.00%
8
A. Detailed Cost Estimates by Expenditure Category
Kina (millions) $ (millions)
Foreign Local Total Foreign Local Total % of Total
Item Exchange Currency Exchange Currency Base Cost
A. Investment Costs
1. Civil Works 14.1 18.9 33.0 6.8 9.1 15.9 23%
a. Hydropower Upgrade and Rehabilitation 5.2 10.6 15.8 2.5 5.1 7.6 11%
b. Upgraded Distribution Grid 3.9 2.6 6.5 1.9 1.3 3.2 5%
c. Upgraded Substation Capacity 5.0 5.7 10.7 2.4 2.7 5.1 7%
2. Equipment 82.7 2.9 85.6 39.7 1.5 41.2 59%
a. Hydropower Upgrade and Rehabilitation 53.1 0.0 53.1 25.8 0.0 25.8 37%
b. Upgraded Distribution Grid 11.5 2.9 14.4 5.3 1.5 6.8 10%
c. Upgraded Substation Capacity 18.1 0.0 18.1 8.6 0.0 8.6 12%
3. Land Acquisition 0.0 0.8 0.8 0.0 0.4 0.4 1%
4. Consulting Services 7.5 5.2 12.7 3.6 2.5 6.1 8%
5. Taxes and Duties 0.0 11.9 11.9 0.0 6.3 6.3 9%
Total Base Costs (A) 104.3 39.7 144.0 50.1 19.8 69.8 100%
B. Contingencies
1. Physical a
10.1 3.8 13.9 4.5 1.4 5.9 9%
2. Price b
4.6 1.8 6.4 2.3 1.1 3.4 4%
Subtotal (B) 14.7 5.6 20.3 6.8 2.5 9.3 14%
C. Financing Charges during Implementation
1. Interest during Implementation 8.4 0.0 8.4 3.8 0.0 3.8 5%
2. Commitment Fees 0.2 0.0 0.2 0.1 0.0 0.1 0%
Subtotal (C) 8.6 0.0 8.6 3.9 0.0 3.9 5%
Total Project Cost 127.6 45.3 172.9 61.3 21.7 83.0 120%
a Physical contingencies are computed at 10% of base cost.
b Price Contingencies are computed by expenditure based on annual domestic and international cost escalation factors.
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B. Allocation and Withdrawal of Loan Proceeds
ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS - OCR (Port Moresby Grid Development Project)
CATEGORY ADB FINANCING
Item
Total Amount Allocated for ADB Financing Percentage and Basis for
Withdrawal from the Loan Account
($)
Category Subcategory
1 Civil Works 10,200,000
1A Hydropower Upgrade and Rehabilitation
5,600,000 67% of total expenditure claimed
1B Upgraded Substation Capacity 4,600,000 84% of total expenditure claimed
2 Equipment 26,900,000
2A Hydropower Upgrade and Rehabilitation
17,300,000 61% of total expenditure claimed
2B Upgraded Distribution Grid 1,900,000 25% of total expenditure claimed
2C Upgraded Substation Capacity 7,700,000 82% of total expenditure claimed
3 Consulting Services 5,200,000 100% of total expenditure claimed
4 Financing Charges 3,400,000 100% of total amount due
5 Unallocated 6,000,000
Total 51,700,000
ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS - ADF (Port Moresby Grid Development Project)
CATEGORY ADB FINANCING
Item
Total Amount Allocated for ADB Financing Percentage and Basis for
Withdrawal from the Loan Account
($)
Category Subcategory
1 Civil Works 3,400,000
1A Hydropower Upgrade and Rehabilitation
1,100,000 13% of total expenditure claimed
1B Upgraded Distribution Grid 2,300,000 66% of total expenditure claimed
2 Equipment 9,300,000
2A Hydropower Upgrade and Rehabilitation
5,400,000 19% of total expenditure claimed
2B Upgraded Distribution Grid 3,900,000 52% of total expenditure claimed
3 Financing Charges 500,000 100% of total amount due
4 Unallocated 1,800,000
Total 15,000,000
10
C. Detailed Cost Estimates by Financiera
($ million)
ADB (OCR)
% of Cost
Category
ADB (ADF)
% of Cost Category
Government % of Cost
Category
Total Cost Base
Cost Taxes & Duties
Total
A. Investment Costs
1. Civil Works 10.2 58% 3.4 20% 2.3 1.5 3.8 22% 17.4
a. Hydropower Upgrade and Rehabilitation 5.6 67% 1.1 13% 0.9 0.8 1.7 20% 8.4
b. Upgraded Distribution Grid 0.0 0% 2.3 66% 0.9 0.3 1.2 34% 3.5
c. Upgraded Substation Capacity 4.6 84% 0.0 0% 0.5 0.4 0.9 16% 5.5
2. Equipmentb 26.9 59% 9.3 21% 5.0 4.1 9.1 20% 45.3
a. Hydropower Upgrade and Rehabilitation 17.3 61% 5.4 19% 3.1 2.6 5.7 20% 28.4
b. Upgraded Distribution Grid 1.9 25% 3.9 52% 1.0 0.7 1.7 23% 7.5
c. Upgraded Substation Capacity 7.7 82% 0.0 0% 0.9 0.8 1.7 18% 9.4
3. Land Acquisition 0.0 0% 0.0 0% 0.4 0.0 0.4 100% 0.4
4. Consulting Services 5.2 85% 0.0 0% 0.9 0.0 0.9 15% 6.1
a. Government In-kind contribution 0.0 0% 0.0 0% 0.9 0.0 0.9 100% 0.9
b. Consultants 5.2 100% 0.0 0% 0.0 0.0 0.0 0% 5.2
Total Base Costs (A) 42.3 61% 12.7 18% 8.5 5.7 14.2 21% 69.2
B. Contingenciesc
1. Physical 4.1 63% 1.2 18% 0.6 0.6 1.2 19% 6.5
2. Price 1.9 56% 0.6 18% 0.9 0.0 0.9 26% 3.4
Subtotal (B) 6.0 61% 1.8 18% 1.5 0.6 2.1 21% 9.9
C. Financing Charges during Implementation
1. Interest during implementation 3.3 87% 0.5 13% 0.0 0.0 0.0 0% 3.8
2. Commitment Charges 0.1 100% 0.0 0% 0.0 0.0 0.0 0% 0.1
Subtotal (C) 3.4 87% 0.5 13% 0.0 0.0 0.0 0% 3.9
Total Project Cost 51.7 62% 15.0 18% 10.0 6.3 16.3 20% 83.0 a
Amounts and percentages may not sum precisely due to rounding errors. b
Item includes engineering, procure and construct contracts. c
Physical contingencies are computed at 10% of base cost, price contingencies are computed by expenditure based on annual domestic and international cost escalation factors.
11
D. Detailed Cost Estimates by Outputs/Componentsa
($ million)
Total Cost
Distribution Upgrade Sub-station Capacity Upgrade
Hydropower Upgrade
Item Amount
% of Cost Category Amount
% of Cost
Category Amount
% of Cost
Category
A. Investment Costs
1 Civil Works 15.8 5.2 33% 3.1 20% 7.5 47%
2 Equipment 41.2 8.7 21% 6.9 17% 25.6 62%
3 Land Acquisition 0.4 0.4 100% 0.0 0% 0.0 0%
4 Consultants 6.1 1.3 21% 1.0 16% 3.8 63%
5 Tax and Duties 5.7 1.4 25% 1.0 17% 3.3 58%
Total Base Cost (A) 69.2 17.0 25% 12.0 17% 40.2 58%
B. Contingencies
1 Physical
b 6.5 1.6 25% 1.1 17% 3.8 58%
2 Price
c 3.4 0.9 26% 0.6 18% 1.9 56%
Subtotal (B) 9.9 2.5 26% 1.7 17% 5.7 57%
C. Financing Charges During Implementation
1
Interest During Implementation 3.8 0.8 21% 0.7 18% 2.3 61%
2 Commitment Charges 0.1 0.0 21% 0.0 18% 0.1 61%
Subtotal (C) 3.9 0.8 21% 0.7 18% 2.4 61%
Total Project Cost (A+B+C) 83.0 20.3 25% 14.4 17% 48.3 58% a
Amounts and percentages may not sum precisely due to rounding errors.
b Physical contingencies are computed at 10% of base cost.
c Price contingencies are computed by expenditure based on annual domestic and foreign inflation.
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E. Detailed Cost Estimates by Year a
$ millions
Total Cost 2013 2014 2015 2016
Item
A. Investment Costs b
1. Civil Works 15.8 2.6 8.3 4.8 0.1
2. Equipment 41.2 9.1 20.3 11.8 0.0
3. Land Acquisition 0.4 0.1 0.1 0.2 0.0
4. Consulting Services 6.1 2.3 1.5 1.5 0.8
5. Taxes and Duties 5.7 1.1 2.8 1.7 0.1
Total Base Costs (A) 69.2 15.2 33.0 20.0 1.0
B. Contingencies
1. Physicalc
6.5 1.4 3.2 1.8 0.1
2. Price d
3.4 0.4 1.5 1.4 0.1
Subtotal (B) 9.9 1.8 4.7 3.2 0.2
C. Financing Charges during Implementation
1. Interest during Implementatione
3.8 0.2 0.7 1.3 1.6
2. Commitment Feesf
0.1 0.1 0.0 0.0 0.0
Subtotal (C) 3.9 0.3 0.7 1.3 1.6
Total Project Cost 83.0 17.3 38.4 24.4 2.9
21% 46% 29% 4%
a Amounts and percentages may not sum precisely due to rounding errors.
b In mid 2012 prices.
c Physical contingencies are computed at 10% of base cost.
d Price contingencies are computed by expenditure based on annual domestic and foreign inflation.
e Interest during construction has been computed at the 10-year forward London Interbank Offered Rate of 1.91% plus ADB spread of 0.4% plus
maturity based premium of 0.5% totaling 2.51%. f
Commitment charge is based at 0.15% of the undisbursed balance.
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F. Contract and Disbursement S-curve
G. Fund Flow Diagram
0
20
40
60
80
100
2013 2014 2015 2016
Am
ou
nt ($
mn
)
Year
PNG: Port Moresby Power Grid Development Project
Planned Cum. Disbursements Planned Cum Contract Awards
Asian Development Bank
OCR/ADF Loan Withdrawal Application
Government of Papua New
Guinea (Borrower)
PNG Power Ltd (Implementing Agency)
On-lending Agreement
Withdrawal Application
Contractors, Consultants
Contract Invoice
14
V. FINANCIAL MANAGEMENT
A. Financial Management Assessment
9. A financial management assessment (FMA) has been carried out under the project preparatory technical assistance. The FMA was carried out according to ADB’s Financial Management and Analysis of Projects (The Guidelines) (2005). The FMA consisted of (i) completing the FMA Questionnaire with PPL; (ii) assessing financial management internal control and risk; and (iii) evaluating implementing agency’s financial management personnel, accounting policies and procedures, internal and external audit, and information systems for financial reporting and monitoring. 10. Management. PPL is governed by a four member Board of Directors appointed by the government. The Chief Executive Officer reports to the Board and is assisted by a Deputy Chief Executive Officer. There are General Managers for functional departments such as technical, operations, human resources, finance, commercial and corporate services. The General Manager Finance or the Chief Finance Officer is an expatriate position who is reported to by several Managers responsible separately for payments and accounts payables, receipts and accounts receivables, debt control, management accounting and reporting. The accounting system is computerized on Oracle11 Database software, which operates on-line and in real time. PPL uses the inventory, purchases, cash and fixed assets modules/applications of Oracle although three separate software packages are interfaced with the Oracle database. Customer and billing data is maintained on Gentrack software; data from Easipay customers is captured via Suprema software; Chris 21 software is used for payroll. There are plans to migrate from the Gentrac system on to the Customer Services application on Oracle Database thus reducing the need for maintaining different software and reducing the cost of licenses for Gentrac. 11. Financial Reporting. Financial results are reported on a monthly basis to the PPL Board and the Executive Management Board. The monthly reporting is detailed and includes profit and loss, balance sheet and cashflow for the month and year-to-date, a commentary and other reports such as debtors analysis, overtime, annual leave and manpower report and the production report. These reports are produced off-system on MS Excel spreadsheets using the Trial Balance from the Oracle Database. 12. Budgeting and Management Accounting. The annual budget is prepared off-system on Microsoft Excel and then uploaded on to the Oracle Database. Oracle then compares actual results with the budget and calculates variances on a monthly basis. Management accounts are prepared on a monthly basis using output from the database but input separately into MS Excel sheets. The budget is re-forecasted mid-year in June and again uploaded on to the Database. 13. Internal Auditing. PPL has a separate Internal Audit unit consisting of 12 staff. The Senior Manager position, which is head of the unit, is vacant at present. The internal audit division in centralized within the PPL national office but conducts audits of the larger regional centers at least once every year. A work plan for each member is prepared annually together with systems documentation (for the system such as revenue or payments being audited), audit plan and transaction audit. The transaction audit is carried out on sampling basis and a higher sample is audited for high risk areas such as revenue. 14. External Auditing. The external auditor is the Auditor General of Papua New Guinea who assigns audit work to a private auditor on a rotational basis. The present auditor is KPMG whilst the previous auditor was Pricewaterhousecoopers, both based in Papua New Guinea.
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15. Conclusions. PPL financial management is generally satisfactory. Their financial statements are regularly audited by a professional firm with international affiliation. Annual budgets are prepared and compared against actual performance and any significant variances highlighted and reported on a monthly basis. The accounting system is computerized on an Oracle-based integrated system. PPL financial statements for 2006, 2008 and 2009 have been re-stated in subsequent years. The 2008 re-statement relates to fuel account where fuel expenses for the year ended 31 December 2008 were under-stated by K13 million. In 2010, electricity rebates to consumers amounting to K7.7 million were not accounted resulting in an understatement of expenditure. Furthermore, cost of projects commissioned but still reported under works-in-progress at a cost of K10.9 million and the related depreciation charge of K8 million were not transferred to fixed assets. 16. The Management Letter issued by the auditor has raised several issues related to the non-reconciliation of general ledger balances with sub ledger balances. This is being looked into by PPL with the assistance of a Consultant with Oracle expertise. Although PPL operates Oracle-based integrated software, there are several other software packages that are used in conjunction, mainly as a result of the other software being in use prior to the transition to Oracle. PPL is considering integrating these functions into the Oracle database as far as possible. There are also issues raised in the auditor’s Management Letter regarding non-reconciliation of account balances in these systems prior to transfer to Oracle general ledger. The Oracle database should be used to the full extent in financial reporting not only up to the Trial Balance stage but the final financial statements themselves. At present the financial statements are produced in MS Excel which is time consuming and error prone. The same holds true for bank reconciliations and preparation of the budget. 17. Recommendations. The FMA shows that existing accounting policies and procedures are adequate to accommodate the management requirements of the proposed project and that there are no significant weaknesses in PPL’s accounting policies, information systems, or accounting/reporting procedures. However, a number of areas were identified. Finance staff at PPL do not have experience with managing multilateral development bank financing systems and training will be required, particularly during initial project phases. Improved internal liaison between PPL divisions is required to prevent prior year adjustments of financial statements. The Oracle-based system should be used to its full potential by limiting off-system work to a minimum. This applies to areas of financial reporting, bank reconciliations, budget preparation in particular. The internal audit division must note the reconciliation and other internal controls highlighted in the auditor’s Management Letter and ensure that staff audit programs capture work related to these areas.
B. Disbursement
18. The Loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2012, as amended from time to time),1 and detailed arrangements agreed between the Government and ADB. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS),2 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. PPL will ensure that the project is in compliance with applicable national laws and regulations and will apply the prohibited investment activities list (Appendix 5) to subprojects financed by ADB.
1 Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf
2 Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf
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19. Only reimbursement and direct payment procedures will be used under the project. Imprest Accounts and Statement of Expenditures will not be used. The Project Management Unit (PMU) will be responsible for preparing disbursement projections. PPL will maintain project accounts. The PMU will coordinate internally within PPL to arrange allocation of counterpart funds for individual projects. The PMU will be responsible for collecting supporting documents, preparing withdrawal applications and submitting to Treasury. Treasury will be responsible for screening withdrawal applications and submitting to ADB. 20. Before the submission of the first withdrawal application, Government of Papua New Guinea should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is US$100,000, unless otherwise approved by ADB. Government of Papua New Guinea is to consolidate claims to meet this limit for reimbursement. Withdrawal applications and supporting documents will demonstrate, among other things that the goods, and/or services were produced in or from ADB members, and are eligible for ADB financing and procured in accordance with ADB Procurement Guidelines (Civil Works, Goods) and Guidelines on Use of Consultants by ADB and Its Borrowers (Consulting Services).
C. Accounting
21. PPL will maintain separate project accounts and records by funding source for all expenditures incurred on the project. Project accounts will follow international accounting principles and practices. PPL will adhere to sound financial management requirements during the implementation of the proposed project. The PMU will maintain separate project records and accounts adequate to identify the: (i) goods and services financed from loan proceeds; (ii) financing resources received; and (iii) expenditures incurred on the components of each project.
D. Auditing
22. PPL will cause the detailed consolidated project accounts to be audited in accordance with International Standards on Auditing by an auditor acceptable to ADB. The audited accounts will be submitted in the English language to ADB within 6 months of the end of the fiscal year by the Borrower. In accordance with ADB Public Disclosure Policy, the project audited accounts will be publically disclosed on the ADB website. The annual audit report will include a separate audit opinion on the use of the funds. The Government and PPL have been made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. ADB requires audited financial statements for PPL to be submitted.
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VI. PROCUREMENT AND CONSULTING SERVICES
A. Advance Contracting and Retroactive Financing
23. All advance contracting and retroactive financing will be undertaken in conformity with ADB’s Procurement Guidelines (February 2010, as amended from time to time)3 and ADB’s Guidelines on the Use of Consultants (2010, as amended from time to time).4 The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. The borrower, IPBC and PPL have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the Project.
24. Advance contracting. PPL will undertake the following advance contracting activities; (i) recruitment of implementation consultants to support the activities of the PMU, (ii) tendering, and bid evaluation for civil works packages, and (ii) preparation of tender documents to procure materials and equipment and bid evaluation.
25. Retroactive financing. To expedite implementation, the government of PNG has requested and ADB approve advance procurement action and retroactive financing for eligible expenditure up to a maximum of 18% of the ADF loan and 18% of the OCR loan, incurred before loan effectiveness, but not more than 12 months before the signing of the loan agreement. The following contract packages have been identified for retroactive financing:
General Description Contract Value
(estimate)
Procurement Method
11 kV Open Mesh - Goods $6,640,000 ICB Access Road Construction (Sirinumu) $500,000 ICB Works Rouna 1 Geotechnical Survey $40,000 Shopping Spatial Survey for penstock route $35,000 Shopping Distribution software $90,000 Shopping Distribution software training $35,000 CQS Design and Supervision Consultants $4,080,000 QCBS Port Moresby 11kV Mesh detailed design $100,000 CQS Transient, harmonic, stability and protection studies $250,000 CQS
Total $11,770,000
B. Procurement of Goods, Works and Consulting Services
26. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines. International competitive bidding (ICB) procedures, national competitive bidding (NCB) and shopping procedures will be used within the thresholds listed below. Before the start of any procurement ADB and the Government will review the public procurement laws of the central and state governments to ensure consistency with ADB’s Procurement Guidelines. The procurement plan will be updated on an annual basis and disclosed on the ADB website. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section C. All consultants will be recruited according to ADB’s Guidelines on the Use of Consultants (2010, as amended from time to time). All shortlists and contract awards for consultancy services and contract awards for goods and works contracts will be publically disclosed. The terms of reference for all consulting services are detailed in
3 Available at: http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf
4 Available at: http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf
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Section D. 27. An estimated 91 person-months of international consulting services are required to (i) facilitate project management and implementation, and (ii) strengthen the institutional and operational capacity of PPL. Consulting firms will be engaged using the quality- and cost-based selection (QCBS) method with a quality: cost ratio of 90:10 (considered justified due to technical complexity of the substation, transmission, distribution and hydropower plant design). Consultants may also be recruited through individual consultant selection (ICS) (considered justified due to difficulties in finding consulting companies with the broad technical spread of required specialists on-staff, and limited pool of consultants with required technical and country expertise). All consulting packages will be advertised using Consulting Services Recruitment Notice of CMS.
C. Procurement Plan
1. Process Thresholds, Review and 18-Month Procurement Plan
28. Project Procurement Thresholds. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.
Procurement of Goods and Works
Method Threshold
International Competitive Bidding (ICB) for Works International Competitive Bidding for Goods National Competitive Bidding (NCB) for Works National Competitive Bidding for Goods Shopping for Works Shopping for Goods
>$3,000,000 >$500,000 ≤$3,000,000 ≤$500,000 <$100,000 <$100,000
29. ADB Prior or Post Review. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project. Procurement Method Prior or Post Comments
Procurement of Goods and Works
ICB Works ICB Goods NCB Works NCB Goods Shopping for Works Shopping for Goods
Prior Prior Prior Prior Post Post
Recruitment of Consulting Firms
Quality- and Cost-Based Selection (QCBS) Prior (90:10)
Recruitment of Individual Consultants
Individual Consultants Prior
30. Goods and Works Contracts Estimated to Cost More Than $1 Million. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.
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General Description Contract Value
(estimate)
Procurement Method
Prequal. of Bidders
(y/n)
Advertise-ment Date
(qtr/yr)
1. Kilakila Substation & Transmission Line -Design, Supply and Install
$8,590,000 ICB
n Q4 2013
2. Statcom – Design, Supply and Install $2,700,000 ICB n Q3 2013 3. 11 kV Open Mesh – Goods $8,310,000 ICB n Q3 2013 4. Distribution Installation – Works $4,130,000 ICB n Q4 2013 5. Rouna 1 Hydropower Plant Upgrade -
Design, Supply and Install $25,230,000 ICB
n Q4 2013
6. Sirinumu Hydropower Rehabilitation - Design, Supply and Install
$7,870,000 ICB
n Q4 2013
ICB = international competitive bidding, kV = kilovolt. Items 3 and 4 include a $2.5 million grant component from counterpart financing for household connections.
31. Consulting Services Contracts Estimated to Cost More than $100,000. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.
General Description
Contract Value
Recruitment Method
Advertisement Date
(qtr/year)
International or National Assignment
Comments
1. Design and Supervision Consultants
$4,080,000 QCBS Q3 2013 International and National
2. Port Moresby 11kV Mesh detailed design
$100,000 ICS Q3 2013 International
3. Transient, harmonic, stability and protection studies
$250,000 ICS Q3 2013 International
ICS = individual consultant selection, QCBS = quality- and cost-based selection.
32. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000. The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months. General Description Value of
Contracts
(cumulative)
Number of Contracts
Procurement/ Recruitment
Method
Comments
1. Access Road Construction (Sirinumu) $500,000 1 NCB Works 2. Loss Reduction Program $500,000 5 ICB Goods Monitoring
equipment 3. Rouna 1 Geotechnical Survey $40,000 1 Shopping 4. Spatial Survey for penstock route $35,000 1 Shopping 5. Distribution software (2 licences) $120,000 1 Shopping 6. IT equipment $20,000 3 Shopping ICB = international competitive bidding, NCB = national competitive bidding.
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4. Indicative List of Packages Required Under the Project
33. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. General Description Value of
Contracts
(cumulative)
Number of
Contracts
Procurement/Recruitment
Method
Comments
Works W01: Rouna 1 Hydropower Plant $25,230,000 1 ICB Design, Supply and
Install W02: Sirinumu 1.6 MW hydropower Plant Rehabilitation
$7,870,000 1 ICB Design, Supply and Install
W03: Kilakila Substation & Transmission Line
$8,590,000 2 ICB Design, Supply and Install
W04: Distribution Installation $4,130,000 1 ICB W05: Statcom $2,700,000 1 ICB Design, Supply and
Install W06: Access Road Construction (Sirinumu) $500,000 1 NCB W07: Rouna 1 Geotechnical Survey $40,000 1 Shopping W08: Spatial Survey for penstock route $35,000 1 Shopping
Goods G01: 11kV Open Mesh $8,310,000 10 ICB G02: Loss Reduction Program $500,000 5 ICB G03: SinCAL Distribution software (2 licences)
$120,000 1 Shopping
G04: IT equipment $20,000 3 Shopping
Consultants C01: Implementation Consultant $4,080,000 1 QCBS C02: Port Moresby 11kV Mesh detailed design
$100,000 1 CQS
C03: Transient, harmonic, stability and protection studies
$250,000 1 CQS
C04: SinCAL training $35,000 1 CQS CQS = consultants qualifications selection, ICB = international competitive bidding, NCB = national competitive bidding, PPL = PNG Power Ltd., QCBS = quality- and cost-based selection.
1. National Competitive Bidding
34. General. National competitive bidding (NCB) shall conform to the provisions set in the Public Financial Management Act as issued in 1995 and amended in 2003, and the specific procedures prescribed in the Financial Instructions issued in 2005, with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of ADB Procurement Guidelines.
35. Participation in Bidding (i) State-owned enterprises in Papua New Guinea shall be eligible to bid only if they
can establish that they are legally and financially autonomous, operate under commercial law, and are not a dependent agency of the Government/Executing Agency/Implementing Agency.
(ii) Foreign bidders shall be eligible to participate in bidding under the same conditions as national bidders.
(iii) Bidding shall not be restricted to preregistered firms and such registration shall not be stated in the bidding documents as a condition for the submission of bids. Where registration is required prior to award of contract, bidders: (i) shall be
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allowed a reasonable time to complete the registration process; and (ii) shall not be denied registration for reasons unrelated to their capability and resources to successfully perform the contract, which shall be verified through post-qualification.
36. Classification of Contractors; Qualification; Post-qualification.
(i) Post qualification shall be used unless prequalification is explicitly provided for in the loan agreement/procurement plan.
(ii) Bidding shall not be restricted to any particular class of contractors, and non-classified contractors shall also be eligible to bid. Qualification criteria (in case prequalification was not carried out) shall be stated in the bidding documents, and before contract award, the bidder having submitted the lowest evaluated responsive bid shall be subject to post-qualification.
37. Conflict of Interest. Bidders may be considered to be in conflict of interest with one or more parties in this bidding process if, including but not limited to:
(i) they have controlling shareholders in common, or (ii) they receive or have received any direct or indirect subsidy from any of them; or (iii) they have the same legal representative for purposes of this bid; or (iv) they have a relationship with each other, directly or through common third
parties, that puts them in a position to have access to information about or influence on the bid or another bidder, or influence the decisions of the employer regarding this bidding process; or
(v) a bidder participates in more than one bid in this bidding process. Participation by a bidder in more than one bid will result in the disqualification of all bids in which the party is involved. However, this does not limit the inclusion of the same subcontractor in more than one bid; or
(vi) a bidder or any of its affiliates participated as a consultant in the preparation of the design or technical specifications of the contract is the subject of the bid; or
(vii) a bidder or any of its affiliates has been hired (or is proposed to be hired) by the Employer or Borrower as engineer for the contract.
38. Preferences. No preference shall be given for domestic bidders and for domestically manufactured goods.
39. Advertising, time for bid preparation.
(i) Invitations to bid shall be advertised in at least one newspaper of national circulation or freely accessible and well-known website, allowing a minimum of 4 weeks for the preparation and submission of bids, such 4 weeks period to begin with the availability of the bid documents or the advertisement, whichever is later.
(ii) Bidding of NCB contracts estimated $1,000,000 or more for civil works, shall be advertised on ADB’s website via the posting of the Procurement Plan.
40. Standard Bidding Documents. Until national standard bidding documents approved by ADB are available, bidding documents acceptable to ADB should be used.
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41. Bid Security. If required by the bidding documents, bid security shall be in the form of a bank guarantee from a reputable bank. A bidder’s bid security shall apply only to a specific bid.
42. Bid Opening and Bid Evaluation.
(i) Bidders may deliver bids, at their option, either in person or by courier service or by mail.
(ii) Bidders shall not be allowed to amend their tenders after the closing date and time for submission of bids.
(iii) Bids shall be opened in public, immediately after the deadline for submission of bids. No bid shall be rejected during bid opening. The name of the bidder, the total amount of each bid, and any discounts shall be read aloud and recorded in the minutes of the public bid opening.
(iv) Evaluation of bids shall be made in strict adherence to the Qualifications and Evaluation Criteria stipulated in the bidding documents
(v) No bidder shall be rejected merely on the basis of a comparison with the employer’s estimate and budget ceiling without ADB’s prior concurrence.
(vi) The Contract shall be awarded to the technically responsive bidder that offers the lowest evaluated price, and meets the qualifying criteria. In determining the lowest evaluated price, the following are to be considered: (a) bid price, as offered, (b) arithmetical corrections on the bid price, if any, and (c) monetary value of the evaluation criteria that are stated in the bidding document.
43. Rejection of Bids. Bids shall not be rejected and new bids solicited without ADB’s prior concurrence.
44. Extension of the Validity of Bids. In exceptional circumstances and with prior ADB approval, the procuring entity may, before the expiration of bid validity, request all bidders in writing to extend the validity of their bids. In such a case, bidders shall not be requested nor permitted to amend the price or any other condition of their bid. Bidders shall have the right to refuse to grant such an extension without forfeiting their bid security, but bidders granting such an extension shall be required to provide a corresponding extension of their bid security.
45. Disclosure on Contract Awards. At the same time that notification on award of contract is given, the Borrower/Executing Agency/Implementing Agency shall publish the following information on contract award on a free and open access website or other means of publication acceptable to ADB: (i) name of each bidder who submitted a bid; (ii) bid prices as read out at bid opening; (iii) name and evaluated price of each bid that was evaluated; (iv) names of bidders whose bids were rejected and the reasons for the rejection; and (v) name of the
winning bidder, price it offered as well as the duration and summary scope of the contract awarded. The Executing/Implementing Agency shall respond in writing to unsuccessful bidders who seek explanations on the grounds on which their bids are not selected.
46. No Negotiations. There shall be no negotiations, even with the lowest evaluated bidder, without ADB’s prior concurrence. A bidder shall not be required, as a condition of award, to undertake obligations not specified in the bidding documents, or otherwise, to modify the bid as originally submitted.
47. Inspection and Auditing. Each contract financed from the proceeds of a Loan/Grant shall provide that the contractor/supplier shall permit ADB, at its request, to inspect their
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accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by ADB.
48. Member Country Restriction. Bidders must be nationals of member countries of ADB, and offered goods must be produced in and supplied from member countries of ADB.
D. Consultant's Terms of Reference
49. The purpose of the consultancy work is to provide detailed design and construction supervision for the Port Moresby Power Grid Development Project. A summary of the proposed design and supervision consultants is listed in the table below:
International Specialists months
Team Leader/Transmission and Distribution Engineer 30
Substation Engineer 6
Mechanical Engineer 18
Hydropower Civil Engineer 10
Hydropower Electrical Engineer 7
Hydro-mechanical Engineer 4
Hydrologist 0.5
Control/Protection/SCADA Engineer 3.5
Financial Management Specialist 1
Geotechnical Engineer 1
Environment Specialist 4
Community Development/Gender Specialist 3
Land Acquisition and Resettlement Specialist 3
Total 91
50. A summary terms of reference for the design and supervision consultants is presented below:
51. Team leader/transmission and distribution engineer (International, 30 person-months). The team leader will have overall responsibility for the implementation of the transmission, substation, distribution and hydropower projects. The team leader will report to the PMU project manager and will lead the consulting team. The team leader will be responsible for quality assurance, document preparation and coordination, project management and implementation of projects included in the contract. As transmission and distribution engineer, responsibilities will include review of existing studies and updating project designs prepared by PPL for the distribution and transmission line works, site reconnaissance, preparing preliminary design (bill of quantities, cost estimates, specifications, implementation schedule, drawings, diagrams, etc,), preparing bidding documents for Works components (Goods advanced procurement by PPL), evaluating bids (Goods and Works), contract management, equipment inspection, high level (top) construction supervision (PPL responsible for site supervision), commissioning of projects, and advising operation of equipment/facilities during the initial two months of operation whilst completing project close out reporting. The team leader will also (i) train PPL staff in preparation of tender documents for design, build, operate, transfer contracts; (ii) manage preparation of ADB standard tender documents and, (iii) manage the technical design and implementation of the distribution grid extension project.
52. Substation engineer (International, 6 person-months). The substation engineer will undertake the following for the substation related components (including Kilakila substation and
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statcom/capacitors): (i) reviewing existing studies and updating project designs, (ii) site reconnaissance, (iii) updating preliminary design by others, (iv) preparing bidding documents for substation engineering procurement construction (EPC) contract (bill of quantities, cost estimates, specifications, implementation schedule, drawings, diagrams, etc.), (v) evaluating bids, (vi) contract management, (vii) equipment inspection, (viii) high level (top) construction supervision advice and audit function (PPL responsible for site supervision), (ix) commissioning of the substation, and (x) advising operation of equipment/facilities during the initial two months of operation whilst completing project close out reporting.
53. Hydropower mechanical engineer (International, 18 person-months). The Engineer will have the responsibility of the Rouna 1 and Sirinumu hydropower subprojects through the duration of the project. The Engineer's responsibility includes; reviewing existing studies and updating project design, site reconnaissance, reviewing PPL preliminary survey works (pipeline routing and geotechnical), preparing preliminary design for turbine and associated mechanical auxiliary equipment, procurement (bill of quantities, cost estimates, specifications, implementation schedule, drawings, diagrams, etc,), preparing bidding documents for EPC contracts, evaluating bids, equipment inspection, high level (top) construction supervision (PPL responsible for site supervision), commissioning of projects, and advising operation of equipment/facilities during the first two months of operation whilst completing project close out reporting.
54. Hydropower civil engineer (International, 10 person-months). The Engineer will be responsible for civil works related design and supervision for all projects under this contract, but most works may be related to the hydropower subprojects. The Engineer's responsibility includes, the review of existing design of civil works structure, site reconnaissance, engaging and supervising topographical surveys if required or analysis of same if completed under advance procurement by PPL, structural analysis, preparing outline design, procurement inputs (bill of quantities, cost estimates, specifications, implementation schedule, drawings, diagrams, etc.), support in preparing bidding documents for EPC contracts, evaluating bids, equipment inspection and high level (top) construction supervision (PPL responsible for site supervision).
55. Electrical engineer (International, 7 person-months). The Engineer's responsibility includes; reviewing existing studies, site reconnaissance, preliminary design, detailed specification of generator and associated auxiliaries, electrical equipment and switchyard, procurement inputs (specifications, bill of quantities, detailed cost estimates, implementation schedule), evaluating bids, equipment inspection, top supervision of equipment installation and commissioning.
56. Hydro-mechanical engineer (International, 4 person-months). The hydro-mechanical engineer, a specialist in gates, will be responsible for intake gates and penstock preliminary design and supervision. The Engineer's responsibility includes reviewing existing studies, site reconnaissance, preparing preliminary design of intake gates, penstocks and associated hydro-mechanical works, procurement inputs (bill of quantities, cost estimates, specifications, implementation schedule, drawings, diagrams, etc.), evaluating bids, equipment inspection, high level (top) construction supervision (PPL responsible for site supervision) and commissioning of water control plant.
57. Hydrologist (International, 0.5 person-month). The hydrologist will undertake the hydrological studies for the design of the Rouna 1 hydropower plant, including determination of
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construction flood levels, optimize plant siting and undertake erosion and flood protection design.
58. Control system engineer (International, 3.5 person-months). The Engineer's responsibilities include; providing complementary specialist Controls, Protection & Relay or SCADA/communications systems technical support as required to all sub-projects, reviewing existing studies and updating project designs, preparing preliminary design, procurement inputs (bill of quantities, cost estimates, specifications, implementation schedule, drawings, diagrams, etc,), equipment inspection, commissioning of substation and distribution auto-recloser and auto-sectionalizer devices with PPL SCADA liaison, and advising operation of equipment/facilities during the first two months of operation.
59. Financial management specialist (International, 1 person-month). The Financial management specialist will assess financial management issues within PPL identified in the Financial Management Assessment and provide assistance as required.
60. Geotechnical engineer (International, 1 person-month). The Engineer will be responsible for geotechnical design and supervision for all projects under this contract, but most works may be related to the hydropower subproject, access roads, substation and transmission line. The geotechnical engineer’s responsibility will include, (i) design and review of geotechnical site investigation work, (ii) collection of background geotechnical data, (iii) assessment of slope stability, (iv) preparation of technical specifications suitable for tender, and (v) identification and assessment of construction materials. The engineer will specifically assess slope stability issues associated with access road, head ponds and penstock for Rouna 1 construction.
61. Environment specialist (International, 4 person-months). The international environmental specialist (IES) will have at least ten years experience in environmental assessment and management including in project implementation. Experience in the power sector and in Papua New Guinea and/or other Pacific countries would be an advantage. At least 50% of the time of the IES will be devoted to capacity building of the national environmental specialist (NES) and PPL’s existing Environment Officer as well as wider awareness raising and strengthening of PPL staff (including management) in safeguards. In respect of capacity building, the IES and NES will be required to coordinate with any other TA or projects being provided by government or its development partners in the areas of safeguards in the energy/power sector:
(i) Facilitate the participation of government counterparts in ongoing capacity development activities to local counterparts and national consultants to ensure skills transfer for improved sustainability of investments.
(ii) In conjunction with the NES and social safeguards specialists/land officers undertake or participate in consultations as required.
(iii) Based on detailed designs, assist the NES to update the initial environmental examinations (IEEs) for the subprojects in compliance with ADB Safeguard Policy Statement 2009 (SPS) and the Environment Act 2000 and Environment (Prescribed Activities) Regulations 2002.
(iv) During detailed design of each subproject, prepare draft method statement/contractor environmental management plan (CEMP), and other management plans as required including waste management plan, materials management plan, excavation protection and runoff control plan, noise and dust
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control plan, drainage management plan, transport management plan, and health and safety plan.
(v) Assist PPL/PMU, in consultation with the Department of Environment and Conservation, to ensure that environmental safeguard measures under the Project comply with national safeguard requirements including but not limited to (a) preparation of an Inception Report for the overall project (referring to each sub-project); (b) registration of notice for preparatory work; (c) conversion of IEE documents into environmental impact statement for subprojects that include Level 3 activities; and (d) applications for environmental permits under Environment Act and permits under the Water Resources Act as required.
(vi) Assist PMU procurement specialists and other PMU members as required to include the draft method statement/CEMP and other plans (see item iv above) and relevant provisions and text from the updated IEE/ environmental impact statements into the tender/contract documentation for each subproject.
(vii) Assist the NES to review the contractor’s detailed designs and CEMP (including other plans as required - see item iv) for each subproject, suggest changes or revisions as required, and recommend to PMU Head that approval of the CEMP may be issued.
(viii) Assist the NES to establish an environmental monitoring (CEMP compliance) and reporting system within the PMU and contribute to Quarterly Progress Reports - including compilation of relevant items from Monthly Reports prepared by contractors - to be prepared by the PMU for IPBC and ADB.
(ix) Monitor the contractor’s compliance with CEMP (and other plans), and as necessary conduct on-site spot-checks of contractor’s mitigations and review contractor’s Monthly Reports regular monitoring reports for each subproject; and
(x) Ensure compliance with all assurances under the Project.
62. Community development/gender specialist (International 3 person-months). The specialist will supervise the implementation of the gender action plan, including supervision of survey work, conducting workshops, conducting training and capacity building programs, preparation of gender and social related reporting. The specialist will be responsible for incorporating the GAP into project planning, implementation, and monitoring frameworks, including community consultations, awareness training, and establishment of sex-disaggregated indicators for project performance and monitoring.
63. Land acquisition and resettlement specialist (International, 3 person-months). The specialist will have a degree or relevant qualification in social safeguards and/or development studies and over 10 years of work experience in resettlement including the implementation of resettlement plan. Recent experience in preparing resettlement plans (RPs) and/or conducting social development studies for ADB projects, and familiarity with the sections of ADB’s Safeguard Policy Statement and its procedural requirements regarding land acquisition and resettlement will be highly regarded. The specialist together with the national resettlement specialist will proceed to accomplish the tasks in accordance with ADB’s Safeguard Policy Statement and its procedural requirements regarding land acquisition and resettlement and ADB's guidelines and handbooks on resettlement. The specialist will also undertake any other necessary work assigned by the team leader.
(i) Provide the overall leadership to PMU in the implementation of RP. (ii) Review all available information and data with regard to project impacts as well
as project documents, including the RRP, loan documents, the RP, and other relevant reports.
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(iii) Develop the project’s information management system/database on social safeguard aspects, including a system to track the project’s relevant documents and records. Maintain an up-to-date collection/library of relevant safeguard documents.
(iv) Visit the project sites and assess resettlement impacts of the project and up-date the resettlement plan already prepared during PPTA.
(v) Plan and conduct social assessments in affected villages through participatory methods including but not limited to focus group discussions, meetings, in depth interviews and key informant surveys and in close consultation with APs and in collaboration with PPL’s relevant staff.
(vi) Update due diligence report for the existing facilities by undertaking further audits during detailed design.
(vii) Develop the system for effective management and implementation of resettlement and other relevant safeguard activities under the project.
(viii) Participate in conducting public consultations, advice relevant parties within PMU/SU and document the outcome.
(ix) Undertake the project’s monitoring of the resettlement and relevant activities on social safeguards. Coordinate with the environment specialist and other PMU specialists, government counterparts, and other relevant stakeholders for implementation and monitoring on relevant safeguards.
(x) Prepare semi-annual monitoring reports with adequate information meeting ADB requirements for submission by PPL to ADB. Coordinate with ADB’s safeguard specialist to review and clear the report. Assist in conducting any field review by ADB on the social safeguard compliance.
(xi) Develop the project’s grievance redress mechanism (GRM). Monitor status of grievances, facilitate their resolution, maintain documentation, and report the progress through monitoring reports.
(xii) Train staff of PMU and other relevant agencies in close collaboration with the national resettlement specialist.
(xiii) Participate in relevant meetings and provide advice on resettlement as appropriate.
(xiv) Finalize the due diligence /social compliance audit report (DD/SCAR) for existing facilities (Rouna 1, Sirinumu, and the transmission lines) including (a) properly identify and define existing facilities under or associated/linked with the project; (b) prepare a detailed chronological list of relevant events (e.g. acquisition, compensation/payment, claims/disputes, court cases/adjudication, development assistance, etc) related to the existing facilities. Collect and analyze relevant documents and additional information; (c) identify and assess claims of previous landowners and the government’s efforts to resolve them; (d) examine the current status of claims and the government’s negotiation to resolve disputes. Confirm if the government and claimants have reached to an agreement (e.g. a development package) to resolve disputes; (e) ascertain the current status of the development package(s) to local communities. If not finalized yet, coordinate with relevant authorities to develop an action plan to resolve disputes; (f) further consult with local communities, claimants, government agencies and PPL. Visit the project sites to examine relevant issues. Document the consultation process and its outcome; (g) assess whether there are any outstanding local concerns, adverse social impacts or compliance issues under the existing facilities; and (h) ascertain the local community’s support to the existing facilities as well as the proposed project.
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(xv) Develop an action plan to address outstanding concerns. The action plan should include: (a) a summary of issues to be addressed; (b) activities identified to address the issues; (c) public consultations, disclosures and grievance redress during preparation and implementation; (d) institutional arrangements for implementation of the action plan; (e) estimated budget and financing source for proposed activities; and (f) monitoring and reporting.
64. Project Management Unit (PMU). The PMU will include the following full-time PPL staff, (i) two project engineers, (ii) lands/social safeguard officer, (iii) environment officer, (iv) finance officer, (v) procurement officer, (vi) surveyor, (vii) two line engineers, and (viii) administrative assistant.
VII. SAFEGUARDS
A. Environment 65. An initial environmental examination (IEE) has been undertaken for each of the six subprojects included in the Project. These investments, which will be made to different components of the Port Moresby power grid, are expected to create a small range of impacts that are largely within sites owned and/or managed by PPL and which can be mitigated through the measures set out in the IEEs and environmental management plans (EMPs). The main potential environmental impacts identified include land clearing, earthworks, dust, noise, tree trimming, materials sourcing and transportation, construction traffic issues, waste disposal and discharges, cleaning and refurbishment of plant and minor upgrading of an access road. Two environmental specialists are to be included in PPL’s PMU; an international environmental specialist (IES) and national environmental specialist (NES). The IES and NES will update the IEEs and EMPs based on detailed design and prepare draft method statements/contractor EMPs (CEMP) to be included in the bid documentation. The Department of Environment and Conservation will clear the IEEs in accordance with the rules and procedures of the Environment Act 2000 and confirm the subproject activities for which environmental permits are required. The IEEs are presented in the RRP linked documents. B. Involuntary Resettlement and Indigenous Peoples 66. The project has been classified as category B for involuntary resettlement and category C for indigenous peoples following ADB’s Safeguard Policy Statement. The project does not involve physical displacement of people or structures, but requires acquisition of land for the new substation and transmission line. A due diligence report for existing sites and a land acquisition/ resettlement plan (RP) for the new substation and transmission line have been prepared. PPL will update and finalize the RP during project implementation. PPL will also update DDR for the existing facilities by undertaking further audits during detailed design. PPL will coordinate with relevant government and non-government agencies to implement and monitor the land acquisition and compensation activities. PPTA due diligence has confirmed that there will be no impact on distinct and vulnerable indigenous peoples. 67. PPL will assign a land officer within the Project Management Unit, to manage land acquisition activities. The design and supervision consultants will include an international land acquisition/resettlement specialist with experience in land acquisition/resettlement to assist PPL and the government to manage land acquisition and social safeguard aspects. The project management consultants will support in building capacity of PPL, and other relevant state
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government authorities to update, implement, and monitor the RP. They will conduct/organize necessary trainings on social safeguards and other necessary skills (e.g. surveys) to the relevant PPL staff that might be involved in land acquisition and safeguard activities.
VIII. SOCIAL SAFEGUARDS DUE DILIGENCE EXISTING FACILITIES
68. This due diligence/social compliance audit report (DD/SCAR) has been prepared following ADB’s Safeguard Policy Statement (SPS) to screen existing facilities that will be upgraded under the project. While the existing facilities are not expected to involve new land acquisition and resettlement impacts, the screening/audit was undertaken to confirm the land ownership of the existing sites and identify any outstanding safeguard compliance issues. A separate RP has been prepared to manage impacts of the project components/construction involving land acquisition/resettlement impacts. A summary of subproject impacts is presented below.
Subproject Activities and Resettlement Impacts
IX. DUE DILIGENCE/SOCIAL COMPLIANCE AUDIT OF EXISTING FACILITIES
69. All upgrading/rehabilitation works under the project are expected to be confined within the existing facilities/locations without new land acquisition and resettlement impacts. This section examines landownership issues identified and reviewed by PPTA for the following
Subproject
Proposed Activities Resettlement Impacts
Kilakila Transmission Line (TL) and substation
Construction of a new substation and transmission line
Involves land acquisition. A resettlement plan has been prepared.
Substation Capacitors or Statcom
Fixing switching gear, transformers, etc. to existing power poles and inside substations owned by PPL
Land acquisition is not required. No resettlement impact.
Upgrade of 11kv system
Install electrical and engineering equipment
Build new transmission/distribution lines that follow existing alignment and/or confined to existing facilities of PPL or over existing power poles, or on public land or underground cables
All activities confined to road easement and/or PPL properties
Land acquisition is not required. No resettlement impact.
Loss Reduction Programme
Fixing new equipment and gadgets within existing substations
Land acquisition is not required. No resettlement impacts.
Rouna 1 Hydro-power refurbishment
Dismantling of existing generator house/turbines and fixing new units.
Demolition of existing buildings and build new and/or extensions.
Removal of existing TL from Rouna and replacing with new lines
All activities confined to existing and already functional power stations
No land acquisition/resettlement impacts. The TL alignment is on government land.
Sirinumu toe-of-dam Upgrade
Removal of turbine, generator and other power equipment
Installing new equipment
All activities confined to existing and currently functioning (partly) hydro-power station
No land acquisition/ resettlement impacts.
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existing facilities: (i) Rouna 1 hydro-power plant; (ii) Sirinumu hydro-power plant, and (iii) Existing transmission line (TL) that conveys power from Rouna to the City. A. Rouna 1 Hydropower Plant
70. The Rouna hydro-power complex was built on land that was acquired from customary landowners by the Colonial administrators between 1890 and 1900. The subject land was registered by the State in about 1900. This land is known as Portion 2542 with a total area of 2,216 ha that formerly belonged to four clans namely, Omani, Nadeka, Nareme and Ianari. All these clans belong to the Koiari main clan. The land does not have Central Claim Number (commonly known as cc.xx-number) as it is not the customary land. 71. The land owners received a sum of K27,333.14 on 14 January 1978 for Rouna 2 installation area and another payment of K650,000 on 20 February 1983 for Rouna 4 installation area. In addition, the National Executive Council (NEC) made several decisions in the past to provide various financial and technical supports, including providing an ex-gratia payment in the sum of 600,000 kina to the former land owners of Rouna 4 hydro-power plant to address their demands. Accordingly, PPL paid a sum of 24,000 kina annually from 1984 to 2009 totalling 600,000 kina. 72. However, the four clans (Omani, Narime, Nadeka and Ianari) of Rouna 1 claimed that the land in fact belonged to them and they had not received adequate compensation. The verbal claims by former landowners were also expressed during the consultations attended by PPTA team, including the public consultation on 22 August 2012. Concerns were also expressed that some clans did not receive the compensation provided earlier by the government, indicating an existence of inter-clan disputes on distribution of the compensation amount. 73. The National Land Commission (NLC) inquired into the claims of the four clans in 2010 and 2011 and provided its decision on 14 December 2011. The NLC’s findings/decisions included:
The claim over Portion 2542 land consisting of 2,216 ha belonged to the four clans of Omani, Nerime, Nadeka and Ianari;
The land was acquired and is now owned by the state;
The settlement payment be calculated subject to Schedule 2 of National Land Registration Act, and the payment be made to four clans namely, Omani, Narime, Ianari and Nadeka;
The distribution of payment be apportioned in accordance to size of portions or parcels of land areas owned by each clan;
The land is categorised as outside of town boundary. Therefore, the settlement payment would be a total of K236,600;
Increase the payment by 50% that will increase the above award by K118,300 and the total award is K354,900; and
The distribution of the settlement payment amongst persons is left to the discretion of the clan leaders taking into account of customary land tenure system as practised locally.
74. The payment order issued by the NLC was not settled by the State until 2012. This agitated the former landowners and on 2 April 2012 the Rouna Incorporated Land Group (ILG) submitted a petition to the Prime Minister demanding from the State a sum of K290,756,736 for
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the occupation of the land, the payment of rental arrears for that land, etc.. The State did not take any action on this and the Chairman of Rouna ILG demanded on 12 June 2012 in a letter that the government resolved the matter within 14 days and stated that failure to do so would make land owners to take action to stop water supply to Rouna 1 to 4. As their demand was not attended to by the State within the time period mentioned in the letter, the former landowners stopped water flow into the generator house of Rouna complex on 21 June 2012. This deprived City of water supply and there were interruptions in power supply.5
75. After the closure of water supply to Rouna complex, the government appointed a team to discuss with landowners to resolve the dispute. The two parties (the government team and landowners) which met on 21 June 2012 reached an agreement in the interim to accept/provide a sum of K500,000 against the K354,900 awarded by the NLC.6 The agreed amount has been given by the government in three separate cheques where the government has contributed K300,000, and PPL and Eda Ranu a sum of K100,000 each making the total amount of K500,000. The PPTA team has seen the documentation in support of landowners accepting the cheques issued by the government agencies. 76. In the meantime, the Government sought and received a legal opinion from the Department of Justice and Auditor General (DJAG) on the claim dated 2 April 2012 submitted by the Rouna ILG demanding a sum of K290,756,736. The DJAG has provided the following legal opinion in a letter dated 29 June 2012 addressed to the Chief Secretary of the Government (Appendix 4):
It is an undisputed fact that the subject land (portion 2542) has been acquired. This land is now State land;
The previous landowners no longer own this land. The Independent State of PNG is the legal owner of this land;
The subject land is not owned by Rouna ILG. The former owners of this portion of land are four Clans namely: Omani, Narime, Ianari and Nadeka. If these 4 clans constitute members of Rouna ILG, then this ILG will be legitimate. If not, there will be a serious legal issue of legitimacy;
NLC has already provided its decision, including a payment of K354,900 to the four landowner clans who previously owned the land. The NLC’s decision has not been reviewed or appealed;
The claim for K290,756,736 is totally fictitious and illogical because the State as owner of the Portion of land cannot pay the rent for using the land;
If parties wish to seek compensation or damage for any loss of land use rights, then they must go to a normal court of law and seek specific remedial measures;
There is no basis in either statute law, common law or equity for the total claim of K290,756,736 by the Rouna ILG. This claim must therefore be rejected outright. Should the former landowners insist, they must be asked to pursue their claim through the normal court of law and prove their claim. As it is, the State and its agents and instrumentalities must not entertain the present claim; and
The State and the claimants need to design a development package or an ex-gratia fund for assistance to former land owners as an act of good will.
5 This year was not the only time former land owners obstructed power generation and deprived City residents with
water. Similar incidents had occurred in 2011 and 1991. 6 It is to be noted that the agreed amount is K145,100 in excess of NLC’s Order.
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77. One of the demands by former landowners is that PPL should provide an equity and share of profits to them made by the PPL. PPL has clarified that (i) it is not possible to meet this demand as there is no basis for this; (ii) it is also unfair for other landowners in other locations who have provided their land to establish installations by PPL in the past; and (iii) the issue of development package to uplift the socio-economic development is clearly in the domain of the government. However, the PPL confirms that work in this area is in progress both by PPL and the government. 78. It appears that the poor quality of services in the Rouna area is one of the reasons for frequent agitations by local people/landowners and the government is concerned about it. Therefore, the government has drafted a development package that will include various services to the local people, such as education, health, and youth and social activities. The funding for the development package is expected to come from the government counterpart funds whilst PPL will provide assistance in the area of setting up a land owner company which will form the basis for former landowners and PPL to discuss and finalize the package. 79. The government plans to establish Rouna Development Company (RDC) along the lines of the Sirinumu Development Company (SIDCO) with an injection of capital of K3.25 million over a period of five years from 2013 to 2017 by PPL. The proposals are currently being finalized by the government. A constitution for the RDC has been drafted. 80. The purpose of RDC and development package is to address concerns expressed by the previous landowners. More specifically, the aim is to improve the standard of living of Rouna people and thereby to create a healthy and self-sufficient community for them. It is the government’s view that the establishment of RDC is the preferred alternate vehicle in channelling development assistance rather than providing periodic cash hand-outs to address the local concerns. 81. Majority of the Rouna 1 participants in the public consultation held on 22 August 2012 demanded local services from the government. While one clan leader at the consultation said that the land is owned by them and the State should pay compensation for the use of their land, there were several other clan members including women who expressed that they were interested more on receiving development benefits than compensation money. All they wanted was that the government provides important services for their benefits. PPL responded positively to demands for local/community development activities and advised local clan leaders to form ILG(s) to partner with PPL and the government for such initiatives. After this discussion, neither the leader who wanted paid compensation nor other clan leaders and/or members raised any further concern on land ownership or compensation for Rouna 1 subproject. 82. PPTA has concluded that the land occupied by the Rouna complex is confirmed to be State owned land. However, the government and PPL will finalize and implement a development package to address the local concerns. The Government has included an allowance in the 2013 budget to support a development package. B. Sirinumu Toe-of-dam Hydropower
83. The land at Sirinumu dam and reservoir known as Waharo in local language (Sirinumu in English) has an extent of 54 acres. The previous owners of this land are 14 clans from around the area. This land was purchased by the Australian Administration for a total compensation price of £56,274 between 1961-62. An additional compensation totalling A$5,778 was paid to the local people in 1972 for their gardens covered by water when the spill way level was raised.
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84. The former landowners of Sirinumu (together with Rouna people) forced the closure of Rouna power station on 20 November 1991 and petitioned the Minister for Lands and Physical Planning to address their demands (compensation, etc.). To address their demands, NEC approved in 1993 the establishment of Sirinumu Development Authority (SIDA). The SIDA was subsequently converted to the Sirinumu Development Company (SIDCO) in 1996 with the financial allocation of K125,000 approved by NEC. The PPL has provided a package of development assistance amounting to K 9,200,000 from 1996 to 2008 since the formation of SIDCO. A further package of K 6 million for the period covering from 2009 to 2013 has been agreed and is under implementation. 85. SIDCO has been utilizing the development package to provide community and livelihood development assistance to land owners in the area. The relationship between PPL and SIDCO is cordial and rewarding to both parties. The 12 Directors of SIDCO represent the 12 major clans in Sirinumu area. The two Directors one each representing PPL and Ed Rouna are ex-officio members. 86. The study team did not note any demands for land compensation from the Sirinumu people during the PPTA study. This was further confirmed by deliberation of the fully-publicised and the well-attended public consultations held in August 2012 where none of the 50 participants raised any land issue. However, there was a consensus among the government and local participants with regard to the current poor condition of basic services and the need to extend the development assistance beyond 2013.7 The local participants suggested that the
access road be sealed. The government participants agreed that government funds will be sought for the rehabilitation of this road. PPL has agreed that the current development assistance will be continued. 87. The PPTA has concluded that there are no landownership issues. However, the government and PPL will continue and extend the development package.
C. Existing Transmission Line from Rouna
88. The power generated in Rouna complex is transmitted to the Borokko substation in the City via an existing TL. This TL has been built around 1960s. It is proposed that the power is taken off at tower 56, near Magi Highway (Map 2) and transmitted to the new substation at Kilakila via the new TL to be built under the project. 89. An unresolved land ownership issue was noted with regard to the land occupied by tower 56 at existing TL from Rouna to the city. The land where tower 56 is built is owned by 2 clans namely, Iarogaha and Uhadi Iarogaha. This is recognized as CC.79 and is registered in the name of two ILGs Iarogaha and Uhadi Iarogaha. Meetings8 held with clan leaders during the study indicated that the government is yet to acquire and compensate the two clans for the land occupied by tower 56. The affected clan leaders have agreed to sell the portion of affected land to PPL. Accordingly, the PPL is working on a memorandum of agreement to acquire land occupied by tower 56 as well as for the erection of additional and new towers on their customary
7 The basic services such as water, power, schools, health, etc. Do not extend to all households in the Sirinumu
area. Interviews revealed that several households are without power and the majority have no potable water supply. The farming is traditional without the benefit of modern techniques to increase productivity. The road that leads to Sirinumu dam requires maintenance while the schools and health posts are away from the villages. The state of roads makes their access to social services such as health, schools and markets difficult.
8 Meetings were held with relevant clan leaders/land owners on 2, 15, 23 and 28 August 2012.
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land. The resettlement plan (RP) prepared for the new substation and transmission line covers the land issue related to tower 56 as well. PPL will update the RP after the detailed design. While updating the RP and DD/SCAR, PPL will update the landownership status of the existing TL from Rouna to the city by an examination of landownership records at the provincial/district land administration offices. D. Consultations, Disclosure and Grievance Redress
90. PPL has consulted local community/lanowner groups and other stakeholders during preparation of the proposed project in several ways, including (i) social assessments; (ii) community meetings; (iii) focus group discussions with clan leaders, households and women groups; (iv) public consultations; and (v) site visits and observations. 91. There were well-publicized and well-informed public consultations conducted with local communities/landowner groups from Rouna 1, Sirinumu, and the substation/transmission sites (Appendix 6). The PPL presented project details, elaborated on assessment of impacts and sought the participants’ feedback on the proposed project design. In addition, there has been several other contacts and meetings held between the communities and PPTA team/representatives from PPL between July–August 2012. A detailed list of consultation activities undertaken is included in the RP and social analysis report. 92. A consultation and participation plan incorporating both social and environmental issues for implementation phase has been prepared and attached in the PAM. The PPL will organise further consultations during project implementation following this plan. Participants will include traditional and clan leaders, ward councillors, and all other interested members of the community. Separate meetings will also be organised with women to continue to understand and discuss their preferences and concerns at that stage. PPL will be joined during meetings by representatives from relavant government agencies. The outcome of the further consultations will be reflected in the updated DD/SCAR and other relevant safegaurd reports. 93. The project will establish a grievance redress mechnism (GRM). The details of the GRM are described in the RP. The same GRM will be utilized to address any grievances related to existing facilities as well. 94. In compliance with ADB requirements, PPL will publicly disclose draft and final DD/SCAR. The draft and final DD/SCAR will be also disclosed on the ADB website upon submission by the PPL. E. Action Plan: Community Development Package
95. Objective. The objective of this action plan or development package9 is to engage previous landowners/ local communities and provide them with a development assistance to improve their living standards. It is expected that this will also ensure their support to the project, minimize disturbance to project implementation, and avoid other risks. 96. Scope and Activities. The government/PPL has drafted a development package of K3.25 m to be granted to the communities/previous landowners at Rouna 1 through proposed Rouna Development Company (RDC). The grant assistance will cover the period from 2013 to 2017. The list of proposed activities is as follows:
9 “Action plan” and “development package” are used interchangeably in this section.
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a. Economic investments b. Community services
i. Education projects ii. Health services iii. Youth and social activities
c. Administration support d. Machinary (transport), maintenance and repair
97. This package will be further discussed and detailed activities finalized during the detailed design. The updated plan will provide details on the number and types of beneficiaries, specific outputs, detailed activities, implementation schedule, updated cost estimate, and arrangements for implementation and monitoring. 98. Stakeholder Consultations. The PPL will further consult with the local communities/landowner groups to solicit their views on and finalize the proposed development package and its implementation arrangements. The outcome of the consultations, including any formal memorandum of agreement with the community leaders will be included in the updated report. The approach and process for consultations are described in the project’s consultation and participation plan. 99. Implementation Arrangement. IPBC, as Executing Agency for the project will have overall responsibility of planning, implementation and monitoring of activities related to the the proposed development package as well as the overall project. As the Implementing Agency, PPL has the responsibility to carry out day-to-day activities related to this. The relevant government agencies will support IPBC and PPL in implementation of the development package. 100. A Project Management Unit (PMU) will be established within PPL for implementing the project activities. PPL will provide several full-time PPL staff, including a lands officer. The project will finance consultants, etc. to support the PMU for implementing the project activities. The consultants will include social/resettlement safeguard specialists, who will assist PPL to update and implement safeguard plans, including this development package. 101. Budget and Financing Plan. The proposed development package is currently being drafted and will be finalized during the detailed design. The cost of the development package will be financed by the government. 102. Monitoring and Reporting. PPL will monitor the project activities including the development package. The scope of monitoring includes: (i) performance of the activities; (ii) approval, allocation and disbursements of funds; and (iii) remedial actions, as required. PPL will report the progress in implementation of the action plan through its semi-annual monitoing reports to ADB.
X. GENDER AND SOCIAL DIMENSIONS
103. Social. The project is targeting connection of 3,000 households in the poorer peri-urban villages of Port Moresby. Access to electricity will (i) reduce household chores (mainly women) for collecting firewood, (ii) replace kerosene lighting with a cheaper form of energy, thereby freeing household expenditure, (iii) enable household income generation, (iv) improve children education, (v) reduce indoor health and safety issues associated with burning firewood and
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kerosene, and (vi) enable street lighting which will reduce crime. The project is also expected to provide more reliable power supply to broader residential areas, including poor areas, in Port Moresby. Improved power supply will enhance quality of life of Port Moresby residents by: (i) reducing the regular power outages to residents, (ii) facilitate low-income families to engage in small-scale income generation activities, i.e. sale of cooked and refrigerated items (which is currently not possible due to the regular extended power outages which sometimes last for 2-3 days), (iii) improve street illumination to reduce crimes, and (iv) improve water supply to residents which is disconnected during regular extended power outages. 104. Gender. Key gender action items to be included under the project are listed in the Gender Action Plan below:
GENDER ACTION PLAN
Components and Outputs
Performance Targets and Activities Primary Responsibility
Output 1. Hydropower upgrade and rehabilitation
XI. (a) upgrade of Rouna 1 hydropower plant (6 MW), and
XII. (b) rehabilitation and upgrade of Sirinumu toe-of-dam hydropower plant (1.6 MW)
During design and implementation, all community consultations will have a target of 40% female participation.
Encourage the employment of women in labor-based work (at least 20%) and provide necessary institutional support for female labor-based workers such as separate sanitation facilities. Contractors appointed for construction will be informed of the required facilities before bidding.
Contractors will be required to pay equal wages to men and women for work of equal value.
Women’s wages will be paid directly to them.
Construction workers and community members of project sites will be provided training on HIV/AIDS issues.
PMU, CDGS PMU PMU PMU PMU, CDGS
Output 2. Upgraded distribution grid
(a) extension of the grid to an estimated additional 3,000 households, (b) upgrade of the existing distribution grid (11 kV) to an open loop mesh design and, (c) implementation of a loss reduction program.
Female headed households will be prioritized for connection in areas targeted for connection to the grid.
Undertake training workshops in newly connected communities (at least 50% female participation) on electricity safety, operation of prepayment meters, energy efficiency, and household utility budgeting.
Undertake training workshops in 5 communities (at least 50% female participation) on using electricity for increased income generation.
During design and implementation, all community consultations will have a target of 40% female participation.
Encourage the employment of women in labor-based work (at least 20%) and provide necessary institutional support for female labor-based workers such as separate sanitation facilities. Contractors appointed for
PPL, PMU, CDGS PMU, CDGS PMU, CDGS PMU, CDGS PMU
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construction will be informed of the required facilities before bidding.
Contractors will be required to pay equal wages to men and women for work of equal value.
Women’s wages will be paid directly to them.
PMU PMU
Output 3. Upgraded substation capacity
(a) one new Kilakila substation, (b) 6.1km transmission line (66 kV), and (c) retrofits to existing substations
During design and implementation, all community consultations will have a target of 40% female participation.
Encourage the employment of women in labor-based work (at least 20%) and provide necessary institutional support for female labor-based workers such as separate sanitation facilities. Contractors appointed for construction will be informed of the required facilities before bidding.
Contractors will be required to pay equal wages to men and women for work of equal value.
Women’s wages will be paid directly to them.
PMU, CDGS PMU PMU PMU
Output 4. Project Management Unit (PMU)
Project management services for efficient and effective project implementation. Includes capacity development activities through the design and supervision consultants.
Provide gender awareness training to all PMU/project staff.
Enhance capacity by PPL to include gender perspective into its operations through gender awareness training for PPL management: at least 50% of PPL management staff receives gender awareness training by 2016.
Provide training on gender awareness and HIV/AIDS for main contractors.
Establish all project performance indicators disaggregated by sex, collect them regularly, and include them in the baseline, progress, monitoring, and evaluation reports.
Establish a project performance system that includes indicators measuring implementation and progress of the gender action plan, together with all indicators in the DMF.
Include community development/gender specialist(s) in the project team who will manage implementation of the gender action plans.
Include at least one women member on the grievance redress mechanism committee.
PMU, CDGS PPL, PMU, CDGS (international) PMU, CDGS PMU, CDGS PMU, CDGS PPL, PMU PPL, PMU
Implementation Arrangements: The Project's GAP will be implemented by the project management unit (PMU) which will hire an international community development/gender specialist in the Project team. PPL will allocate a national specialist to assist on community development and gender issues. The specialists will be responsible for incorporating the GAP into project planning, implementation, and monitoring frameworks, including community consultations, awareness training, and establishment of sex-disaggregated indicators for project performance and monitoring. The PMU will include reporting on progress of GAP activities in quarterly progress reports on overall project activities to the ADB and the Government. ADB = Asian Development Bank, CDGS = community development/gender specialist, DMF = design and monitoring framework, GAP = gender action plan, PMU = Project Management Unit, PPL = PNG Power Ltd.
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XI. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION
A. Project Design and Monitoring Framework
Design Summary Performance Targets
and Indicators Data Sources and
Reporting Mechanisms Assumptions
and Risks
Impact PPL customers (residential and business) increase economic activities
Reduced unserved demand by 20% in Port Moresby by the end of 2016 (measured in MWh) against January 2013 baseline
PMU Quarterly Reports
Assumption
Improved power supply will encourage private sector and improve economic conditions.
Risk
Other external factors will act to prevent the private sector from expanding and benefiting from the improved power supply.
Outcome Better power supply for Port Moresby
Reduced duration of outages to customers
10
by 42% in Port Moresby by the end of 2016 against January 2013 baseline
PPL Annual Report
Assumption
PPL continue to manage grid effectively
Risk
Extended droughts effect hydropower utilization
Outputs 1. PPL rehabilitates hydropower capacity 2. PPL upgrades distribution system on Port Moresby grid
Targets relative to January 2013 baseline PPL installs capacity of 6 MW at Rouna 1 by end 2016 PPL rehabilitates Sirinumu Toe-of-dam hydropower plant to 1.6 MW by end 2015 CO2 emissions reduced by 12,000 tCO2e annually by end 2016 due to displaced diesel generation Installation of 30 km of 11 kV distribution grid by end 2016 PPL connects 3,000 additional low-income
PPL Annual Report PPL Annual Report PPL Annual Report PPL Annual Report PPL Annual Report
Assumption
Design and Supervision Consultants provide adequate detailed design
Risks
PPL reassign key technical staff
Land ownership and environmental issues delay feasibility studies and project implementation
Shortage of civil works contractors
Local civil works contractors have inadequate technical capacity
10
Measured by Customer Average Interruption Duration Index (CAIDI)
39
Design Summary Performance Targets
and Indicators Data Sources and
Reporting Mechanisms Assumptions
and Risks
3. PPL upgrades substation capacity 4. Efficient project management services
customers, including female headed households, to electricity by January 2017 Conduct community workshops (with at least 50% female participation) for all newly connected communities by December 2013 for capacity building on electricity safety, operation of prepayment meters, energy efficiency measures, and household household utility budgeting Undertake workshops (at least 50% female participation) in 5 communities by December 2013 on using electricity for increased income generation Construction of one new substation by end 2016 Construction of 6.1km double circuit 66kV transmission line by end 2016 Construction of either substation capacitors or statcom on two existing substations by end 2015 PMU meets annual target contract awards and disbursements Conduct training activities for PMU staff and PPL management, including gender
PPL Annual Report PPL Annual Report PPL Annual Report PPL Annual Report PPL Annual Report PPL Annual Report PPL Annual Report
40
Design Summary Performance Targets
and Indicators Data Sources and
Reporting Mechanisms Assumptions
and Risks
awareness training by January 2014
Activities with Milestones Inputs PPL rehabilitates hydropower capacity 1.1 Prepare design and bid documents by month 9 of each subproject 1.2 Undertake community consultations, including at least 30% women, by
month 9 of each subproject 1.3 Update the Rouna 1 due diligence report prior to award of civil works
contract 1.4 Tender and award of civil works contracts by month 16 of each subproject 1.5 Commence construction activities by month 16 of each subproject 1.6 Equipment delivered to site by month 27 of each subproject 1.7 Completion of civil works construction by month 42 of each subproject PPL upgrades distribution system on Port Moresby grid 2.1 Preparation of design and bid documents by month 4 2.2 Tendering and award of equipment packages by month 8 2.3 Contractor commence construction of distribution upgrades by month 12
of each subproject 2.4 Conduct community training workshops on electricity safety, operation of
prepayment meters, energy efficiency measures, and household household utility budgeting by month 12
2.5 Undertake workshops (at least 50% female participation) in 5 communities by month 12 on using electricity for increased income generation
2.6 Contractor complete construction of distribution upgrades by month 30 of each subproject
PPL constructs new substation capacity 3.1 Preparation of design and bid documents by month 7 3.2 Update the land acquisition/resettlement plan prior to contract award for
Kilakila substation 3.3 Tendering and award of design, procure and construct packages by
month 12 of each subproject 3.4 Contractor commence construction by month 15 of each subproject 3.5 Contractor complete construction by month 36 of each subproject Efficient project management services 4.1 PMU established within PPL by month 2 4.2 Short-listing of consultants by month 2 4.3 Establish grievance redress mechanism (including at least one women
member) by month 4 4.4 Award consulting contract by month 5 4.5 Fielding of consultants by month 6
Asian Development Bank (ADF) $15.0 million Asian Development Bank (OCR) $51.7 million Government $16.3 million
ADB = Asian Development Bank, MWh = megawatt-hour, PMU = Project Management Unit, PPL = PNG Power Ltd. Source: Asian Development Bank.
B. Monitoring
105. Project performance monitoring. The PMU will prepare quarterly monitoring reports, including disaggregated baseline data for output and outcome indicators. The quarterly reports
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will provide information necessary to update ADB's project performance reporting system. The twice annual loan reviews and the quarterly monitoring reports will include environmental and social safeguard monitoring reports.
106. Compliance monitoring: In addition to the standard assurances, compliance with the specific assurances will be monitored. Implementation of covenants will be (i) summarized in the PMU quarterly progress reports, (ii) discussed during PSC meetings, and (iii) reviewed during biannual loan review missions.
107. Safeguards monitoring: Environment and social safeguards will be monitored by international and national specialists within the Project Management Unit, in accordance with the initial environmental examination and the resettlement plan. The results of the safeguard monitoring will be reported in the PMU quarterly reports. Additionally, the twice annual review missions will report on safeguard compliance.
108. Gender and social dimensions monitoring: The Project's GAP will be implemented by the project management unit (PMU), supported by an international social/gender specialist. PPL will allocate a national specialist to assist on community development and gender issues. The specialists will be responsible for monitoring activities in accordance with the GAP. The PMU will include reporting on progress of GAP activities in quarterly progress reports on overall project activities to the ADB and the Government.
C. Evaluation
109. ADB and the EA will conduct twice annual reviews throughout the implementation of the project as well as a mid-term loan review for project. The review will monitor (i) project output quality, (ii) implementation arrangements, (iii) implementation progress, and (iv) disbursements. Within 3 months of physical completion of the Project, the EA will submit a project completion report to ADB.11
D. Reporting
110. PPL will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated procurement plan and (d) updated implementation plan for next 12 months; and (iii) a project completion report within 6 months of physical completion of the Project. To ensure projects continue to be both viable and sustainable, project accounts and the executing agency audited financial statements, together with the associated auditor's report, should be adequately reviewed.
E. Stakeholder Communication Strategy
1. Introduction 111. This stakeholder communication strategy describes the purpose, method and outputs of consultation and participation with stakeholders during the process of implementation of Port Moresby Power Grid Development Project (the Project), inclusive of all six subprojects. It also
11
Project completion report format is available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-Sector-Landscape.rar
42
presents the budget and other relevant information. This plan covers the requirements for consultation and participation in implementation phase as prescribed in Asian Development Bank (ADB) Safeguard Policy Statement (SPS) 2009 and Public Communications Policy 2011. 2. Purpose 112. The consultation and participation plan (C&PP) provides a mechanism whereby PPL and other relevant government agency staff, implementation and supervisory consultants, primary beneficiaries and other stakeholders (such as civil society organizations and the like) can exchange their views, ideas and suggestions with regard to project implementation including monitoring. More specifically, the C&PP is aimed at achieving compliance requirements as per PNG law, ADB’s SPS, PCP and that of PPL’s Policy statement on management of transmission lines. The C&PP activities will also provide inputs in the preparation of compliance documents, monitoring and progress reports for circulation to PPL, Independent Public Business Corporation (as the executing agency), and ADB.
113. The C&PP will be checked, verified and fully up-dated by PPL after finalization of subproject designs as well as time plan for their implementation which will be forwarded for approval by ADB before project commencement. The process of up-dating of the C&PP will be the responsibility of safeguard consultants and officials working in PPL’s Project Management Unit (PMU), who will undertake comprehensive checks to determine whether all stakeholders (both types and numbers) have been included in the plan, costing and timelines for implementation.
3. Outputs 114. The C&PP has three main outputs. First, it provides a basis to inform stakeholders about project, its activities, how they benefit from project, potential impacts and other relevant information. Second, C&PP is a mechanism whereby stakeholders are able to provide feedback with regard to social and environmental impacts, mitigation measures and other issues relating to project implementation. Third, C&PP is a mechanism to check and verify environmental and socio-economic data and information from stakeholders to support the up-dating and implementation of resettlement plan (RP), initial environmental examinations (IEE), other plans and strategies, thereby facilitate project implementation.
115. The C&PP is integrated with other related documents such as RP, grievance redress mechanism (GRM), and the environmental management plan (EMP) developed from the IEEs and gender action plan (GAP).
116. The PPL will make appropriate arrangements to disclose the C&PP in an accessible place and language to stakeholders in advance prior to construction work commencing. All ward councillors will be given a briefing on C&PP and copies made available to them for information and own follow up with beneficiaries.
117. There will be at least one well-informed and widely publicized public consultation event in respect of each of the six sub-projects. Follow-up events will be undertaken in the areas of the sub-projects which are expected to have a higher level of impacts i.e. (i) Kilakila substation and transmission line, (ii) Rouna 1 hydro-power plant, and (iii) Sirinumu toe of dam hydropower rehabilitation. Although the subprojects will not have any significant impacts on the community or the environment, the people will be adequately informed of planned upgrading and rehabilitation works so that there will be a wider community understanding and support to
43
subprojects. It will be the responsibility of PMU to assess requirements for public participation and thereby take the leadership to organize events. The consultations will also inform the people and to seek their feedback on activities that will be implemented either by the subproject or by other government agencies, to improve their livelihoods. 118. The consultation events will be well-publicized using both notices displayed to community posts as well as notice published in the Newspapers for information of affected people including women and organizations. PPL will use its own funds for publication of notices in print media. 4. The Stakeholders and Impacts 119. The purpose of all six subprojects is to improve reliability and deliver quality power to customers in Port Moresby. It is to be highlighted that improvement in quality and reliability is a result of activities under all of six subprojects and it is therefore not necessary to identify beneficiaries of any individual subproject. Rather, it is the combined investments of all the subprojects that will lead to the improvement in quality of power delivered in Port Moresby. It is however, to be noted that some subprojects such as loss reduction and open-loop mesh will be beneficial to commercial and heavy power users such as big industries, hospitals, etc. 120. The broad categories of stakeholders within the project area who will benefit from the six subprojects are listed below.
PNG Power Limited (the main stakeholder);
Government agencies / facilities including the EA, schools, hospitals, Municipality, etc. who will benefit from improved power supplied to them
Private businesses, small, medium and large, all of which will benefit
Householders including female-headed, throughout Port Moresby area who will have access to quality and reliable source of power
Civil society and mass organizations such as churches and other religious organizations, nongovernment organizations, etc. who will also benefit from power improvement
121. In addition, households and organizations in and around Sirinumu and Rouna are an important group of stakeholders for this project. The public consultations and other assessments conducted during project design clearly indicate the necessity to engage householders, clan leaders and other organizations in the above mentioned areas.
122. The land owners along transmission line from the new Kilakila substation are an affected party. They belong to three clans namely, Vaga, Yarogha and Enehako. The Vaga clan occupies land in transmission line and substation while the other two are owners of the land where the angle-tower is located. The RP includes measures to address land acquisition and compensation aspects. The other affected party are urban people around Port Moresby who may experience travel disturbances and other inconveniences during construction. As noted in the IEEs dust, noise, transport difficulties, etc. will be a nuisance which however will be temporary and can be mitigated through implementation of the measures set out in the EMP. The final group of people who will experience adverse impacts are previous land owners and other households in and around Raona and Sirinumu who will also undergo temporary disturbances similar to those living in the City. In addition to the RP required, the EMPs will include various measures – including health and safety plans and traffic management plans – to
44
address negative impacts. 5. Stakeholder Engagement 123. Each consultation will be well-informed and notified in advance, properly planned and will follow through a comprehensive agenda. After introducing participants, subproject activities will be presented clearly and in a manner they understand easily. The discussion forum will be open where participants are encouraged to air their questions and concerns. A particular emphasis is made to engage and air views and concerns of affected and beneficiary women. A summary of the issues raised and agreement reached together with future steps will be presented at the end. All questions, concerns and comments raised and answers given by resource persons will be documented. 124. It is proposed to conduct public consultations both just prior to (detailed design of subprojects) and prior to and during the construction and rehabilitation works. The consultations will focus on informing affected people details about each subproject, including what is being planned, potential impacts from the activities and how PPL proposes to mitigate and/or avoid the impacts. The consultation will also inform people on the GRM and highlight where they can get further assistance with regard to project implementation issues, as well as how issues they raise will be responded to.
125. The consultations have the purpose of informing affected people of progress of work, issues affecting implementation and to obtain their feedback and/or suggestions to further strengthen the mitigation of adverse impacts as well as to solicit their support for project implementation.
126. The participants for consultations in Sirinumu subproject include 12 Directors of Sirinumu Development Company, clan leaders in the area and households from about 10 villages around the reservoir who may have some impacts on them. The affected people belong to about 15 clans. Households from two villages near the dam namely Manamero and Nainumu-2, will be invited to attend the consultation as the impacts on them would be the most. The Kilakila substation and transmission line will include Vaga land owners, Yarogha, and Enehako clans. The consultations for Rouna 1 should include the paramount chief of Omani clan, clan leaders and households from the 10 villages around the area. 127. Discussions with clan leaders and the consultations undertaken during the project preparation suggest that stakeholders require PPL to consult them and they would be happy to engage with the project, and actively participate in subproject implementation, if they are consulted and are given the opportunity. It is to be noted that the need for consultation with villagers around Sirinumu reservoir is one of the main recommendations of the study on Sirinumu Valley by the National Research Institute.
128. The type of public consultations and the number of participants are summarized in Table 1 below.
Table 1: Participants and Locations of Consultations by Subproject
Subproject Participants
Kilakila substation and transmission line
Affected land owners of Vaga, Yarogha and Ehenako clans
Others i.e. Christian Group, Kilakila Development
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Subproject Participants
Association, youth leader, women leader
Rouna 1 Hydropower
Omani and Nareme Clan leaders
Village leaders
Households
Others i.e. pastor, youth leader, women leader
Sirinumu Hydropower
SIDCO Directors
Clan leaders
Households
Others, i.e. reps of youth/women/ pastor
6. Stakeholder Engagement in Assessment 129. Several assessments as appropriate will be undertaken to ensure that national and ADB’s safeguards are met. These assessments will be undertaken by the PMU. The purpose of assessment during implementation is to check, verify and confirm information collected during preparation, disclose the finalized/updated documents and ensure they are properly implemented and then monitored. The assessments will produce the updated C&PP itself, RP, IEE, GAP and other compliance documents prepared during design phase. 130. In the case of subprojects with land acquisition and resettlement impacts, the RP prepared during PPTA will be updated. For updating the IEEs, consultations will follow the format established during the preparation and can be held in conjunction with those being arranged for the RP and social assessment. The type of respondents for social and environmental assessments and the proposed sample size are summarized in the Table below.
Table 2: Details of Stakeholders for Assessments
Stakeholder Category
Who & Where Type of Assessment
Households with land acquisition impacts
Affected families in Kilakila village (Vaga clan)
Affected families near Magi H’way
Census of all affected land owners along TML and substation
Socio-economic survey of affected HHs
Detailed Measurement survey of all affected land (structures are not affected)
FGDs involving affected land owners, one each clan inclusive of gender
IEE
Households and groups with other impacts
Sirinumu (about 10 villages); Rouna (about 20 villages)
Meetings and FGDs with leaders and HHs, inclusive of women IEE
7. Roles and Responsibility 131. The details of affected people and environments by their locations will be identified. Assessments as appropriate will be conducted of the affected parties. PPL will be responsible for conducting public consultations including their arrangement, inform participants (affected persons and officials), provide publicity, provide the venue and facilitate the meetings and discussions etc. The PMU’s safeguard team will assist and facilitate the entire process,
46
including but not limited to prepare agenda for the meeting, keep a record, and clarify any relevant matters in keeping with ADB’s policies and guidelines on conducting public consultations. The safeguard team members will also maintain a record of attendance and capture a few photographs of each event for record. The meeting will discuss subproject activities, impacts, mitigation measures and the GRM. A full record on assessment and consultations will be prepared for inclusion in progress reports, updated assessments (RP and IEEs) as well as for future reference. The safeguard team members will also develop and present to PPL for approval all guidelines, questionnaires and check-lists. 132. The government agencies that will be actively engaged in the capacity of resource persons during consultation and their roles are presented in Table 3.
Table 3: Government Agencies and their Role in Consultation Process
Agency Participants (suggested)
Role
IPBC Representative Answer policy questions as project EA
PPL - Manager, Strategic Planning;
- Manager, Land & Community Service Division
- Safeguards specialists
Main role for public consultation lies with PPL. It includes: safeguards requirements, consultative process and procedures, invite participants (affected people and agencies), organize venue, publicity, chair and conduct proceedings, answer implementation questions, close the meeting, and disseminate outcome among participants and follow up; closing the consultation includes a summary of recommendations for further action
Lands & Physical Planning Department
Deputy Secretary (Customary Lands) or representative
Provide information, clarifications, answer specific questions on customary land matters
Department of Environment & Conservation
Representative(s) from Environmental Protection Division
Clarify permit processes, clarify water resources issues, publicize assessments and facilitate discussion on assessments and permitting
National Capital District Commission
Deputy City Managers or representative (Regulatory & Community Services), relevant Ward councillors
Advice on relevant processes for acquisition of land and other regulatory matters. Ward councillors will advice and inform all affected people and organizations on an on-going basis
Central Province, Lands & Physical Planning Department
Administrator (or Representative)
Advice on land issues relating to Central province (Consultations for Sirinumu and Rouna only)
Provincial Affairs (LLG)
Director or representative
Answer questions, follow up matters (Consultations for Sirinumu and Rouna only)
8. The Budget 133. The budget for the implementation of C&PP excludes salaries of safeguard specialists as they are included either through PPL salaries or as part of the consultant’s costs. The budget includes estimates for vehicle hire, publicity, hire of venue and refreshments. The approximate cost for consultations is estimated as 24,500 kina as presented in Table 4. The cost does not include salaries of safeguard team members and PPL staff as these costs will be included in the overall project budget.
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Table 4: Cost for Implementation of Consultation & Participation Plan
9. Consultation Schedule 134. The actual time for each consultation depends on the time plan for implementation of each subproject. An up-dated plan will be produced when details of implementation of each subproject is finalized. In addition to formal public consultations described in C&PP, stakeholders including beneficiaries are encouraged to air their concerns and raise issues on an on-going basis via other mechanisms such as GRM, EMP, and GAP and to contact with PMU staff, if required. Safeguard staff will explain these mechanisms to participants at the time of public consultations and assessments for their information and follow up.
XII. ANTICORRUPTION POLICY
135. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the Project.14 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all Project contractors, suppliers, consultants and other service providers. Individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the Project.15
136. To support these efforts, relevant provisions are included in the loan agreement and the bidding documents for the project. Additionally, the PNG Government and PPL will (a) comply with ADB’s Anticorruption Policy (1998, as amended to date), and cooperate fully with any investigation by ADB and extend all necessary assistance, including providing access to all relevant books and records for the satisfactory completion of such investigation; (b) ensure that relevant PPL staff are trained in ADB’s Anticorruption Policy; (c) ensure that the audited annual project accounts under the project, project progress, and procurement activities are disclosed on the PPL website; and (d) allow and facilitate ADB’s representatives to conduct spot and random checks on (i) flow of funds, and their use for the projects in accordance with the legal agreements; (ii) work-in-progress; and (iii) project implementation under the project.
12
This is the rate used in the design phase. The actual cost may be cheaper as all cost is provided by PPL 13
Two public consultations each for Sirinumu, Rouna and Kilakila and 2 more consultations for all other subprojects. Each consultation to include 50 participants, resource persons+APs+facilitators. Each FGD to include a maximum of 6 participants. Rouna will have one FGD with each of the 2 main clans, Sirinumu one, Kilakila three, one each with Vaga, Yarogha and Inehako, and the 7
th FGD with affected parties in the 2
nd substation
14 Available at: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf
15 ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp
Item Unit Cost Item Cost (Kina)
Transport 300 kina12
x 25days 7,500 Refreshments for participants
13 in public
consultations and FGDs (8 consultations x 50 people+7 FGD sessions x 6 participants)
20 kina x 450 (rounded) people
9,000
Fuel cost Allow 3,000 Newspaper advertisements 7 events x 500 kina 3,500 Miscellaneous (stationery, phone, Internet)
1,500
Total 24,500
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XIII. ACCOUNTABILITY MECHANISM
137. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.16
XIV. RECORD OF PAM CHANGES
Date Changed Section Changed Changes made
1.
2.
3.
4.
5.
6.
16
For further information see: http://www.adb.org/Accountability-Mechanism/default.asp.