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Project Number: 49021-002 Loan Number: LXXXX November 2017

People’s Republic of China: Heilongjiang Green Urban and Economic Revitalization Project Investment Project Components (Section A)

Project Administration Manual

ABBREVIATIONS

ADB – Asian Development Bank BDS – business development services CDM – capacity development module DMF – design and monitoring framework EIA – environmental impact assessment EIB – European Investment Bank EMP – environmental management plan EPB – environment protection bureau ESMS – environmental and social management system FIC – financial intermediation component FMA – financial management assessment FSR – feasibility study report GAP – gender action plan GHG – greenhouse gas GRM – grievance redress mechanism HFD – Heilongjiang Finance Department HMG – Hegang Municipal Government HPG – Heilongjiang Provincial Government ICB – international competitive bidding ICS – individual consultants selection ITS – intelligent transport system JMG – Jixi Municipal Government LAR – land acquisition and resettlement MOF – Ministry of Finance MOFA – Ministry of Foreign Affairs NCB – national competitive bidding NDRC – National Development and Reform Commission NMT – nonmotorized transport O&M – operation and maintenance PAM – project administration manual PCA – procurement capacity assessment PCC – project completion certificate PMC – project management consultant PMO – project management office PPMS – project performance management system PRC – People’s Republic of China QCBS – quality- and cost-based selection QMG – Qitaihe Municipal Government RRP – report and recommendation of the President SCADA – supervisory control and data acquisition SCS – startup consulting service SGAP – Social and Gender Action Plan SMEs – small- and medium-sized enterprises SMG – Shuangyashan Municipal Government SOE – statement of expenditure SPS – Safeguard Policy Statement TVET – technical and vocational education and training WTP – water treatment plant WWTP – wastewater treatment plant

WEIGHTS AND MEASURES

ha – hectare km – kilometer m – meter m2 – square meter m3/d – cubic meter per day

CONTENTS

I. PROJECT DESCRIPTION 1

II. IMPLEMENTATION PLANS 9

A. Project Readiness Activities 9 B. Overall Project Implementation Plan 10

III. PROJECT MANAGEMENT ARRANGEMENTS 14

A. Project Implementation Organizations: Roles and Responsibilities 14 B. Key Persons Involved in Implementation 18 C. Project Organization Structure 19

IV. COSTS AND FINANCING 20

A. Cost Estimates Preparation and Revisions 20 B. Key Assumptions 20 C. Detailed Cost Estimates by Expenditure Category 23 D. Allocation and Withdrawal of Loan Proceeds 24 E. Detailed Cost Estimates by Financier 26 F. Detailed Cost Estimates by Outputs 27 G. Detailed Cost Estimates by Year 29 H. Contract and Disbursement S-curve 30 I. Fund Flow Diagram 31

V. FINANCIAL MANAGEMENT 32

A. Financial Management Assessment 32 B. Disbursement 33 C. Accounting 35 D. Auditing and Public Disclosure 35

VI. PROCUREMENT AND CONSULTING SERVICES 36

A. Advance Contracting and Retroactive Financing 36 B. Procurement of Goods, Works, and Consulting Services 37 C. Procurement Plan 38

D. Consultant's Terms of Reference 49

VII. SAFEGUARDS 82

VIII. GENDER AND SOCIAL DIMENSIONS 88

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 94

A. Project Design and Monitoring Framework 94 B. Monitoring 97 C. Evaluation 99 D. Reporting 99 E. Stakeholder Communication Strategy 100

X. ANTICORRUPTION POLICY 101

XI. ACCOUNTABILITY MECHANISM 101

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 101

Project Administration Manual Purpose and Process

The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with the policies and procedures of the government and Asian Development Bank (ADB). The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. For this project two PAMs were developed to better serve the two distinct component types of the project and the respective parties involved: (i) Project Administration Manual: Investment Project Components (Section A) to be referred to as PAM (Section A), which is this PAM (Section A); and (ii) Project Administration Manual: Financial Intermediation Component and Business Development Services Subcomponent (Section B) to be referred to as PAM (Section B). The Heilongjiang Provincial Government (HPG), the executing agency; and the four implementing agencies: the Hegang Municipal Government (HMG), Jixi Municipal Government (JMG), Qitaihe Municipal Government (QMG), and Shuangyashan Municipal Government (SMG); are wholly responsible for the implementation of ADB-financed projects, as agreed jointly between the borrower and ADB, and in accordance with the policies and procedures of the government and ADB. ADB staff is responsible for supporting implementation including compliance by HPG, HMG, JMG, QMG, and SMG, of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.

1. 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.

2. After ADB Board approval of the project's report and recommendations 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.

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I. PROJECT DESCRIPTION A. Rationale 1. The project cities share a border with the Russian Federation to the east and to the north, and have a combined population of 5.2 million. They were important bases for coal-mining and electricity production in the PRC particularly between 1949 and 2013.1 Their fundamental reliance on coal mining and related industries made their economies vulnerable, especially when coal prices dropped steeply in 2013. Changing global and domestic energy and climate change policies also contributed to rapid economic decline, wage reductions, unemployment, urban poverty, and population loss in the project cities.2 In 2014, the project cities had a per capita gross domestic product that was 33% lower than the average rate in Heilongjiang Province, which in turn was 16% below the national average. Economic revitalization is challenging because of the lack of (i) effective programs for SME development, (ii) SME financing for investments and longer-term working capital, (iii) investments in competitive products and research and development, (iv) capacity to develop and expand businesses, (v) strategic workforce development, and (vi) attractive urban environments and services. A further challenge to strengthening the private sector is a long tradition of large state-owned enterprises dominating the local economies. 2. The project cities suffer from environmental degradation (pollution of soil, water, and air) caused by more than 60 years of coal mining. This, along with inadequate urban infrastructure and services—e.g., water supply, wastewater management, drainage, and district heating systems—makes for poor livability. Key missing links in the road network lead to detours and traffic congestion, especially in Shuangyashan. Project cities lack adequate road maintenance, public transport, bus lanes, bus stops, and sidewalks; and urgently need road rehabilitation. Some rivers, especially in Hegang and Jixi, flood during heavy storms, have narrow channels, and are polluted by sediments and untreated discharge of domestic and industrial wastewater.

3. Value added by Asian Development Bank assistance. ADB helped identify and comprehensively address key economic development challenges through non-coal diversification, and sustainable and inclusive private sector development and job creation. It mobilized cofinancing to tackle public funding shortages, enabling a holistic investment project that will generate cross-sector synergies. It prepared a diversification road map and an SME development and financing program to leverage ADB funds and strengthen the local finance sector.3 It prepared initial mining remediation strategies and identified pilot projects to improve the environment and public health, and initiate a transformation from a negative image as dirty coal cities to clean and green cities. ADB identified key needs for urban infrastructure and services improvement, to help retain and attract people, companies, and jobs. ADB assessed climate risk and vulnerability, and proposed adaptation measures to help make the project cities more resilient to climate change. 4. Strategic fit. The project builds on more than 20 years of partnership between ADB and Heilongjiang Province, including several strategic priority projects, such as, reducing pollution and flood risk in the Songhua River Basin involving both public and private sectors support. 4 The

1 Heilongjiang Provincial Government. 2016. Heilongjiang Statistical Yearbook, 2015. Harbin. 2 After 255,000 people out-migrated during 2010–2015, the population declined by 4.7%. 3 Finance sector development includes (i) developing the capacity of local commercial financial intermediaries in green

financing, (ii) facilitating medium- to longer-term SME project financing and reducing collateral requirements, and (iii) strengthening capacity in cash-flow-based lending and risk management for SMEs.

4 ADB. 2003. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People’s Republic of China for the Harbin Water Supply Project. Manila (Loan 1995-PRC, completed); ADB. 2002. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People’s Republic of China for the Songhua River Flood Management Sector Project. Manila (Loan 1919-PRC, completed); ADB. 2008. Report and

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project is part of a renewed commitment to support government strategies to revitalize the PRC’s economically challenged northeastern region. Through its strategic and holistic approach, the project will support the (i) Thirteenth Five-Year plans of the governments of the PRC, Heilongjiang Province, and project cities to transform the economy and improve financing of new industries and SMEs;5 (ii) Transformation Development Planning of Coal Cities in Heilongjiang Province, 2014–2020 by assisting SMEs in non-coal pillar industries, including green food processing, graphite high-tech materials and products, machinery, tourism, trade, and logistics; and (iii) National New-Type Urbanization Plan, 2014–2020 by strengthening small- and medium-sized cities.6 The project aligns with ADB policies, including the (i) Midterm Review of Strategy 2020, through knowledge provision, support for the development of the private and finance sectors, and increased partnership-based cofinancing and operations;7 (ii) country partnership strategy for the PRC, 2016–2020, by supporting socially inclusive, environmentally sustainable, and economically competitive urban development; 8 and (iii) urban, water, and finance sector and sustainable transport initiative operational plans; and environment operational directions.9 B. Impact and Outcome 5. The project is aligned with the following impacts: (i) economy revitalized and diversified, and non-coal industries in the cities of Hegang, Jixi, Qitaihe, and Shuangyashan developed; and (ii) living environment, safety, and public health in cities of Hegang, Jixi, Qitaihe, and Shuangyashan improved (footnote 8). The project will have the following outcome: non-coal economic activities and urban livability in project cities increased. 6. Through its comprehensive urban and economic revitalization approach, the project is expected to help stop and reverse the out-migration of the younger qualified workforce and attract and retain residents and companies to more attractive project cities. The project will directly benefit 2.73 million urban residents through (i) stronger SME competitiveness and jobs creation in improved non-coal industrial parks; (ii) improved environment and public image through mining remediation; (iii) improved water supply, sewerage, district heating, flood protection, roads, road safety, and public transport; (iv) greater environmental and traffic safety awareness through public education programs; and (v) increased cooperation between project cities in tourism promotion, logistics and trade, supply chain integration, and SME support using smart city applications.

Recommendation of the President to the Board of Directors: Proposed Loan to the People’s Republic of China for the Songhua River Basin Water Pollution Control and Management Project. Manila (Loan 2487-PRC, completed).

5 Government of the PRC, State Council. 2015. National Economy and Social Development Thirteenth Five-Year Plan, 2016–2020. Beijing; Heilongjiang Provincial Government. 2016. Thirteenth Five-Year Plan. Harbin; Municipal Government of Hegang. 2016. Thirteenth Five-Year Plan. Hegang; Municipal Government of Jixi. 2016. Thirteenth Five-Year Plan. Jixi; Municipal Government of Qitaihe. 2016. Thirteenth Five-Year Plan. Qitaihe; Municipal Government of Shuangyashan. 2016. Thirteenth Five-Year Plan. Shuangyashan.

6 Government of the PRC, State Council. 2014. National New-Type Urbanization Plan, 2014–2020. Beijing. 7 ADB. 2014. Midterm Review of Strategy 2020: Meeting the Challenges of a Transforming Asia and Pacific. Manila. 8 ADB. 2016. Country Partnership Strategy: Transforming Partnership: People’s Republic of China and Asian

Development Bank, 2016–2020. Manila. 9 ADB. 2013. Urban Operational Plan, 2012–2020. Manila; ADB. 2011. Water Operational Plan, 2011–2020. Manila;

ADB. 2013. Environment Operational Directions 2013–2020: Promoting Transitions to Green Growth in Asia and the Pacific. Manila; ADB. 2010. Sustainable Transport Initiative Operational Plan. Manila; ADB. 2011. Financial Sector Operational Plan, 2011–2020. Manila.

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C. Outputs 7. The project will have five outputs. Detailed descriptions are included in the design and monitoring framework (Appendix 1) and in the project administration manuals (PAMs).10 8. Output 1: Capacity in business development services and integrated project planning and management developed. This output will support project management and capacity development to ensure successful diversification and project sustainability in areas of (i) project planning, procurement, and financial management; (ii) BDS for SMEs and local SME bureaus; (iii) human resources and skills development; (iv) smart city cluster cooperation; (v) mining remediation planning and implementation; (vi) flood risk management, climate resilience, and sponge city planning;11 (vii) water, wastewater, and drainage system design, construction, and operation; and (viii) sustainable urban and public transport management and road safety. 9. Output 2: Sustainable small- and medium-sized enterprises investment and access to finance in project cities improved. The project will establish an SME financing platform, using the FIC, to mobilize domestic financing.12 The platform will offer (i) cofinancing loans for SME investments by financial intermediaries in which the ADB loan component is subordinated in return for longer-term project loans, (ii) a first-loss cash collateral facility to mobilize commercial guarantees and ease access to commercial financing for investments and longer-term working capital of up to 3 years,13 and (iii) entrusted loans for high-priority projects for local governments. The FIC will be linked to the BDS subcomponent (output 1). 10. Output 3: Key infrastructure and small- and medium-sized enterprises facilities in non-coal industrial parks in project cities constructed. The project will build and make operational key infrastructure and facilities, including (i) roads with advanced safety features and associated utility pipes; (ii) industrial wastewater treatment plants (WWTPs); and (iii) multifunction facilities for SMEs and start-ups, as well as for training and business services. 11. Output 4: Remediation and environmental cleanup from mining impacts in project cities improved. The project will develop mining remediation strategies, prepare investment plans, and implement pilot demonstration projects as models for replication. In Hegang, an open-pit mine will be remediated involving grading, clay lining, topsoil cover, vegetation, environmental management, and monitoring. The site will be reclaimed, made accessible and reused as a park and for light industry. In Jixi, a former mining area and waste-rock dumpsite, will be afforested, and a subsidence monitoring center will be built and operated.14 In Qitaihe and Shuangyashan, waste-rock dumpsites and subsidence areas will be remediated and reused as open spaces.

10 Project Administration Manual: Investment Project Components (Section A) [PAM (Section A)], and Project

Administration Manual: Financial Intermediation Component and Business Development Services Subcomponent (Section B) [PAM (Section B)] (accessible from the list of linked documents in Appendix 2).

11 Sponge city is a concept of comprehensive urban water resources management, in which greenways, parks, and wetlands maximize ecosystem services, including stormwater management, using ecosystems-based adaptation.

12 Output 2 will be implemented through subprojects by SMEs, selected according to criteria described in PAM (Section B). The financial intermediation modality is most appropriate for aggregate projects facilitating diversification to non-coal industries through SMEs, for which financing requirements are not large enough to allow direct lending by ADB.

13 The cash collateral facility will cover (i) first loss of 20% for a guarantee company to assume risk for 80% of SME loan exposure and thus facilitate longer-term (3–5 years) debt financing by local financial intermediaries, and (ii) straight loans for higher-risk project loans in priority sectors.

14 Subsidence is lateral or vertical ground movement and failure caused by the underground coal mines.

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12. Output 5: Integrated urban infrastructure and services in project cities improved. This output will enhance urban livability and attractiveness through improved, spatially integrated infrastructure and services: (i) Hegang—river rehabilitation, drainage system, sustainable urban and public transport, urban greening, and district heating; (ii) Jixi—integrated improvements to the core area of Hengshan District and West Jixi, including river rehabilitation, urban roads, water supply, wastewater management, and drainage system; (iii) Qitaihe—water supply, wastewater system, and public transport system improvements; and (iv) Shuangyashan—sustainable urban transport by building key missing road links, water supply, sewerage, and drainage systems. More specifically:

(i) Hegang. Integrated infrastructure focuses on river rehabilitation, drainage, sustainable transport, urban greening, and district heating. Four rivers will be rehabilitated and flood protection standard will be increased to 1 in 50-year flood events for Shitou River, Heli River, and Xiaoheli River (total 16.6 kilometers [km]), and to 1 in 20-year flood events for Qianjin Creek (3.3 km). District heating systems energy efficiency will be improved through retrofitting 7.2 km of primary and 65.2 km of secondary aging and leaking pipes. Sustainable transport improvements include road rehabilitation with introduction of bus lanes, improved bus stops, pedestrian sidewalks, intersections, street greening, and associated drainage pipes with a total of 34.3 km of existing inner city roads, and intelligent transport system equipment at 50 bus stops and signal control, traffic safety improvements, and road maintenance equipment.

(ii) Jixi. Improvements to urban livability, integrated infrastructure, urban environment, and public facilities will focus on the core area of Hengshan District and West Jixi. Two rivers, Huangni River and Anle Creek; with a total length of 8.7 km will be rehabilitated and flood standard improved to a 1 in 20-year flood events for Huangni River and 1 in 30-year flood events for Anle Creek, and Hongqi Lake (23.5 hectares [ha]) will be rehabilitated. The water supply system will be rehabilitated, including upgraded water intake (84,000 cubic meters per day [m3/d]), upgraded water treatment plant (WTP) (50,000 m3/d), new advanced treatment units (80,000 m3/d), and sludge treatment facility. Water supply pipes will be retrofitted to reduce leakage (total length 72.5 km). Sanitary sewer pipes with a total length of 23.3 km, and one pump station will be built. New drainage pipes of 12.5 km; drainage trench of 20.0 km, 3 pump stations, and 5 sedimentation tanks to collect, treat, and discharge rain water will be built. In Hengshan District, roads with a total length of 2.2 km will be constructed, along with pedestrian and vehicular safety improvements. A public park and plaza with 3.2 ha will be created with a public training center for technical education and training, mining remediation monitoring and training, public technical library, and associated amenities with 18,000 square meters (m2) area.

(iii) Qitaihe. Urban public service improvements will focus on water supply system and public transport. The water supply system will be improved including rehabilitation and upgrading of two WTPs with design capacities of 100,000 m3/d and 50,000 m3/d, and upgrade of water intake at Taoshan reservoir. The distribution system will be improved replacing 17.8 km old main pipes, installing 73.2 km of new main pipes, and building booster pump stations. The project will also support nonrevenue water reduction with two pilots in the early implementation stage. Later it is planned to upscale nonrevenue water reduction using lessons from pilots involving about 100 communities complementing a government-financed program.

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Public transport improvements will include acquisition of 209 electric buses, construction of three bus terminals with charging stations, complementing city programs implementing bus priority lanes and bus stop upgrades on key routes, and smart city public transport applications.

(iv) Shuangyashan. Urban livability and integrated urban infrastructure improvements

include supporting utility system upgrading and expansion, and improving sustainable urban transport. Water supply main pipes (24.7 km), 2 new pump stations, and 3 water tanks will be built, improvements at the WTP, new laboratory, flow meters at key intersections, and a supervisory control and data acquisition (SCADA) system will be installed, complementing a city program to reduce nonrevenue water. Sewer and drainage networks will be improved with the construction of 85.1 km sewers and installation of 69.6 km of drainage pipes. Sustainable urban transport system improvement includes construction of key missing road links from the urban core area to the ring road and a missing section of the ring road with a total length of 6.7 km improving public transport routing, nonmotorized and vehicular circulation, and traffic safety.

13. Detailed information on outputs is in the following tables.

Table 1: Output 3: Key Infrastructure and Small- and Medium-Sized Enterprises Facilities in Non-Coal Industrial Parks in Project Cities Constructed

Item Subcomponent Brief Description

Hegang

HG 3.1 Hegang industrial park (green food, green energy, and high-tech)—infrastructure and multifunctional SME support facilities

Three roads in the park will be built (about 6.3 km), and associated utility pipes and cables will be installed, including 6.3 km each of water supply pipes; drainage pipes; sewer pipes; and heating pipes. An SME service and training center and park management building (8,000 m2) will be constructed.

HG 3.2 Hegang Luobei County industrial park (high-tech graphite-based materials and e-mobility)—WWTP and treated wastewater reuse pipe

A WWTP with 6,000 m3/d capacity to treat wastewater from graphite materials processing and production process will be constructed. After treatment, the wastewater will be reused for the park.

Jixi

JX 3.1 Hengshan District industrial park (high-tech graphite-based materials and e-mobility)—road infrastructure and SME support facilities

The old phase I ring road (about 3.0 km) will be rehabilitated and upgraded, and a new road, the middle ring road (1.3 km), will be constructed, including utility pipes.

JX 3.2 Jiguan District industrial park (non-coal SMEs)—WWTP and sewer pipes

A new WWTP (20,000 m3/d) and associated wastewater collection pipes (8.84 km, DN300-800) will be constructed and commissioned.

Qitaihe

QH 3.1 Qitaihe industrial park (green food and pharmaceutical bio-fermentation)—road infrastructure and SME support facilities

Two roads with total length of 2.1 km, and associated utility pipes and cables will be constructed. An SME training and service center and an SME business center with a total area of 12,000 m2 will be built.

Shuangyashan

SY 3.1 Shuangyashan business park (non-coal SME and PRC-Russia business and trading park)—road and utility infrastructure and SME support facilities

Four roads with a total length of around 5.7 km inclusive of associated utility pipes and cables will be constructed, and additional 4.4 km water supply pipes and 7.0 km sewer pipes will be installed to connect to the existing systems.

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SME facilities with total floor area of 40,000 m2 will be constructed and commissioned

ha = hectare, km = kilometer, m2 = square meter, m3/d = cubic meter per day, PRC = People’s Republic of China, SMEs = small- and medium-sized enterprises, WWTP = wastewater treatment plant.

Table 2: Output 4: Remediation and Environmental Cleanup from

Mining Impacts in Project Cities Improved Item Subcomponent Brief Description

Hegang

HG 4.1 Remediation of open pit mine and wasterock dumpsite

The subcomponent has a total area of 52.6 ha, an area of 23.6 ha will be filled in a controlled way considering geotechnical stability with waste rock together with clay layer by layer, and site will be graded. New roads of 3.9 km with sidewalks on both sides and landscaping will be built on the surface. Pedestrian paths of 2.6 km and green land with a total area of 13.7 ha will be built.

Jixi

JX 4.1 Hengshan District waste rock dumpsite remediation

Work has two phases: (i) Phase I includes geological survey of project area of 89.7 ha;

and (ii) Phase II includes site remediation approaches based on survey

results, site grading of 20.5 ha, reforestation of 69.2 ha, drainage interceptor ditch of 2.0 km, drainage ditch of 1.0 km, retaining wall of 0.3 km, fence of 0.6 km, and landscaping works.

(A mining impact monitoring station will be built as part of output 5)

Qitaihe

QH 4.1 Mining remediation and environmental rehabilitation

A waste rock dumpsite (10.4 ha) and a mining subsidence area (11.3 ha) will be remediated. A total of 187,313 m3 of waste rock from 10.4 ha will be removed and the waste rock will be used to fill the subsidence area and planting of trees in both sites.

Shuangyashan

SY 4.1 Wasterock dumpsite remediation: Xiaoxishan mine

The wasterock dumpsite in Xiaoxishan is a depleted coal mine, with an area of 24.7 ha. It comprises forest land of 6.1 ha and construction land of 18.6 ha. The project will increase afforestation and remediate the construction land, then the remediated land is planned for future use as farmland. Works include 206,788 m3 of wasterock removal, 192,314 m3 of filling and grading of area affected by subsidence, reforestation, and construction of a drainage ditch.

ha = hectare, km = kilometer, m = meter, m3 = cubic meter.

Table 3: Output 5: Integrated Urban Infrastructure and Services in Project Cities

Improved Item Subcomponent Brief Description

Hegang

HG 5.1 Integrated river rehabilitation and cleanup from mining and ecosystems-based adaption (Shitou River, Qianjin Creek, Heli River, and Xiaoheli River)

Flood protection of four rivers, three of which (16.6 km) according to 1 in 50-year flood standard and Qianjin Creek according to 1 in 20-year flood standard (3.3 km), will include dredging, and embankment construction implementing green infrastructure approach with landscaping as a river greenway to increase flow capacity. Green-belt up to 30 m wide on each side or one side of the rivers will be built. The total greening area is about 75.0 ha, mainly planted with local tree species.

HG 5.2 District heating system energy efficiency improvements

7.2 km primary pipe network and 65.2 km secondary pipe network will be retrofitted.

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HG 5.3 Road rehabilitation, public transport, and NMT improvements

Curb side bus priority lanes of 29.1 km on urban roads will be provided. Service of public transport and NMT will include: (i) 34.3 km roads rehabilitated, including roads resurfacing, over

50 pairs of bus bays, sidewalk improvements, and some intersections’ safety improvements;

(ii) ITS with intelligent signal control system, passenger information system, and surveillance system;

(iii) special vehicles and/or equipment for road maintenance will be purchased; and

(iv) 14.3 km drainage pipes associated with the rehabilitation of 29 roads will be installed.

Jixi

JX 5.1 Hengshan District integrated rivers and lake rehabilitation and ecosystems-based adaptation (Hongqi Lake, Anle Creek, and Huangni River)

Flood risk protection of two rivers: Anle Creek (0.8 km) (1 in 30-year flood protection standard), and Huangni River (7.9 km) (1 in 20-year flood protection standard). Hongqi Lake (23.5 ha) will be rehabilitated.

JX 5.2 Hengshan District urban regeneration, community facilities, and public space improvement

3.2 ha of land including green park, multiuse public training and education facility with a mining remediation monitoring and training center (gross floor area: 8,000 m2), technical library (5,000 m2), and gym (5,000 m2) will be rehabilitated and opened for public use.

JX 5.3 Hengshan District roads improvement

Jiaotong Street will be rebuilt (0.4 km) and a road on the riverbank will be built (1.5 km). Gongqu road and flyover will be constructed (around 0.3 km).

JX 5.4 Jixi urban infrastructure—water supply pipes, wastewater collection, and drainage

Water supply pipes of 72.5 km to reduce leakage will be refurbished; 23.3 km sewer pipes to separate sewage and rain water will be installed; new drainage pipes of 12.5 km and drainage trench of 20.0 km; 5 sedimentation tanks will be built to collect, treat, and discharge rainwater; and associated 1 sewer pumping station and 3 drainage pumping stations will be constructed and equipped.

JX 5.5 Jixi City No. 3 water treatment plant upgrading and expansion

Existing water intake (84,000 m3/d) and water treatment plant (50,000 m3/d) will be upgraded, and new advanced treatment units (80,000 m3/d) and sludge treatment facilities will be constructed and installed.

Qitaihe City

QH 5.1 Qitaihe WTPs upgrading and water supply distribution system replacement and expansion

Two WTPs will be upgraded: Shengke WTP (Plant I) with design capacity of 100,000 m3/d, and water and sewerage company's WTP (Plant II) with design capacity of 50,000 m3/d.

Taoshan reservoir in Qitaihe City will remain the water source for the two plants. The project will help to develop a river basin pollution comprehensive control master plan under output 1. The water intake will also be upgraded by replacing equipment.

Water supply and distribution system will be replaced and expanded in this component, including replacing 17.8 km old main pipes and installing 73.2 km new main pipes, and 15 booster pump stations will also be built.

The project will pilot test an NRW reduction program in two pilot communities in the city under output 1. The experience gained in the pilot tests will then be used to scale up to approximately 100 communities for NRW reduction expected after midterm review mission.

QH 5.2 Sustainable and clean fuel public transport improvements

Under this subcomponent (i) 209 electric buses will be procured to replace the old diesel

buses; (ii) three bus terminals with charging stations will be built; (iii) current bus operation and control system will be upgraded

using cell phone applications for passenger information system, and fare collection system; and

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(iv) peak hour bus lanes will be implemented on key routes, and bus stops will be improved as part of counterpart activities.

Shuangyashan City

SY 5.1 Urban infrastructure—water supply, wastewater collection, and drainage

Water supply: 24.7 km of water main; 2 new pumping stations (35,000 m3/d, and 15,000 m3/d); 3 clean water tanks (3,600 m3, 3,000 m3 and 4,000 m3), 1 reservoir (3,000 m3) and other associated facilities, which include drainage pipe in the WTP, new laboratory, flow meters at key intersections, and the SCADA system. Drainage pipe installation with total length of 52.3 km in Jianshan District. Sewer pipe installation with total length of 25.5 km sewer pipe in Lingdong District and 59.6 km sewer pipe in Jianshan District will be installed.

SY 5.2 Key road connections constructed

Subcomponents include: (i) South Ring Road on an existing narrower road with a length of

about 3.8 km will be built; (ii) Yunfeng link including a tunnel and approach roads with a total

length of about 1.4 km will be constructed; and (iii) Xinxing Avenue link with one ramp and related approach roads

will be built, and bus lanes will be placed in the bridge section of six lanes with a length of about 1.5 km.

ha = hectare, ITS = intelligent transport system, km = kilometer, m = meter, m3 = cubic meter, m3/d = cubic meter per day, NMT = nonmotorized transport, NRW = nonrevenue water, SCADA = supervisory control and data acquisition, SMEs = small- and medium-sized enterprises, WTP = water treatment plant. Source: Asian Development Bank estimates. D. Beneficiaries 14. With its comprehensive urban and economic revitalization approach, the project is expected to help stop and reverse the out-migration of the younger qualified workforce and attract and retain residents, companies, and jobs to more attractive project cities. The project will directly benefit 2.73 million urban residents through (i) stronger SME competitiveness and jobs creation in improved non-coal industrial parks; (ii) better public image through mining remediation; (iii) improved water supply, sewerage, district heating, flood protection, roads, road safety, and public transport; (iv) greater environmental and traffic safety awareness through public education programs; and (v) increased cooperation between the project cities in tourism promotion, logistics and trade, supply chain integration, and SME support through smart city applications. By component, the project will benefit 2.18 million people (mining rehabilitation); 50,000 people in Hegang (district heating); 848,600 people excluding Hegang (water supply); 1.48 million people in Hegang and Jixi (river rehabilitation); 2.73 million people (road and traffic services); and 16,480 employees (industrial parks). The indirect beneficiaries are the entire populations of the project cities.

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II. IMPLEMENTATION PLANS A. Project Readiness Activities

Table 4: Project Readiness Activities

Indicative Activities

2017 (Months)

2018 (Months)

Responsible Individual/ Unit/Agency/ Government 4 5 6 7 8 9 10 11 12 1 2 3

Advance contracting actions including bid document preparation

HPG, HDRC, implementing agencies, PMOs, PIUs

Bid documents review and approval


Retroactive financing actions


Establish project implementation arrangements


Feasibility study reports, EIA, resettlement plans, and FCUP approved by HDRC

HPG, HDRC, implementing agencies, PMOs

FCUP approved by NDRC

HPG, HDRC, implementing agencies, PMOs

Loan negotiations ADB, MOF, HPG, implementing agencies

ADB Board approval ADB

Loan signing ADB, MOF

Government legal opinion provided

MOF, MOFA

Government budget inclusion

MOF, HPG, implementing agencies

EIB approval EIB

Loan effectiveness ADB, MOF

ADB = Asian Development Bank, EIA = environmental impact assessment, EIB = European Investment Bank, FCUP = Foreign Capital Utilization Plan, HDRC = Heilongjiang Development and Reform Commission, HPG = Heilongjiang Provincial Government, MOF = Ministry of Finance, MOFA = Ministry of Foreign Affairs, NDRC = National Development and Reform Commission, PIU = project implementation unit, PMO = project management office. Source: Asian Development Bank estimates.

10

B. Overall Project Implementation Plan

Table 5: Overall Project Implementation Plan


2017 (Qtr)

2018 (Qtr)

2019 (Qtr)

2020 (Qtr)

2021 (Qtr)

2022 (Qtr)

2023 (Qtr)

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Output 1: Capacity in business development services and integrated project planning and management developed

(i) Recruit and mobilize implementation support consultants

(ii) Implement BDS support to SMEs

(iii) Implement capacity development training

(iv) Implement and monitor EMP, resettlement plan, and SGAP

Output 2: See PAM (Section B)

Output 3: Key infrastructure and SME facilities in non-coal industrial parks in project cities constructed

Hegang

HG 3.1. Hegang industrial park—infrastructure and multifunctional SME support facilities

(i) Engineering design

(ii) Implement resettlement plan

(iii) Procure civil works

(iv) Construction

(v) Inspect and deliver

HG 3.2. Hegang Luobei County industrial park—WWTP and treated wastewater reuse pipe




(iv) Procure goods

(v) Construction

(vi) Inspect and deliver

Jixi

JX 3.1. Hengshan District industrial park—road infrastructure and SME support facilities




(iv) Construction


JX 3.2. Jiguan District industrial park—WWTP and sewer pipes




(iv) Procure goods

(v) Construction

(vi) Inspect and deliver

Qitaihe

QH 3.1. Qitaihe industrial park—road infrastructure and SME facilities


11


2017 (Qtr)

2018 (Qtr)

2019 (Qtr)

2020 (Qtr)

2021 (Qtr)

2022 (Qtr)

2023 (Qtr)

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4



(iv) Construction


Shuangyashan

SY 3.1. Shuangyashan business park—road and utility infrastructure and SME facilities




(iv) Construction


Output 4. Remediation and environmental cleanup from mining impacts in project cities improved

Hegang

HG 4.1. Remediation of open pit mine and wasterock dumpsite



(iii) Procurement

(iv) Construction


Jixi

JX 4.1. Hengshan District wasterock dumpsite remediation



(iii) Procurement

(iv) Construction


Qitaihe

QH 4.1. Mining remediation and environmental rehabilitation



(iii) Procurement

(iv) Construction


Shuangyashan

SY 4.1. Wasterock dumpsite remediation: Xiaoxishan mine



(iii) Procurement

(iv) Construction


Output 5. Integrated urban infrastructure and services in project cities improved

Hegang

HG 5.1. Integrated river rehabilitation and cleanup from mining and ecosystems-based adaptation



(iii) Procurement

(iv) Construction


HG 5.2. District heating system energy efficiency improvements


12


2017 (Qtr)

2018 (Qtr)

2019 (Qtr)

2020 (Qtr)

2021 (Qtr)

2022 (Qtr)

2023 (Qtr)

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4


(iii) Procurement

(iv) Construction


HG 5.3. Road rehabilitation, public transport, and non-motorized transport improvements



(iii) Procurement

(iv) Construction


Jixi

JX 5.1. Hengshan District integrated rivers and lake rehabilitation and ecosystems-based adaptation



(iii) Procurement

(iv) Construction


JX 5.2. Hengshan District urban regeneration, community facilities, and public space improvement



(iii) Procurement

(iv) Construction


JX 5.3. Hengshan District roads improvement



(iii) Procurement

(iv) Construction


JX 5.4. Jixi urban infrastructure—water supply pipes, wastewater collection, and drainage



(iii) Procurement

(iv) Construction


JX 5.5. Jixi City no.3 water treatment plant upgrading and expansion



(iii) Procurement

(iv) Construction


Qitaihe

QH 5.1. Water treatment plants upgrading, water supply distribution system replacement and expansion



(iii) Procurement

(iv) Construction


13


2017 (Qtr)

2018 (Qtr)

2019 (Qtr)

2020 (Qtr)

2021 (Qtr)

2022 (Qtr)

2023 (Qtr)

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

QH 5.2. Sustainable and clean fuel public transport improvements



(iii) Procurement

(iv) Construction


Shuangyashan

SY 5.1. Urban infrastructure—water supply, wastewater collection, and drainage



(iii) Procurement

(iv) Construction


SY 5.2. Key road connections



(iii) Procurement

(iv) Construction


B. Management activities

Procurement plan key activities to procure contract packages

Environment management plan key activities

Social and Gender action plan key activities

Communication strategy key activities

Annual and/or midterm review

Project completion report

BDS = business development services, CDM = capacity development module, SMEs = small- and medium-sized enterprises. Source: Asian Development Bank estimates.

14

III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Implementation Organizations: Roles and Responsibilities

Table 6: Key Parties Involved in Project Implementation and Roles and Responsibilitiesa Project Implementation Organizations Management Roles and Responsibilities

Executing agency: Heilongjiang Provincial Government

(i) Responsible for overall project implementation (ii) Supervise and coordinate overall project planning, management, and

implementation (iii) Facilitate disbursement through HFD (iv) Facilitate project auditing (v) Supervise the implementing agencies (vi) Facilitate disbursements and timely annual project account audits

Heilongjiang Development and Reform Commission in cooperation with Heilongjiang Finance Department

(i) Provide overall project guidance and coordination (ii) Oversee and coordinate project preparation and implementation (iii) Provide overall policy guidance and overall coordination and project

management (iv) Coordinate project implementation activities among government agencies (v) Meet regularly, discuss, and take actions to ensure smooth project

implementation

Heilongjiang Finance Department

(i) Establish and manage project advance account (ii) Submit withdrawal applications to ADB (iii) Manage and supervise loan repayment (iv) Oversee and facilitate provision of counterpart funds (v) Provide financial management support to PMOs

Implementing agencies: Hegang Municipal Government Jixi Municipal Government Qitaihe Municipal Government Shuangyashan Municipal Government

(i) Provide counterpart funds and for loan repayment (ii) Design and procure works and goods under all infrastructure components,

and administer and monitor the contractors and suppliers, with the support of design institutes, tendering agent and supervision companies

(iii) Undertake contract management, construction supervision and quality control, with the support of supervision companies

(iv) Develop project management procedures, implementation plan, and financial management

(v) Review and submit withdrawal applications to HFD (vi) Maintain separate project accounts for the project (vii) Prepare and update EMP and other project documents (viii) Participate in training (ix) Organize project acceptance verification

Project management office in each project city

(i) Responsible for day-to-day project implementation activities for all infrastructure subcomponents in the respective city

(ii) Manage project preparation and implementation on behalf of the respective implementing agency

(iii) Coordinate participating local government agencies, institutes, and consultants

(iv) Coordinate land acquisition and resettlement activities (v) Implement non-structural and capacity development components (vi) Procure consulting services contract packages and facilitate bid

evaluation (vii) Prepare and update procurement plan and other project documents (viii) Provide ADB with (a) quarterly project progress reports, (b) semiannual

environmental, resettlement, social and gender monitoring reports, (c) annual audit reports, and (d) project completion report

(ix) Forward semiannual external and internal environment monitoring and

15

Project Implementation Organizations Management Roles and Responsibilities

evaluation reports to ADB (x) Prepare withdrawal applications and submit through municipal finance

bureaus to the HFD (xi) Carry-out project performance and compliance monitoring (xii) Disclose project-related information and documents in accordance with

ADB guidelines

ADB (i) Support project administration including executing agency and implementing agencies’ compliance of obligations and responsibilities in accordance with ADB policies and procedures

(ii) Monitor and review the project progress and impact (iii) Review and approve procurement, contract awards, and other reports (iv) Approve withdrawal applications and disburse loan proceeds

ADB = Asian Development Bank, EMP = environmental management plan, HFD = Heilongjiang Finance Department, PAM = project administration manual, PMO = project management office. a A separate list of management arrangements is provided for the financial intermediation component in PAM Section

B: Financial Intermediation Component and Business Development Services Subcomponent. Source: Asian Development Bank.

Table 7: Project Management Arrangements for Hegang

NMT = nonmotorized transport, O&M = operation and maintenance, PIU = project implementation unit, PMO = project management office, SMEs = small- and medium-sized enterprises, WWTP = wastewater treatment plant. Source: Asian Development Bank.

Subcomponent Project Implementation

Units Operation and Maintenance Units

Hegang industrial park (green food, green energy, and high-tech)—infrastructure and multifunctional SME support facilities

Hegang Economic Development Area Construction Company

Hegang

Hegang Luobei County industrial park (high-tech graphite-based materials and e-mobility)—WWTP treated wastewater reuse pipe

Liyun Investment and Development Company and/or Luobei County PMO

To be decided by the PIU

Remediation of open pit mine and waste rock dumpsite

Hegang Land Resources Bureau

Will be decided when the function of the land is confirmed.

Integrated river rehabilitation and cleanup from mining and ecosystems-based adaption (Shitou River, Qianjin Creek, Heli River, and Xiaoheli River)

Hegang Water Affairs Bureau

Hegang River Course and Small Reservoir Management Department

District heating system energy efficiency improvements

Hegang City Management and Administrative Enforcement Bureau


Road rehabilitation, public transport, and NMT improvements


(i) Road: Hegang Public Transport Bureau

(ii) Heating: Huisheng Water Supply and Heat Supply Company

(iii) Drainage: Hegang Water Supply and Wastewater Management Department

16

Table 8: Project Management Arrangements for Jixi

PMO = project management office, SMEs = small- and medium-sized enterprises. Source: Asian Development Bank.

Table 9: Project Management Arrangements for Qitaihe



Qitaihe industrial park (green food and pharmaceutical biofermentation)—road infrastructure and SME support facilities

Qitaihe Economic Development Area Administrative Committee

Qitaihe Economic Development Area Administrative Committee

Mining remediation and environmental rehabilitation

Qitaihe Land Resources Bureau

Transfer of facilities and area by PIU to Taoshan District Government for operation and maintenance

Qitaihe water treatment plants upgrading and water supply distribution system replacement and expansion

Qitaihe Water Affairs and Water Supply Company

Qitaihe Water Affairs and Water Supply Company (four departments)



Hengshan District industrial park (high-tech graphite-based materials and e-mobility)—road infrastructure and SME support facilities

Hengshan District PMO Administrative Office of Hengshan District Graphite Park

Jixi Jiguan District industrial park WWTP and sewer pipes

Administrative Committee of Jiguan Non-Public Scientific and Technological Enterprises Demonstration Park

Administrative Committee of Jiguan Non-Public Scientific and Technological Enterprises Demonstration Park

Hengshan District wasterock dumpsite remediation

Hengshan District PMO Hengshan District Urban and Rural Construction Bureau

Hengshan District integrated rivers and lake rehabilitation and ecosystems-based adaptation (Hongqi Lake, Anle Creek, and Huangni River)

Hengshan District PMO Jixi Water Affairs Bureau

Hengshan District urban regeneration, community facilities, and public space improvement

Hengshan District PMO Maintenance of the property will be outsourced by Hengshan District Government. Hengshan Education Bureau, Hengshan Civil Affairs Bureau, and Hengshan Safety and Mine Bureau will be responsible for proper use of the facilities.

Hengshan District roads improvement

Hengshan District PMO Hengshan District Urban and Rural Construction Bureau

Jixi urban infrastructure—water supply pipes, wastewater collection, and drainage

Jixi Lutong Municipal Engineering Company

Jixi Municipal Infrastructure Management Division

Jixi City No. 3 water treatment plant upgrading and expansion

Jixi Water Supply Company

Jixi Water Supply Company

17



Sustainable and clean fuel public transport improvements

Qitaihe Public Transportation Company

Qitaihe Public Transportation Company

PIU = project implementing unit. Source: Asian development Bank.

Table 10: Project Management Arrangements for Shuangyashan



Shuangyashan business park (non-coal SME and PRC-Russia business and trading park)—road and utility infrastructure and SME support facilities

Shuangyashan Economic Development District Administrative Committee

Shuangyashan Economic Development District Administrative Committee

Wasterock dumpsite remediation: Xiaoxishan Mine

Lingdong District Project Management Office

Lingdong District Government

Urban infrastructure—water supply, wastewater collection, and drainage

Water supply: Shuangyashan Water Supply Company Wastewater and Drainage: Shuangyashan Municipal Facility Management Department

Water supply: Shuangyashan Water Supply Company Wastewater and drainage: Shuangyashan Municipal Facility Management Department

Key road connections South Ring Road: Shuangyashan Transport Bureau Yunfeng and Xinxing Avenue links: Shuangyashan City Construction Project Management Office

South Ring Road: Shuangyashan Transport Bureau Yunfeng and Xinxing Avenue links: Shuangyashan Municipal Facility Management Department

SMEs = small- and medium-sized enterprises. Source: Asian Development Bank.

18

B. Key Persons Involved in Implementation

Executing Agency Heilongjiang Provincial Government

Officer's Name: Li Chenglin Position: Deputy Director of Foreign Capital Utilization and Overseas Investment Division of Hegang Provincial Development Reform Commission (DRC) Telephone No.: +86 451 8260 3161 Email Address: [email protected] Office Address: Heilongjiang Provincial DRC, Zhongshan St. 202, Nangang District, Harbin, Heilongjiang

Implementing Agencies Hegang Municipal Government

Officer's Name: Yu Xiang Position: Director of Hegang DRC Telephone No.: +86 133 5958 2226 Email Address: [email protected] Office Address: Hegang DRC, Beijing Rd. No.1, Xiangyang District, Hegang, Heilongjiang

Jixi Municipal Government Officer's Name: Han Shengdi Position: Director of Jixi City Government DRC Information Center Telephone No.: +86 139 0467 8666 Email Address: [email protected] Office Address: Jixi DRC, Hongqi Rd. 18, Jixi, Heilongjiang

Qitaihe Municipal Government Officer's Name: Feng Liang Position: Deputy Director of Qitaihe DRC Telephone No.: +86 186 4641 9002 Email Address: [email protected] Office Address: Qitaihe DRC, Qitaihe, Heilongjiang

Shuangyashan Municipal Government

Officer's Name: Liu Ping Position: Deputy Director of Shuangyashan DRC Telephone No.: +86 136 0458 8508 Email Address: [email protected] Office Address: Shuangyashan DRC, Jianshan District, Shuangyashan, Heilongjiang

Asian Development Bank East Asia Department Urban and Social Sectors Division

Staff Name: Sangay Penjor Position: Director Telephone No.: +63 2 632 6148 Fax No.: +63 2 636 2407 Email Address: [email protected]

Mission Leader Staff Name: Stefan Rau Position: Senior Urban Development Specialist Telephone No.: +63 2 632 5812 Email Address: [email protected]

European Investment Bank Lending Department for Asia and Latin America Division Project Contact

Staff Name: Francisco Paula de Coelho Position: Director Telephone No. +352 4379 86 550 Email Address: [email protected] Staff Name: Ren Tao Position: Loan Officer Telephone No.: +352 4379 85 207 Email address: [email protected]

mailto:[email protected]




19

C. Project Organization Structure

O&M = operation and maintenance, PMO = project management office, PRC = People’s Republic of China. Source: Asian Development Bank.

Hegang

Municipal Government

(Implementing Agency)

Project Leading Group

Project Management

Office

Heilongjiang Provincial Government

(Executing Agency)

Project Lead, Supervision,

Coordination, and Management

Project Implementation

Units

(i) Hegang Economic

Development Area Construction

Company (ii) Luobei County

Liyun Investment and Development

Company (Luobei PMO)

(iii) Hegang Land Resources Bureau

(iv) Hegang Water Affairs Bureau

(v) Hegang City Management and

Administrative Enforcement Bureau


Units

(i) Shuangyashan

Economic Development

District Administrative

Committee (ii) Lingdong District

PMO (iii) Shuangyashan

Water Supply Company

(iv) Shuangyashan City

Construction PMO


Units

(i) Qitaihe Economic

Development Area Administrative

Committee (ii) Qitaihe Land

Resources Bureau (iii) Qitaihe Water

Affairs and Water Supply Company

(iv) Qitaihe Public Transportation Company


Units

(i) Hengshan District

PMO (ii) Administrative

Committee of Jiguan Non-Public

Scientific and Technological

Enterprises Demonstration Park

(iii) Jixi Lutong Municipal

Engineering Company

(iv) Jixi Water Supply

Company

Jixi




Project Management

Office

Qitaihe




Project Management

Office

Shuangyashan




Project Management

Office

O&M Units O&M Units O&M Units O&M Units

PRC National Government

(Executing Agency)

Asian Development Bank

(Executing Agency)

20

IV. COSTS AND FINANCING

15. This section describes the project costs, categories, and components to be financed by ADB and the HPG. Loan proceeds will be disbursed per the Loan Disbursement Handbook (2017, as amended from time to time), and subject to the provisions of the loan and project agreements. 16. Costs are itemized below using the following categories:

(i) Civil works include contracts for construction and installation of project works and may include provision of related equipment, materials, and supplies. Financed by the ADB loan and with counterpart funds from project cities.

(ii) Equipment and goods include procurement contracts for equipment, materials, and supplies. Financed by the ADB loan and with counterpart funds from project cities.

(iii) Design, monitoring, evaluation, and supervision include expenditures for engineering and related services to design, implement, and monitor project components. Financed by counterpart funds from project cities.

(iv) Land acquisition and resettlement include expenditures for temporary or permanent occupancy of land and associated resettlement activities. Financed by counterpart funds from project cities.

(v) Capacity development and project management includes consulting service contracts to provide training and related services required to assure effective implementation of the loan project, increase the professional capacity of staff involved in implementation and subsequent operation of project components, and monitor the implementation and effectiveness of impact mitigation measures for resettlement and environmental impacts. Financed by the ADB loan.

(vi) Contingencies (physical) include budgetary provision to cover unexpected costs and cost overruns. Financed by counterpart funds from project cities.

(vii) Contingencies (price) includes budgetary provision to cover inflationary increases in costs. Financed by counterpart funds from project cities.

(viii) Financial charges during implementation include commitment charges and interest during the implementation period. Financed by the ADB loan.

17. The above cost categories include taxes, duties, transport, and insurance costs.

A. Cost Estimates Preparation and Revisions

18. Capital costs and project operation and maintenance (O&M) costs were provided in the feasibility study report (FSR) prepared on behalf of the PMOs by project design institutes, in consultation with the implementing agencies and project preparatory technical assistance consultants. Costing was completed using government costing standards, and information from site investigations, design institute project files, and queries with suppliers. 19. Cost revisions during implementation will be prepared by the implementing agencies and their contractors. B. Key Assumptions

20. The following key assumptions underpin the cost estimates and financing plan:

(i) Exchange rate: CNY 6.899 = $1.00 (as of 5 April 2017).

21

21

(ii) Price contingencies based on expected cumulative inflation over the implementation period as follows:

Table 11: Escalation Rates for Price Contingency Calculation

Item 2017 2018 2019 2020 2021+ Average

Foreign rate of price inflation 1.40% 1.50% 1.50% 1.50% 1.50% 1.48% Domestic rate of price inflation 2.20% 2.30% 2.30% 2.30% 2.30% 2.28%

Source: ADB estimates.

(iii) There are no in-kind contributions.

1. Investment and Financing Plans

21. The project is estimated to cost $1,021.0 million equivalent (Table 12). Detailed cost estimates by expenditure category and by financier are in tables 14 and 16. The major expenditure items are civil works, equipment and its installation, financial intermediation component, and consulting services.

Table 12: Project Investment Plan ($ million)

Item Amounta

A. Investment Project Components—Base Costb 1. Output 1: Capacity in BDS and integrated project planning and management developed 14.3 2. Output 3: Key infrastructure and SME facilities in non-coal industrial parks 144.0 3. Output 4: Remediation and environmental cleanup from mining impacts 23.9 4. Output 5: Integrated urban infrastructure and services 504.8 Subtotal (A) 687.0 B. Financial Intermediation Component 1. Output 2: Sustainable SME investment and access to finance (i) Subprojects through cofinancing loans 48.0 (ii) Subprojects through cash collateral facility 160.0 (iii) Subprojects through entrusted loans 24.0 Subtotal (B) 232.0 C. Contingenciesc 71.6 D. Financial Charges During Implementationd 30.4 Total (A+B+C+D) 1,021.0

ADB = Asian Development Bank, BDS = business development services, EIB = European Investment Bank, OCR = ordinary capital resources, SMEs = small- and medium-sized enterprises. a Includes taxes and duties of $28.96 million. Such amount does not represent an excessive share of project cost. The

government will finance taxes and duties of $4.89 million through cash contribution. b In mid-2016 prices as of 23 April 2017. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and

studies. Price contingencies computed at an average of 1.48% on foreign exchange costs and 2.28% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. No contingencies are included for the financial intermediation component.

d Includes interest and commitment charges capitalized under the ADB loan and not for the EIB loan. Interest during construction for the OCR loan has been computed at the 5-year United States dollar fixed swap rate plus an effective contractual spread of 0.50% and maturity premium of 0.10%. Commitment charges for the OCR loan are 0.15% per year to be charged on the undisbursed loan amount.

Source: ADB estimates. 22. The government has requested a regular loan of $310 million from ADB’s ordinary capital resources to help finance the project. The loan will have a 25-year term, including a grace period of 5 years; 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 (the interest and other charges during construction to be capitalized in the loan); and such other terms and conditions set forth in the draft loan and project agreements. Based on the custom-tailored

22

repayment method, the average maturity is 15.20 years, and the maturity premium payable to ADB is 0.10% per year. 23. The summary financing plan is in Table 13. ADB will finance the expenditures in relation to civil works, equipment and its installation, capacity building, and project management. The European Investment Bank (EIB) will provide loan cofinancing equivalent to $220 million not administered by ADB. 15 EIB will cofinance the expenditures in relation to civil works, and equipment and its installation for outputs 4 and 5.

Table 13: Financing Plan

Source Amount

($ million) Share of Total

(%)

A. Investment Project Components 1. ADB: ordinary capital resources (regular loan)a 254.0 24.9 2. EIB loanb 220.0 21.5 3. Governmentc 315.0 30.9 Subtotal (A) 789.0 77.3 B. Financial Intermediation Componentd 1. ADB: ordinary capital resources (regular loan) 56.0 5.5 2. Domestic commercial banks 106.4 10.4 3. Subborrowers 69.6 6.8 Subtotal (B) 232.0 22.7 Total (A+B) 1,021.0 100.0

ADB = Asian Development Bank, EIB = European Investment Bank. a The overall ADB–EIB and ADB loan amounts for the investment loan are distributed as follows: (i) Hegang—

$175.00 million (ADB: $93.91 million), (ii) Jixi—$95.00 million (ADB: $71.80 million), (iii) Qitaihe—$125.00 million (ADB: $39.54 million), and (iv) Shuangyashan—$135.00 million (ADB: $104.75 million). These include the following amounts for the financial intermediation component: (i) Hegang—$20.00 million, (ii) Jixi—$8.00 million, (iii) Qitaihe—$13.00 million, and (iv) Shuangyashan—$15.00 million.

b Subject to approval. EIB loan amounts are distributed as follows: (i) Hegang—$81.09 million, (ii) Jixi—$23.20 million, (iii) Qitaihe—$85.46 million, and (iv) Shuangyashan—$30.25 million. EIB is considering to provide a grant that would not be administered by ADB and would support the project outcome.

c Municipal government financing comprises: (i) $73.50 million from Hegang, (ii) $65.70 million from Jixi, (iii) $94.30 million from Qitaihe, and (iv) $81.50 million from Shuangyashan.

d Cofinancing and subborrower counterpart contributions are estimated based on a 70:30 debt–equity structure and agreed cofinancing ratios with the financial intermediaries for the three financial products.


24. The SME financing platform, through the $56.0 million FIC, is estimated to leverage $162.4 million in cofinancing and counterpart funding from financial intermediaries and other commercial banks for the first batch of subprojects. Subloan terms are expected to be 3–5 years. After the first batch is repaid, the loan proceeds will be relent to another batch and revolved, with a total estimated leverage investment of $744.8 million over the 15-year FIC repayment period. 25. The government has provided ADB with (i) the reasons for its decision to borrow under ADB’s LIBOR-based lending facility on the basis of 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.

15 EIB cofinancing will be on a joint collaborative basis and not administered by ADB. However, EIB will contribute to

the financing of the same components and contracts as ADB. EIB approval is expected by Q1 2018.

23

C. Detailed Cost Estimates by Expenditure Category

Table 14: Detailed Cost Estimates by Expenditure Category

Items

(CNY million) ($ million)a % of Total Base Cost

% of Total Cost

Foreign Exchange

Local Currency Total Cost

Foreign Exchange

Local Currency Total Cost

A. Investment Costsb

1. Civil works 775.1 2,325.2 3,100.2 112.3 337.0 449.4 65.4 57.0 2. Equipment 242.9 566.8 809.7 35.2 82.2 117.4 17.1 14.9 3. Design, monitoring, and evaluation 0.0 463.0 463.0 0.0 67.1 67.1 9.8 8.5 4. Land acquisition and resettlement 0.0 267.6 267.6 0.0 38.8 38.8 5.6 4.9 5. Capacity development 29.7 69.3 98.9 4.3 10.0 14.3 2.1 1.8

Subtotal(A) 1,047.7 3,691.7 4,739.4 151.9 535.1 687.0 100.0 87.1 B. Contingenciesc

1. Physical 41.9 147.7 189.6 6.1 21.4 27.5 4.0 3.5 2. Price 67.3 237.1 304.4 9.8 34.3 44.1 6.4 5.6

Subtotal(B) 109.2 384.8 494.0 15.8 55.8 71.6 10.4 9.1 C. Financial Charges During Implementationd 0.0 209.8 209.8 0.0 30.4 30.4 4.4 3.9

Total Investment Project Cost (A+B+C)e 1,156.9 4,286.4 5,443.2 167.7 621.3 789.0 114.9 100.0

Note: Numbers may not sum exactly due to rounding. a Based on domestic feasibility study reports. In mid-2016 prices as of 23 April 2017, and at an exchange rate of CNY 6.899 to $1, not including the financial

intermediation component. b Includes taxes and duties of $28.96 million. Such amount does not represent an excessive share of project cost. The government will finance taxes and duties

of $4.89 million through cash contribution. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and studies. Price contingencies computed at an

average of 1.48% on foreign exchange costs and 2.28% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. No contingencies are included for the financial intermediary component.


e Not including the financial intermediation component. Source: ADB estimates.

24

D. Allocation and Withdrawal of Loan Proceeds

Table 15a: Allocation and Withdrawal of Loan Proceeds (Summary)

ADB = Asian Development Bank, EIB = European Investment Bank. a Detailed categories and financing percentages are in Table 15b. b Subject to the condition for withdrawal described in the loan agreement, paragraph 8(a) of Schedule 3 (upon execution of EIB loan agreement). c Subject to the condition for withdrawal described in the loan agreement, paragraph 8(b) of Schedule 3 (upon execution of framework cooperation agreements with concerned financial Intermediaries and other such terms and conditions as set forth in Schedule 3 of the loan agreement. Source: Asian Development Bank estimates.

Table 15b: Detailed Allocation and Withdrawal of Loan Proceeds

No. Item

Amount Allocated for ADB Financing ($) Percentage and Basis for

Withdrawal from the ADB Loan Account Category Subcategory

1 Works 195,724,294

1A1 Works Hegang

23,801,653 96.3% of total expenditure claimed

1B1 Works Hegang (ADB-EIB joint)a


1A2 Works Jixi


1B2 Works Jixi (ADB-EIB joint)a


1A3 Works Qitaihe


1B3 Works Qitaihe (ADB-EIB joint)a


1A4 Works Shuangyashan


1B4 Works Shuangyashan (ADB-EIB joint)a


2 Goods 27,717,766

2A Goods Hegang


No. Item



1 Works 195,724,294

1A Works (ADB only) 165,166,354 Up to 100.00% of total expenditure claimeda

1B Works (ADB-EIB joint)b

30,557,940 Up to 100.00% of total expenditure claimeda

2 Goods 27,717,766 Up to 100.00% of total expenditure claimeda

3 Project management support and capacity development


4 Financial intermediation component: Provision of entrusted loan and cash

collateralc


5 Interest and commitment charges 16,218,173 100.00% of total amount due

Total (ADB) 310,000,000

25

No. Item



2B Goods Jixi 11,817,358 100.00% of total expenditure

claimed

2C Goods Qitaihe 210,552 2.0% of total expenditure claimed

3 Project management support and capacity development


4

Financial intermediation component: Provision of entrusted loans and cash

collateralb

56,000,000 100.00% of total expenditure

claimed

5 Interest and commitment charges 16,218,173 100.00% of total amount due

Total (ADB) 310,000,000

ADB = Asian Development Bank, EIB = European Investment Bank. a Subject to the condition for withdrawal described in the loan agreement, paragraph 8(a) of Schedule 3 (upon execution of EIB loan agreement). b Subject to the condition for withdrawal described in the loan agreement, paragraph 8(b) of Schedule 3 (upon execution of framework cooperation agreements with concerned financial Intermediaries and other such terms and conditions as set forth in Schedule 3 of the loan agreement. Source: ADB estimates.

26

E. Detailed Cost Estimates by Financier

Table 16: Detailed Cost Estimates by Financier

Item

ADB Loan EIB Counterpart Total Cost

Amount ($ million)

% of Cost Category

Amount ($ million)

% of Cost Category

Amount ($ million)

Taxes and Duties

($ million) Total

($ million) % of Cost Category

Amount ($ million)

I. Investment Project Componentsa A. Base Costb 1. Civil works: Total

195.7 43.6 140.5 31.3 109.5 3.7 113.2 25.2 449.4

1A1. Civil works: Hegang (ADB)

23.8 96.3 0.0 0.0 0.9 0.0 0.9 3.7 24.7 1B1. Civil works: Hegang (ADB–EIB joint) 26.2 44.0 31.2 52.3 2.1 0.1 2.2 3.7 59.6

1C1. Civil works: Hegang (EIB) 0.0 0.0 46.1 96.3 1.7 0.1 1.8 3.7 47.9 1D1. Civil works: Hegang (NBF) 0.0 0.0 0.0 0.0 16.1 0.5 16.6 100.0 16.6

1A2. Civil works: Jixi (ADB) 39.1 69.2 0.0 0.0 16.9 0.6 17.4 30.8 56.5 1B2. Civil works: Jixi (ADB–EIB joint) 5.4 31.6 6.4 37.6 5.1 0.2 5.3 30.8 17.2

1C2. Civil works: Jixi (EIB) 0.0 0.0 16.8 69.2 7.2 0.2 7.5 30.8 24.2 1D2. Civil works: Jixi (NBF) 0.0 0.0 0.0 0.0 3.2 0.1 3.3 100.0 3.3

1A3. Civil works: Qitaihe (ADB) 17.8 90.0 0.0 0.0 1.9 0.1 2.0 10.0 19.8 1B3. Civil works: Qitaihe (ADB–EIB joint) 3.3 18.1 3.9 21.6 10.5 0.4 10.8 60.3 18.0

1C3. Civil works: Qitaihe (EIB) 0.0 0.0 13.0 39.7 19.1 0.7 19.8 60.3 32.8 1A4. Civil works: Shuangyashan (ADB) 77.9 80.1 0.0 0.0 18.7 0.6 19.4 19.9 97.2 1B4. Civil works: Shuangyashan (ADB–EIB

joint) 2.2 36.6 2.6 43.5 1.2 0.0 1.2 19.9 6.0

1C4. Civil works: Shuangyashan (EIB) 0.0 0.0 20.5 80.1 4.9 0.2 5.1 19.9 25.6 2. Goods: Total

27.7 23.6 79.5 67.8 9.0 1.2 10.1 8.6 117.4

2A. Goods: Hegang (ADB) 15.7 100.0 0.0 0.0 0.0 0.0 0.0 0.0 15.7 2A1. Goods: Hegang (EIB) 0.0 0.0 3.8 100.0 0.0 0.0 0.0 0.0 3.8

2B. Goods: Jixi (ADB) 11.8 100.0 0.0 0.0 0.0 0.0 0.0 0.0 11.8 2C. Goods: Qitaihe (ADB) 0.2 2.0 0.0 0.0 9.0 1.2 10.1 98.0 10.3

2C1. Goods: Qitaihe (EIB) 0.0 0.0 68.6 0.0 0.0 0.0 0.0 0.0 0.0 2C2. Goods: Shuangyashan (EIB) 0.0 0.0 7.2 0.0 0.0 0.0 0.0 0.0 0.0

Gov-1: Design, monitoring, and evaluation

0.0 0.0 0.0 0.0 67.1 0.0 67.1 100.0 67.1 Gov-2: Land acquisition and resettlement

0.0 0.0 0.0 0.0 38.8 0.0 38.8 100.0 38.8

3. Project management support and capacity development

14.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0 14.3

Subtotal (A)

237.8 34.6 220.0 32.0 224.3 4.9 229.2 33.4 687.0 B. Contingenciesc 0.0 0.0 0.0 0.0 71.6 0.0 71.6 100.0 71.6 C. Financial Charges during Implementationd 16.2 53.3 0.0 0.0 14.2 0.0 14.2 46.7 30.4

Total Investment Project Cost (I=A+B+C)e 254.0 32.2 220.0 27.9 310.1 4.9 315.0 39.9 789.0

II. Financial Intermediation Component Provision of entrusted loans and cash collateral 56.0 24.1 0.0 0.0 176.0 0.0 176.0 75.9 232.0

27

Item

ADB Loan EIB Counterpart Total Cost

Amount ($ million)

% of Cost Category

Amount ($ million)

% of Cost Category

Amount ($ million)

Taxes and Duties

($ million) Total

($ million) % of Cost Category

Amount ($ million)

Grand Total (I+II) 310.0 30.4 220.0 21.5 486.1 4.9 491.0 48.1 1,021.0

ADB = Asian Development Bank, EIB = European Investment Bank, NBF = nonbank financing. a Based on domestic feasibility study reports. In mid-2016 prices as of 23 April 2017, and at an exchange rate of CNY 6.899 to $1, not including the financial

intermediation component. Counterpart is the government. b Includes taxes and duties of $28.96 million. Such amount does not represent an excessive share of project cost. The government will finance taxes and duties of

$4.89 million through cash contribution. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and studies. Price contingencies computed at an




28

F. Detailed Cost Estimates by Outputs

Table 17: Detailed Cost Estimates by Outputsa

($ million)

SMEs = small- and medium-sized enterprises. Note: Numbers may not sum exactly due to rounding. a Based on domestic feasibility study reports. In mid-2016 prices as of 23 April 2017, and at an exchange rate of CNY 6.899 to $1, not including the financial

intermediation component. b Includes taxes and duties of $28.96 million. Such amount does not represent an excessive share of project cost. The government will finance taxes and duties of

$4.89 million through cash contribution. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and studies. Price contingencies computed at an




Item Total Cost

Output 1: Capacity in business development services and integrated project

planning and management

Output 3: Key infrastructure and SME facilities in non-coal industrial parks

Output 4: Remediation and

environmental cleanup from mining

impacts

Output 5: Integrated urban infrastructure and

services

Amount % of Cost Category Amount

% of Cost Category Amount

% of Cost Category Amount

% of Cost Category

A. Investment Costsb 1. Civil works 449.4 0.0 0.0 90.3 20.1 21.0 4.7 338.1 75.2 2. Equipment 117.4 0.0 0.0 19.0 16.2 0.0 0.0 98.4 83.8 3. Design, monitoring, and evaluation 67.1 0.0 0.0 13.5 20.2 2.9 4.3 50.7 75.6 4. Land acquisition and resettlement 38.8 0.0 0.0 21.2 54.6 0.0 0.0 17.6 45.4 5. Capacity development 14.3 14.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0 Subtotal (A) 687.0 14.3 2.1 144.0 21.0 23.9 3.5 504.8 73.5 B. Contingenciesc 71.6 1.5 2.1 14.1 19.7 2.4 3.3 53.6 74.9 C. Financial Charges During

Implementationd 30.4 0.9 2.9 6.7 22.1 1.3 4.2 21.5 70.8

Total Investment Project Cost (A+B+C)e 789.0 16.7 2.1 164.8 20.9 27.5 3.5 579.9 73.5

29

G. Detailed Cost Estimates by Year

Table 18: Detailed Cost Estimates by Yeara

($ million) Item Total Cost 2017 2018 2019 2020 2021 2022 2023

A. Investment Costsb 1. Civil works 449.4 0.0 0.6 18.1 85.2 126.7 163.6 55.2 2. Equipment 117.4 0.0 2.1 16.4 32.2 42.3 20.6 3.8 3. Design, monitoring, and evaluation 67.1 0.3 8.5 14.0 15.3 13.2 9.3 6.5 4. Land acquisition and resettlement 38.8 0.2 11.1 16.2 10.5 0.8 0.0 0.0 5. Capacity development 14.3 0.0 1.0 2.6 3.0 2.9 2.9 1.9 Subtotal (A) 687.0 0.5 23.3 67.3 146.2 185.9 196.4 67.4 B. Contingenciesc 71.6 0.0 2.2 14.9 30.7 16.9 4.9 2.0 C. Financial Charges During Implementationd 30.4 0.0 0.5 1.0 2.9 6.4 10.6 9.0 Total Project Cost (A+B+C)e 789.0 0.5 26.0 83.2 179.8 209.2 211.9 78.4 % Total Project Cost 100.0 0.1 3.3 10.5 22.8 26.5 26.9 9.9

Note: Numbers may not sum exactly due to rounding. a Based on domestic feasibility study reports. In mid-2016 prices as of 23 April 2017, and at an exchange rate of CNY 6.899 to $1, not including the financial

intermediation component. b Includes taxes and duties of $28.96 million. Such amount does not represent an excessive share of project cost. The government will finance taxes and duties

of $4.89 million through cash contribution. c Physical contingencies computed at 4.00% for civil works, field research and development, training, surveys, and studies. Price contingencies computed at an




30

H. Contract and Disbursement S-curve

0.00

50.00

100.00

150.00

200.00

250.00

300.00

Q4

/20

17

Q1

/20

18

Q2

/20

18

Q3

/20

18

Q4

/20

18

Q1

/20

19

Q2

/20

19

Q3

/20

19

Q4

/20

19

Q1

/20

20

Q2

/20

20

Q3

/20

20

Q4

/20

20

Q1

/20

21

Q2

/20

21

Q3

/20

21

Q4

/20

21

Q1

/20

22

Q2

/20

22

Q3

/20

22

Q4

/20

22

Q1

/20

23

Q2

/20

23

Q3

/20

23

Q4

/20

23

Contract Awards

Disbursement

Contract Awards Disbursement Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total

2017 0.0 0.0 0.0 1.5 1.5 0.0 0.0 0.0 0.0 0.0

2018 0.0 6.9 0.0 22.5 29.4 0.0 0.0 0.5 1.9 2.4

2019 0.0 0.0 18.0 20.1 38.1 0.0 1.2 3.3 15.2 19.7

2020 38.1 18.3 3.2 60.6 120.2 0.0 2.9 11.9 42.5 57.3

2021 28.3 20.3 0.0 0.0 48.6 0.0 2.2 18.6 51.8 72.6

2022 0.0 0.0 0.0 0.0 0.0 0.0 2.9 28.8 43.6 75.3

2023 0.0 0.0 0.0 0.0 0.0 26.7 0.0 0.0 0.0 26.7

Total 237.8 254.0 Note: Disbursements include capitalized amounts of interest for Asian Development Bank during construction and commitment fees. Original contract awards and disbursement targets (baseline projections) starting at effectiveness can only be revised during midterm review, after approval of major change, or approval of an extension of project duration of more than 12 months. Not including the financial intermediation component, see Project Administration Manual (Section B). Source: Asian Development Bank estimates.

31

I. Fund Flow Diagram

ADB = Asian Development Bank, FIC = financial intermediation component, PIU = project implementation unit, PMO = project management office, PRC = People’s Republic of China. Note: For ADB-EIB joint cofinanced contracts, withdrawal applications will be sent to ADB and EIB separately. Source: Asian Development Bank.

（Direct Payment)

Asian Development Bank

Four Project Cities Municipal Governments (Municipal Bureaus of Finance)

(Hegang, Jixi, Qitaihe, Shuangyashan) and their PMOs

Contractors, Suppliers, and Consultants

PIUs, Industrial Park Management Offices, Water Affairs Bureaus, Housing Bureaus, Transportation Bureaus

Loan

Ministry of Finance, PRC

Loan, Relending, Onlending

Repayment

On

len

din

g

Rep

aym

ent

Claim for Payment/ Withdrawal Application

Reimbursement/ Advance Account Procedure Relending

Payment

Heilongjiang Provincial Government (Provincial Bureau of Finance)

ADB Loan Advance Account (One account for investment and FIC)

32

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

26. The financial management assessment (FMA) was conducted in September 2016 in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects and the Financial Due Diligence: A Methodology Note. 16 The FMA considered the financial management capacity of HPG—the project executing agency—and the four implementing agencies: (i) HMG, (ii) JMG, (iii) QMG, and (iv) SMG. The assessment covered funds-flow arrangements, staffing, accounting and financial reporting systems, financial information systems, and internal and external auditing arrangements.17 A separate FMA was carried out for the financial intermediation component and is provided in PAM Section B: Financial Intermediation Component and Business Development Services Component. 27. Based on the assessment, the key financial management risks identified are (i) implementation risk: lack of familiarity with ADB disbursement procedures and requirements, which could delay project implementation; (ii) compliance risk: lack of familiarity with ADB financial management requirements, particularly on accounting, reporting, and auditing, which may delay project reporting and detailed identification of issues on the use of loan proceeds; (iii) financing risk: delays in provision of or inadequate counterpart funding which could delay project implementation. It is concluded that the overall premitigation financial management risk of the project executing agency and implementing agencies is moderate. The executing agency and implementing agencies have agreed to implement an action plan as key measures to address deficiencies.

28. The identified financial management risks and the implementation of agreed mitigation measures will need to be closely monitored during project implementation. The financial management action plan is provided in Table 19.

Table 19: Proposed Action Plan for Financial Management Action Responsibility Timing

1. Training on ADB disbursement procedures and requirements

Executing agency/HDRC/HFD/ implementing agencies/ADB

1 month before first disbursement

2. Training on ADB financial management requirements, including accounting and auditing, foreign exchange and interest rate risk management

Executing agency/HDRC/HFD/ Heilongjiang Provincial Audit Office/

implementing agencies/ADB

6 months after effectiveness

3. Recruitment of experienced consultants and skilled accountants to enhance operational capacities

Executing agency/HDRC/ implementing agencies

3 months after effectiveness

4. Development of financial management manuals

Executing agency/HFD/ implementing agencies/municipal

finance bureaus

Before loan effective date

16 ADB. 2005. Financial Management and Analysis of Projects. Manila; ADB. 2009. Financial Due Diligence: A

Methodology Note. Manila; ADB. 2015. Financial Management Technical Guidance Note: Financial Management Assessment. Manila.

17 The instrument used for the assessment is the financial management assessment questionnaire found in the ADB. 2015. Financial Management Technical Guidance Note: Financial Management Assessment. Manila; with consideration of the ADB. 2016. Country Partnership Strategy: People's Republic of China, 2016–2020. Manila; and the PRC’s Country Governance Risk Assessment (October 2015).

33

Action Responsibility Timing

5. Close monitoring to timely identify potential issues in counterpart funding


finance bureaus/ADB

At least once per year during project implementation

6. Discussion on possible interventions to review tariff structure and identify strategy for tariff reforms

Executing agency/HDRC/HFD/ implementing agencies/

municipal finance bureaus/ PIUs/ADB

First year of project implementation

7. Reinforce ongoing support in assessing and strengthening project financial management capacity at subprovincial levels through skills training (accounting and reporting), knowledge sharing (accrual accounting and risk- based internal control), and organizational reviews (internal audit)


finance bureaus/ADB

First year of project implementation

ADB = Asian Development Bank, HDRC = Heilongjiang Development and Reform Commission, HFD = Heilongjiang Finance Department, PIU = project implementation unit. Source: Asian Development Bank.

29. The project’s financial management arrangements with appropriate mitigation measures are considered satisfactory. B. Disbursement

Summary (i) Direct payment procedures for large contracts. (ii) Reimbursement procedures for eligible expenditures incurred and paid for by the

government out of its budget allocation or its own resources. (iii) Advance account

(a) The advance account will be established and maintained by Heilongjiang Finance Department (HFD), on behalf of Heilongjiang Provincial Government (HPG), after the loan becomes effective;

(b) HPG will be responsible for the proper use, management, replenishment, and liquidation of the advance account;

(c) The advance account will be exclusively used to finance ADB’s share of eligible expenditures; and

(d) The outstanding advance (initial and additional advances) to the advance account should not exceed the executing agency’s estimate of ADB’s share of eligible expenditures for the next 6 months, which are to be paid through the advance account.

1. Disbursement Arrangements for Asian Development Bank Funds

30. The loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time),18 and detailed arrangements agreed upon between the government and ADB. Online training for project staff on disbursement policies and procedures is available.19 Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control.

18 ADB. 2017. Loan Disbursement Handbook. Manila. Available electronically from the ADB website

(http://www.adb.org/documents/ loan-disbursement-handbook). 19 Disbursement eLearning: http://wpqr4.adb.org/disbursement_elearning

http://wpqr4.adb.org/disbursement_elearning

34

31. The implementing agencies will be responsible for all disbursement arrangements for expenditures related to the implementation of subcomponents, including (i) preparing disbursement projections, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) preparing withdrawal applications that will be submitted to ADB by HFD.

32. Each year, the required amount of counterpart funding is allocated by HFD and disbursed upon request from the implementing agencies. For ADB’s loan proceeds, withdrawal applications to ADB will be prepared by the PMO of each city on behalf of HFD. At the end of each year, realistic projections of contract awards and/or commitments and disbursement for the following calendar year will be made for an assessment and projection of ADB funds required to cover contract awards and/or commitments and disbursements for the ongoing loan. The PMOs will be responsible for preparing contract award/commitment and disbursement projections each year.

33. Direct payment procedure will generally be used for large civil works, equipment contracts, and consulting service contracts. The reimbursement procedure will be used as appropriate when the government initially funds ADB eligible expenditures from its own resources. 34. Advance fund procedure. HFD will establish an advance account promptly after loan effectiveness at a commercial bank. The currency of the advance account is the US dollar. The advance account is to be used exclusively for ADB’s share of eligible expenditures. The HFD who administers the advance account is accountable and responsible for proper use of advances to the advance account. 35. The total outstanding advance to the advance account should not exceed the estimate of ADB’s share of expenditures to be paid through the advance account for the forthcoming 6 months. The HFD may request for initial and additional advances to the advance account based on an Estimate of Expenditure Sheet20 setting out the estimated expenditures to be financed through the account for the forthcoming 6 months. Supporting documents should be submitted to ADB or retained by the borrower (HFD) in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time) when liquidating or replenishing the advance account.

36. Statement of expenditure procedure. The SOE procedure may be used for reimbursement of eligible expenditures or liquidation of advances to the advance account. Supporting documents and records for the expenditures claimed under the SOE should be maintained and made readily available for review by ADB's disbursement and review missions, upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit. 37. Before the submission of the first withdrawal application (WA), the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the government, together with the authenticated specimen signatures of each authorized person. The minimum value per WA is stipulated in the Loan Disbursement Handbook (2017, as amended from time to time). Individual payments below such amount should be paid (i) by the implementing agencies and subsequently claimed to ADB through reimbursement, or (ii) through the advance fund procedure, unless otherwise accepted by ADB. The borrower should ensure sufficient category and contract balances before requesting

20 Estimate of Expenditure sheet is available in Appendix 8A of ADB’s Loan Disbursement Handbook (2017, as

amended from time to time),

35

disbursements. Use of ADB’s Client Portal for Disbursements (CPD)21 system is encouraged for submission of withdrawal applications to ADB. 38. No withdrawals shall be made from the loan account until the government has certified to ADB that onlending agreement and project implementation agreement have been duly executed and delivered between HPG and the municipal governments. No withdrawals shall be made from cost categories 1B, 1D, 1F, and 1H as described in Table 15 and in the attachment to schedule 3 of the loan agreement, until the EIB loan agreement has been signed.

2. Disbursement Arrangements for Counterpart Fund

39. For the counterpart funds, the implementing agencies will allocate the designated funding for the project as specified in the loan and project agreements. Counterpart funds from the government will be disbursed and liquidated by the implementing agencies to contractors and service providers. The disbursement process will follow this process: (i) according to the progress of the contract, the project implementing units will submit disbursement requests to the respective project management office; and (ii) once approved, counterpart funds will be disbursed from the respective municipal finance bureau. C. Accounting

40. The HFD and each implementing agency will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the project following International Public Sector Accounting Standard for cash-based accounting. The HFD and each implementing agency will prepare consolidated project financial statements in accordance with the government's accounting laws and regulations which are consistent with international accounting principles and practices.22 D. Auditing and Public Disclosure

41. The HFD will cause the detailed consolidated project financial statements to be audited in accordance with International Standards on Auditing and/or equivalent national standards adopted by the PRC, by an independent auditor acceptable to ADB. The audited project financial statements together with the auditor’s opinion will be presented in the English language to ADB within 6 months from the end of the fiscal year by the HFD. 42. The audited entity financial statements, together with the auditor’s report and management letter, will be submitted in the English language to ADB within 1 month after their approval by the relevant authority. 43. The audit report for the project financial statements will include a management letter and auditor’s opinions, which cover (i) whether the project financial statements present an accurate and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting standards; (ii) whether the proceeds of the loan were used only for the

21 The CPD facilitates online submission of WA to ADB, resulting in faster disbursement. The forms to be completed

by the Borrower are available online at https://www.adb.org/documents/client-portal-disbursements-guide. 22 Applicable laws, regulations, and guidelines include the (i) Accounting Law of the PRC (2000); (ii) State-Owned

Construction Enterprise Accounting Control Regulations; (iii) Capital Construction Financial Control Regulations; and (iv) Accounting Methods of Projects Financed by the World Bank (reference No. 2000 [13]), an accounting regulation issued by the Ministry of Finance for all foreign aid-funded projects.

36

purpose(s) of the project; and (iii) whether the borrower or executing agency was in compliance with the financial covenants contained in the legal agreements (where applicable). 44. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor. 45. The government, HFD and implementing agencies have been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements.23 ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the borrower), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. 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. 46. Public disclosure of the audited project financial statements, including the auditor’s opinion on the project financial statements, will be guided by ADB’s Public Communications Policy 2011.24 After the review, ADB will disclose the audited project financial statements and the opinion of the auditors on the project financial statements no later than 14 days of ADB’s confirmation of their acceptability by posting them on ADB’s website. The management letter, additional auditor’s opinions, and audited entity financial statements will not be disclosed.25

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

47. All advance contracting and retroactive financing should be undertaken in conformity with ADB’s Procurement Guidelines (2015, as amended from time to time)26 and ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).27 The issuance of invitations for bids under advance contracting and retroactive financing will be subject to ADB approval. The borrower, HPG and implementing agencies have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the project.

23 ADB’s approach and procedures regarding delayed submission of audited project financial statements:

(i) When audited project financial statements are not received by the due date, ADB will write to the executing agency advising that (a) the audit documents are overdue; and (b) if they are not received within the next 6 months, requests for new contract awards and disbursement such as new replenishment of advance accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed.

(ii) When audited project financial statements are not received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement such as new replenishment of advance accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (a) inform the executing agency of ADB’s actions; and (b) advise that the loan may be suspended if the audit documents are not received within the next 6 months.

(iii) When audited project financial statements are not received within 12 months after the due date, ADB may suspend the loan.

24 Public Communications Policy: http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications 25 This type of information would generally fall under public communications policy exceptions to disclosure. ADB. 2011.

Public Communications Policy. Paragraph 97(iv) and/or 97(v). 26 ADB. 2015. Procurement Guidelines. https://www.adb.org/documents/procurement-guidelines 27 ADB. 2013. Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers. Manila.

https://www.adb.org/documents/guidelines-use-consultants-asian-development-bank-and-its-borrowers

http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications

37

48. Advance contracting. Advance contracts to be entered into may include goods, works, and consulting services contract packages. The steps to be concluded in advance may include (i) tendering, and bid evaluation for civil works packages; (ii) preparation of tender documents to procure materials and equipment; (iii) evaluation of bids; and (iv) recruitment of consultants. All other ADB policy requirements apply, i.e. safeguards compliance and others that are included in the loan agreement and/or project agreement. 49. Retroactive financing. The HPG and the four implementing agencies were advised that retroactive financing may only apply up to the maximum amount of the equivalent of 20% of the total ADB loan, to cover eligible expenditures incurred (works, goods, and consulting services) procured through advance contracting before loan effectiveness, but not more than 12 months before the signing of the loan agreement. B. Procurement of Goods, Works, and Consulting Services

50. This project involves procurement activities carried out entirely by ADB, ADB-EIB joint cofinancing following ADB guidelines, and EIB parallel cofinancing following EIB procurement guidelines. All ADB and ADB-EIB joint cofinanced procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines (2015, as amended from time to time). 51. Before the start of any procurement, ADB and the government will review the public procurement laws of the PRC Government and HPG to ensure consistency with ADB’s Procurement Guidelines (2015, as amended from time to time). 52. An 18-month procurement plan indicating goods, works, and consulting service contract packages and expected contract preparation and implementation timeline is in section C below. 53. International competitive bidding (ICB) will be used for civil works contracts estimated to cost over $40 million. National competitive bidding (NCB) will be used for civil works contracts estimated to cost over $100,000 up to $40 million. For goods and equipment, ICB will be used for contracts valued at above $5 million, while NCB will be used for goods and equipment from over $100,000 up to $5 million. For the first civil works and goods contracts to be procured through NCB, and for contracts estimated to be equal or above $10 million, the draft procurement documents in English (prequalification, invitations for bids, bidding documents, bid evaluation reports, draft negotiated contracts, and signed contracts) should be submitted for ADB prior review and approval regardless of the estimated contract amount. Subsequent procurement through NCB are subject to post review. 54. All consultants financed by ADB will be recruited according to ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).28 An estimated total of 1,004 person-months (107 international, 897 national) of consulting services are required to (i) support project management, monitoring, progress reporting, institutional strengthening, and capacity development for green city and integrated infrastructure planning, implementation, and operation; (ii) provide business development services capacity development for SMEs; (iii) conduct external resettlement and social, and environment safeguards monitoring and reporting; (iv) advise on initial project implementation start-up support including project management and procurement; and (v) conduct nonrevenue water reduction pilot capacity building to complement the water

28 Checklists for actions required to engage consultants by method available in e-Handbook on Project Implementation

at http://www.adb.org/documents/handbooks/project-implementation

http://www.adb.org/documents/handbooks/project-implementation/

38

supply component in Qitaihe. The consultants’ terms of reference for consulting services are in section D below. 55. Implementing agencies will engage qualified national consultants and design institutes by self-funding for preliminary and detailed design, construction supervision, and quality inspection. The HPG on behalf of the implementing agencies will engage a tendering agency, with previous experience from ADB and/or World Bank project procurement to support all project-related procurement activities. 56. For all civil works contracts and goods/installation contracts, separate service contracts for quality control and site supervision will be procured by the local governments independent of the civil works or goods/installation contracts using country procurement system requirements. C. Procurement Plan

Project Name: Heilongjiang Green Urban and Economic Revitalization Project

Country: People’s Republic of China Executing Agency: Heilongjiang Provincial Government

Project Procurement Classification: B Implementing Agencies: Hegang Municipal Government, Jixi Municipal Government, Qitaihe Municipal Government, and Shuangyashan Municipal Government

Procurement Risk: Moderate

Project Financing Amount: US$1,021,000,000 ADB and EIB Financing: US$530,000,000 Non-ADB Financing: US$491,000,000

Project Closing Date: 31 August 2023

Date of First Procurement Plan: 28 April 2017 Date of this Procurement Plan: 25 May 2017

1. Methods, Thresholds, Review and 18-Month Procurement Plan

a. Procurement and Consulting Methods, and Thresholds

57. Universal procurement will apply as per the blanket waiver of member country procurement eligibility restrictions approved by the ADB Board for operations where ordinary capital resources and a cofinancier’s resources are used to jointly to finance individual procurement package. Except as ADB may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

39

Method Threshold Comments

International competitive bidding for civil works

> $40,000,000 Invitation for bids, bidding documents, and bid evaluation and recommendation for contract awards will be subject to ADB’s prior review.

International competitive bidding for goods

> $5,000,000 Invitation for bids, bidding documents, and bid evaluation and recommendation for contract awards will be subject to ADB’s prior review.

National competitive bidding for civil works

> $100,000 and =< $40,000,000

The first NCB procurement documents for works, and all subsequent ones with an estimated contract value equal or above $10,000,000, should be submitted for prior ADB review and approval. Subsequent NCB procurement documents that are estimated below $10,000,000 will be subject to post review.

National competitive bidding for goods

> $100,000 and =< $5,000,000

The first NCB procurement documents for goods should be submitted for prior ADB review and approval. Subsequent NCB procurement documents will be subject to post review. a

Shopping for civil works =< $100,000 Post review

Shopping for goods =< $100,000 Post review

ADB = Asian Development Bank, EIB = European Investment Bank, NCB = national competitive bidding.

Method Comments

Quality- and cost-based selection

Five submissions: (i) shortlist, (ii) technical evaluation, (iii) financial evaluation and overall ranking of proposals, (iv) draft negotiated contract, and (v) signed contract. Use of this method is subject to ADB Guidelines on the Use of Consultants (2013, as amended from time to time), and paragraph 47 of ADB’s Project Administration Instructions 2.03.

Consultants’ qualifications selection

Four submissions: (i) evaluation of expressions of interest and request for proposals, (ii) technical and financial evaluation, (iii) draft negotiated contract, and (iv) signed contract. Use of this method is subject to ADB Guidelines on the Use of Consultants (2013, as amended from time to time), and paragraph 47 of ADB’s Project Administration Instructions 2.03.

Individual consultant selection

Two submissions: (i) proposal for engagement of consultant, including shortlist; and (ii) signed contract. Use of this method is subject to ADB Guidelines on the Use of Consultants (2013, as amended from time to time), and paragraph 47 of ADB’s Project Administration Instructions 2.03.

http://www.adb.org/sites/default/files/QCBS-SUBMISSION-3.doc

http://www.adb.org/sites/default/files/QCBS-SUBMISSION-3.doc

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b. Goods and Works Contracts Estimated to Cost $1 Million or More

58. The following table lists goods and works contracts for which the procurement activity is either ongoing or expected to commence within the next 18 months.

Package Number General Description

Estimated Value

($ million) Procurement

Method

Review [Prior /

Post/Post (Sampling)]

Bidding Procedure

Advertisement Date (quarter/year) Comments

Hegang

Goods

HG-G2 ITS intelligent signal control system and other facilities, maintenance vehicles, and equipment for bus operation (Package 1)

1.45 NCB Prior 1S1E Q2/2017 Advanced contracting, first NCB, and goods

HG-G3 Civil works and equipment installation for Hegang Luobei County high-tech graphite based materials and e-mobility industrial park WWTP

14.24 ICB Prior 1S1E Q1/2018

Works

HG-GX-W1 Civil works for Hegang industrial park (green food, green energy, and high-tech)—civil works for service center (3,200 m2)

1.64 NCB Post 1S1E Q1/2018

HG-GX-W2

Civil works for Hegang industrial park (green food, green energy, and high-tech)—road and associated piping works (Xiyi Road and Liyuan Road)

13.67 NCB Prior 1S1E Q1/2018

HG-GX-W3

Civil works for Hegang industrial park (green food, green energy, and high-tech)—road and associated piping works (Xisan Road)

3.27 NCB Post 1S1E Q3/2019

HG-MR-W4

Lingbei Kuangnan open pit mine geological environmental remediation

6.13 NCB Post 1S1E Q1/2018

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Estimated Value


Method

Review [Prior /


Bidding Procedure


HG-RR-W5

Civil works for Hegang river rehabilitation and cleanup for Shitou River 2.1 km; Xiaoheli River 6.75 km increasing flood protection to 1 in 50 years for climate proofing; Qianjin Creek 3.3 km; and Heli River (start point of Heli River to Junde Bridge to Gas Station 7.85 km increasing flood protection to 1 in 50 years

59.57 ICB Prior 1S1E Q3/2019 ADB-EIB joint cofinancing

Jixi

Goods

JX-G1 Jiguan District industrial park WWTP equipment and installation

4.73 NCB Post 1S1E Q1/2018

JX-G2 Jixi No. 3 WTP upgrading and expansion equipment and installation

6.57 NCB Post 1S1E Q1/2018 Equipment in this package is similar to JX-G1 package and locally available

Works

JXHS-HT-W1

Civil works for Hengshan District industrial park (high-tech graphite based materials and e-mobility)—road infrastructure and SME support facilities

15.49 NCB Prior 1S1E Q1/2018

JX-JG-W2 Civil works for Jiguan District industrial park WWTP and sewer pipe network

9.16 NCB Post 1S1E Q2/2018

JXHS-MR-W3

Civil works for Hengshan District Hongqi Lake north side mining wasterock dumpsite ecological environmental remediation

9.11 NCB Post 1S1E Q2/2018

JXHS-RR-W4

Civil works for Hengshan District integrated river

7.96 NCB Post 1S1E Q3/2019 ADB-EIB joint cofinancing

42


Estimated Value


Method

Review [Prior /


Bidding Procedure


rehabilitation for Anle Creek 750 m and Huangni River 7.7 km

JXHS-RR-W5

Civil works for Hengshan District integrated lake rehabilitation of Hongqi Lake 23.51 ha


JXHS-UR-W6

Civil works for Training Facility and community center (technical training, mining impact monitoring center, gym, and library)

9.88 NCB Post 1S1E Q1/2018

JXHS-RC-W7

Hengshan District roads improvement—Jiaotong Road civil works for bypass bridge

8.55 NCB Post 1S1E Q1/2018

JX-WT-W8 Civil works for Jixi No. 3 WTP upgrading and expansion

4.36 NCB Post 1S1E Q2/2018

Qitaihe

Goods

QH-G1

Water Treatment Plant equipment and installation

10.33 ICB Prior 1S1E Q3/2018

Works

QH-GF-W1 Qitaihe Industrial Park (green food and pharmaceutical biofermentation)—civil works for SME support facilities

9.79 NCB Post 1S1E Q1/2018

QH-W2 Qitaihe Industrial Park (green food and pharmaceutical biofermentation)—civil works for roads and associated facilities

7.01 NCB Prior 1S1E Q1/2018 Advance contracting First NCB civil works

QH-MR-W3 Civil works for Taoshan Mine Remediation and environmental rehabilitation

3.02 NCB Post 1S1E Q3/2017

QH-WS-W6 Civil Works for water transmission and distribution system replacement and expansion

17.96 NCB Prior 1S1E Q4/2018 ADB-EIB joint cofinancing

Shuangyashan

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Estimated Value


Method

Review [Prior /


Bidding Procedure


Works

SY-SM-W1 Civil works for Shuangyashan business park—SME support facilities (15 buildings, roads and road hardening, water heating center, electrical, and fire protection facilities)

8.87 NCB Post 1S1E Q3/2018

SY-CR-W2 Civil works for Shuangyashan business park—roads and water and wastewater pipes (Jingmao Road, Maoyi South Road, Wusi Road, and Zhong'e North Road)

21.44 NCB Prior 1S1E Q1/2018

SY-MR-W3 Civil works for Lingdong District Xiaoxishan mine wasterock dumpsite remediation

2.73 NCB Post 1S1E Q1/2019

SY-UR-WS4

Water transmission pipes for East Ring Road, West Ring Road, and the connection pipes for East Ring Road to Yishoushan, Yishoushan water storage tank, Hancong WTP water storage tank, Dongshan water storage tank, Nanshan water storage tank and operation room Water Supply: Donghuan Road and Xihuan Road water transmission pipes, Donghuan Road to Yishoushan water connection pipes and two pump stations, drainage pipes for Hancong Creek WTP, and water supply pipes (Tongda Bridge to No. 1 Road)


SY-RC-W7 Civil works for South Ring Road including associated drainage and sewer, lighting,

19.14 NCB Prior 1S1E Q3/2017 Advanced contracting first NCB works

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Estimated Value


Method

Review [Prior /


Bidding Procedure


electrical and communication cables, and bridge

SY-RC-W8 Civil works for Yunfengshan Road Connection

22.52 NCB Prior 1S1E Q1/2018

SY-RC-W9 Civil works for Xinxing Avenue connection including associated drainage and sewer

22.55 NCB Prior 1S1E Q1/2018

1S1E = single-stage: one envelope, ADB = Asian Development Bank, EIB = European Investment Bank, ha = hectare, ICB = international competitive bidding, km = kilometer, m = meter, m2 = square meter, NCB = national competitive bidding, WTP = water treatment plant, WWTP = wastewater treatment plant.

c. Consulting Services Contracts Estimated to Cost $100,000 or More

59. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.


Estimated Value

($ million) Recruitment

Method Review

(Prior / Post)

Advertisement Date

(quarter/year) Type of

Proposal Comments

CS1a Project implementation consulting services for project management support and capacity development

6.943 QCBS

Prior Q3/2017 FTP Advanced contracting quality: cost ratio of 90:10

CS2 Business development services for SMEs

5.972 QCBS

Prior Q2/2018 FTP Advanced contracting quality: cost ratio of 90:10

CS3 External resettlement and social monitoring and external environment monitoring services

1.08 QCBS

Prior Q2/2018 FTP quality: cost ratio of 80:20

CS4 Consulting services for NRW pilot in Qitaihe

0.18 CQS Prior Q1/2018 FTP

BTP = biodata technical proposal, CQS = consultants’ qualifications selection, FTP = full technical proposal, NRW = nonrevenue water, QCBS = quality- and cost-based selection, SMEs = small- and medium-sized enterprises.

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a A budget of $1,000,000 for training will be included in this package and preparation of a training and study tour plan and arranging the trainings and tours is included in the terms of reference of this consulting package.

d. Goods and Works Contracts Estimated to Cost Less than $1 million and Consulting Services Contracts Less than $100,000 (Smaller Value Contracts)

60. The following table groups smaller-value consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Goods and Works Contracts

Package Number

General Description

Estimated Value

($ million) Number of Contracts

Procurement / Recruitment

Method

Review (Prior / Post)

Advertisement Date (quarter/

year) Type of

Proposal Comments

JX-G3 Jixi No. 3 WTP upgrading and expansion lab equipment

0.52 1 NCB Post Q4/2018 1S1E

Consulting Services Contracts

CS5 (various individual consultants)

Project implementation start-up support consulting services

0.170 (total)

6 ICS Prior Q3/2017 National assignment

Advance contracting, each contract is below $100,000

CS 5.1 Project Procurement and Management Specialist

0.031 1 ICS Prior Q3/2017 EOI 3 person-months

CS 5.2 Resettlement Specialist


CS 5.3 Environment Specialist


CS 5.4 Project and SME Financial Management Specialist


CS 5.5 SME Business Strategy Specialist


CS 5.6 SME Sector Specialist


EOI = expression of interest, ICS = individual consultant selection.

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2. Indicative List of Packages Required under the Project

61. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project, other than those mentioned in previous sections (i.e., those expected beyond the 18-month period). Not applicable.

3. List of Awarded and On-going, and Completed Contracts

62. The following tables list the awarded and on-going contracts, and completed contracts. Not applicable.

a. Awarded and Ongoing Contracts

Not applicable. b. Completed Contracts

Not applicable.

4. Non-ADB Financing

63. The following table lists goods, works, and consulting services contracts over the life of the project, financed by non-ADB sources.

Goods and Works

General Description Estimated Value

($ million) Estimated Number

of Contracts Procurement

Method Comments

Hegang

HG-G1: ITS intelligent signal control system and other facilities, maintenance vehicles and equipment for bus operation (Package 2)

3.79 EIB Q1/2018

HG-DH-W6: Civil works for district heating system pipe retrofit (primary and secondary pipes replacement in 2017)

2.90 NBF 2017

HG-DH-W7: Civil works for district heating system pipe retrofit (primary and secondary pipes replacement in 2018) and pilot of heating for buildings

11.15 EIB Q4/2017

47

Goods and Works




Method Comments

HG-DH-W8: Civil works for district heating system pipe retrofit (primary and secondary pipes replacement in 2019)

7.12 EIB Q4/2018

HG-IT-W9: Road rehabilitation, public, and non-motorized transport improvements: bus lanes works, roads resurfacing, bus bays, new drain pipes and intersections; and ITS works (Meijian Road, Hubei Road, Gongyuan Road, Guangming Road, Tianxiang Road, Changsheng Road, Gongjiao Road, West Jiefang Er Road, No. 5 Road, No. 9 Road, Tianqiao Road, Fendou Road, and West Jiefang No. 4 Road)

11.16 NBF 2017

HG-IT-W10: Road rehabilitation, public, and non-motorized transport improvements: bus lanes works, roads resurfacing, bus bays, new drain pipes and intersections; and ITS works (Qizhong Road, Caifu Road, Donggang Road, Nanyi Road, Tiexi Road, Xinhe Road, Yucai Road, Hongjun Road, North Hongqi Road, South Hongqi Road and Gongnong Road)

13.61 EIB Q4/2017

HG-IT-W11: Road rehabilitation, public, and non-motorized transport improvements: bus lanes works, roads resurfacing, bus bays, new drain pipes and intersections; and ITS works (Old Jieji area upgrade, Meicheng Road, East Inner Ring Road, West Inner Ring Road, and Xuefu Road)

10.12 EIB Q4/2018

HG-IT-W12: Road rehabilitation, public, and non-motorized transport improvements: bus lanes works, resurfacing, bus bays, new drain pipes and intersections; and ITS works (East Jiefang Road Erdaojie Extension, New Jieji Area upgrade, Xiangyang Road, Old Jieji Road, and East Jiefang Road Sidaojie)

5.89 EIB Q4/2019

HG-RR-W13: Civil Works for flood protection Gabion to reach 1 in 20-year flood protection standard on Xiaoheli River 1.94 and Helihe River 4.82 km

2.59 NBF 2017

Jixi

JX-WW-W9: Civil works and equipment supply and installation for Xingfa drainage pump station, Shuianjie pump station, Zhongxing pump station and metallurgical company pump station in Jixi

1.47 EIB Q4/2018

48

Goods and Works




Method Comments

JX-WW-W10: Civil works for cross bridge sections and culverts of Jixi drainage and sewer pipes

3.26 NBF Q1/2019

JX-WW-W11: Lot A: Civil works for drainage and sewer pipes in Northwest Main City area Lot B: Civil works for drainage and sewer pipes in southeast area

10.31 2 EIB Q1/2019

JX-WS-W12: Civil works for water supply pipe refurbishment in Jixi (Dongshan Area) Civil works for water supply pipe refurbishment in Jixi (other areas)

7.51 EIB Q1/2018

JX-WS-W13: Civil works for water supply pipe refurbishment in Jixi (Liangxi Area)

4.93 EIB Q4/2019

Qitaihe

QH-G2 Shengke WTP equipment and installation 12.51 ICB Q3/2018

QH-3: Water transmission and distribution replacement and expansion: equipment and installation for Xibu Mine Area and Longhu Mine Area lift stations, water meters, and flow meters.

7.31 EIB Q4/2018

QH-4: Water transmission and distribution replacement and expansion: equipment and installation for pipe materials

12.86 EIB Q4/2018

QH-5: Equipment procurement and installation for NRW pilot (leakage detection equipment, SCADA system, flow meters, and software)

1.15 EIB Q1/2018

QH-6: Electric public bus purchase (209 units) 21.46 EIB Q2/2018

QH-7: System upgrading for control center 1.16 EIB Q3/2018

QH-WT-W4: Civil works for Water and Wastewater Company WTP

12.66 EIB Q2/2018

QH-WT-W5: Civil works for Shengke WTP 8.10 EIB Q2/2018

QH-IT-W7: Civil works for three bus terminals (Taoshan District, Qiezihe District, and Xinxing District

12.04 EIB Q2/2018

Shuangyashan

SY-G1: Water Supply: equipment and installation of two new lift stations (East Ring Road 23,000 m3/d and West Ring Road 20,000 m3/d)

2.76 EIB Q3/2018

SY-G2: Water Supply: equipment and installation for 143 water flow meters, dispatching system, and SCADA system.

1.29 EIB Q3/2018

49

Goods and Works




Method Comments

SY-G3: Water transmission pipes for East Ring Road, and West Ring Road, and connection pipes for East Ring Road to Yishoushan

2.66 EIB Q3/2018

SY-G4: Laboratory testing equipment and Installation

0.45 EIB Q2/2019

SY-UR-WW5: Civil works for drainage and sewer in Jianshan District: No. 1 Road to No. 5, and South City Area Civil works for drainage and sewer in Jianshan District: No. 5 Road to Jiuyang Road Civil works for sewer pipes in Lingdong District

11.46 EIB Q1/2018

SY-UR-WW6: Civil Works for drainage and sewer in Jianshan District: Jiuyang Road North

14.12 EIB Q1/2019

EIB = European Investment Bank, ITS = intelligent transport system, km = kilometer, m3/d = cubic meter per day, NBF = nonbank financing, SCADA = supervisory control and data acquisition, WTP = water treatment plant.

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5. National Competitive Bidding

a. Regulation and Reference Documents 64. The procedures to be followed for national competitive bidding shall be those set forth in The Government Procurement Law of People’s Republic of China approved on 29 June2002 and Law of the People’s Republic of China on Bid Invitation and Bidding of the People’s Republic of China promulgated on August 30, 1999 with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the ADB Procurement Guidelines.

b. Procurement Procedures

(i) Competitive Bidding Procedure (Procurement Law Art. 26 and Law on Bidding Art. 10).

65. Public tendering is the acceptable method of government procurement, and public invitation is the accepted bid invitation mode.

(ii) Eligibility

66. The eligibility of bidders shall be as defined under section I of the Procurement Guidelines; accordingly, no bidder or potential bidder should be declared ineligible for reasons other than those provided in section I of the Procurement Guidelines, as amended from time to time. The blanket waiver for country eligibility applies for contracts that are jointly cofinanced by ADB and EIB.

(iii) Advertising

67. All invitations to prequalify or to bid shall be advertised in the national press (China Daily Newspaper) or a free and open access website (www.chinabidding.com). Such advertisement shall be made in sufficient time for prospective bidders to obtain prequalification or bidding documents and prepare and submit their responses. In any event, a minimum preparation period of twenty-eight (28) days shall be given. The preparation period shall count (a) from the date of advertisement, or (b) when the documents are available for issue, whichever date is later. The advertisement and the prequalification and bidding documents shall specify the deadline for such submission.

(iv) Bidding Period

68. The minimum bidding period is 28 days prior to the deadline for the submission of bids.

(v) Participation by Government-Owned Enterprises 69. Government owned enterprises in the Borrower’s country may be permitted to bid if they can establish that they (a) are legally and financially autonomous, (b) operate under commercial law, and (c) are not a dependent agency of the Borrower/Project Executing Agency.

(vi) Rebidding

70. Re-bidding shall not be allowed solely because the number of bids is less than three (3).

http://www.chinabidding.com/

51

c. Bidding Documents

(i) Qualification Requirements 71. Qualification requirements of bidders and the method of evaluating the qualification of each bidder shall be specified in detail in the bidding documents, and in the prequalification documents if the bidding is preceded by a prequalification process.

(ii) Bid Submission and Opening

72. Bidders shall be allowed to submit bids by mail or by hand.

73. All bids shall be opened in public; all bidders shall be afforded an opportunity to be present (either in person or through their representatives) at the time of bid opening, but bidders shall not be required to be present at the bid opening.

(iii) Bid Evaluation and Award

74. No bid may be rejected solely on the basis that the bid price falls outside any standard contract estimate, or margin or bracket of average bids established by the Borrower and/or Project Executing Agency.

75. Each contract shall be awarded to the lowest evaluated responsive bidder, that is, the bidder who meets the appropriate standards of capability and resources and whose bid has been determined (a) to be substantially responsive to the bidding documents and (b) to offer the lowest evaluated cost. The winning bidder shall not be required, as a condition of award, to undertake responsibilities for work not stipulated in the bidding documents or otherwise to modify the bid as originally submitted.

d. Asian Development Bank Policy Clauses

76. Each contract financed with the proceeds of the Loan shall provide that the suppliers and contractors shall permit ADB, at its request, to inspect their accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by ADB. 77. A provision shall be included in all bidding documents for NCB works and goods contracts financed by ADB stating that the Borrower shall reject a proposal for award if it determines that the bidder recommended for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for the contract in question. 78. A provision shall be included in all bidding documents for NCB works and goods contracts financed by ADB stating that ADB will declare a firm or individual ineligible, either indefinitely or for a stated period, to be awarded a contract financed by ADB, if it at any time determines that the firm or individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices or any integrity violation in competing for, or in executing ADB-financed contract.

52

D. Consultants’ Terms of Reference 79. The consulting services to be financed by the loan include six packages: (i) CS1: Consulting services for project management and implementation support and capacity development and training (international firm); (ii) CS2: Business development services capacity development to SMEs consulting services; (iii) CS3: External resettlement and social monitoring and external environment monitoring services (national institute); CS4: Consulting services for non-revenue water (NRW) reduction piloting in Qitaihe (national institute); and (v) Package bundle CS5: Project implementation startup consultant support (6 individual national consultants). 80. The scope and tasks of the consulting services financed by the loan are described below. The HDRC on behalf of the HPG will support the four implementing agencies engaging the six consulting service contract packages (including the package bundle) in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).

81. In addition to the consulting services financed by the loan, domestically funded consulting services will also be recruited by the PMOs. The HDRC, in coordination with the PMOs, will recruit a tendering agency to provide tendering support, including preparation of bidding documents, invitation for bids and bid evaluation reports, and engage domestic design institutes to carry out preliminary and detailed designs. Construction supervision engineers will also be recruited for overseeing and inspecting the construction sites to ensure compliance with national regulations, safety standards, and ADB requirements. Different engineering consultants will be recruited for the design of different subcomponents in river rehabilitation, road construction, water and wastewater, mine remediation, intelligent transportation system support, etc. The PMOs in coordination with the PIUs will recruit external EMP to monitor the EMP implementations.

Table 20: Overview of Consulting Services Contract Packages No. Package Name Details

1. Packages Financed by the ADB Loan

CS1 Project implementation consulting services and project management support and capacity development

An international firm with international and national experts. Selected by PMOs with support from the HDRC using ADB’s QCBS (90:10) selection method. Expected duration: 5 years. Financed by the loan.

CS2 Business development services capacity development to SMEs consulting services

Selected by the HPG on behalf of the implementing agencies using ADB’s QCBS (90:10) selection method. Expected duration: 5 years. Financed by the loan.

CS3 External resettlement and social monitoring and external environment monitoring services

A national firm with national experts. Selected by PMOs with support from the HDRC using ADB’s QCBS (80:20) selection method. Expected duration: Intermittent input from project start to 2 years after the completion of resettlement, social and gender, and environment monitoring activities. Financed by the loan.

CS4 Consulting services for non-revenue water (NRW) reduction piloting in Qitaihe

A national firm with national experts. Selected by the QPMO through ADB’s CQS selection method. Expected duration: 1 year. Financed by the loan.

CS5 Project implementation start-up support consulting services

Contract bundle with individual consultants: Project Procurement and Management Specialist, Resettlement Specialist, Environment Specialist, Project and SME Financial Management Specialist, SME Business Strategy Specialist, and SME Sector Specialist Expected duration of intermittent input: 16 months. Selected by PMOs with support from the HDRC through ADB’s ICS selection method. Financed by the loan.

2. Packages Financed by Counterpart Funds

1 National design institutes The PMOs in coordination with PIUs will engage and finance domestic design institutes to carry out preliminary and detailed

53

No. Package Name Details engineering designs. Domestic procurement regulations will be

followed. 2 National tendering agency The HPG on behalf of the implementing agencies will engage a

domestic tendering agency with experience in ICB and NCB bidding for ADB projects.

3 National construction supervision engineers

The PIUs will engage a domestic consultant for each works contract following domestic regulations on engineering supervision and procurement. Expected duration: from 1 month before the commencement of construction works to 1 month after the completion.

3. Package Financed by ADB Financial Sector Development Partnership Special Fund,a Attached Technical Assistance Grant, TA Heilongjiang Business Development Services Support to Strengthen Financial Intermediation Component Implementationb

Attached TA

Consulting services for capacity development TA for Heilongjiang Business Development Services Support and ESMS screening and monitoring

The TA will be administered by ADB and TA consultants will be engaged through ADB’s QCBS (90:10) selection method using full technical proposal. Expected duration: 5 years. HPG and the project cities will be the implementing agencies.

ADB = Asian Development Bank, CQS = consultant qualification selection, ESMS = environmental and social management system, HDRC = Heilongjiang Development and Reform Commission, HPG = Heilongjiang Provincial Government, ICB = international competitive bidding, ICS = individual consultant selection, NCB = national competitive bidding, PIU = project implementation unit, PMO = project management office, QCBS = quality- and cost-based selection, SMEs = small- and medium-sized enterprises, TA = technical assistance. a Established by the Asian Development Bank. Financing partner is the Government of Luxembourg. b Outline terms of reference for consultants for the attached TA is in the Linked Document: Attached Technical

Assistance. Source: Asian Development Bank.

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D1. Consultant’s Terms of Reference for Consulting Services Package CS1: Project Implementation Consulting Services for Project Management Support and Capacity Development 1. Consultant inputs

82. Project management consulting services for project implementation support and capacity development will be engaged through QCBS selection method with a standard quality: cost ratio of 90:10 with the full technical proposal procedure. The estimated input includes 67 person-months of international consultant input and 628 person-months of national consultant input. Table 1 shows the summary of specialists’ inputs. All international specialists must have a relevant academic degree and at least 12 years (team leader: at least 15 years) of relevant project experience. Work experience in the PRC will be an advantage. All national specialists must have a relevant academic degree and at least 7 years (deputy team leader: at least 15 years) of relevant work and project experience. National specialists should be fluent in English and experience from working with international agencies will be an advantage.

Table 21: Summary of Consultant Inputs

Area of Expertisea International

(person-months) National

(person-months)

1 Project Management Municipal Engineer (team leader) 15

2 Deputy team leader and/or construction management specialist 45 3 Project management and site supervision engineers (four

positions) 240

4 Financial management and disbursement specialist 4 55 5 Procurement and contract management specialist 42 6 River rehabilitation green Infrastructure specialists 3 14 7 Water and wastewater specialist 2 16 8 Industrial wastewater specialist 6 9 Nonrevenue water specialists 2 8

10 SCADA and MIS specialists 3 6 11 Mining remediation specialists 6 16 12 Road and traffic safety specialist 16 13 Traffic management specialist 8 14 Social development and gender specialist 12 15 Resettlement specialist 4 30 16 Environment specialist 4 30 17 Industrial park management and SME cluster specialists 4 8 18 Tourism and place branding specialists 4 8 19 ICT and smart city applications specialists 4 16 20 TVET specialists 4 8 21 PPP specialist 6 22 Asset management specialists 2 8 23 Capacity building specialist 14 24 Public environmental awareness campaign specialists 2 8 25 Institutional specialists: utility management (Qitaihe Water) 2 4 26 Business planning specialists (Qitaihe Water Supply) 2 4

Total person-months 67 628

ICT = information and communication technology, MIS = management information system, PPP = public-private partnership, SCADA = supervisory control and data acquisition, TVET = technical and vocational education and training. a In addition some specialists will be engaged as resource persons to carry out specific training programs and events. Source: Asian Development Bank estimates.

83. The consulting services package CS1 will include:

(i) Project management support focusing on directly supporting the PMOs and PIUs in all aspects related to project management, implementation, monitoring,

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reporting, procurement, contract management and financial management; and

(ii) Capacity development including institutional development, practical training and policy dialogue with PMOs, PIUs, and concerned local government agencies to improve knowledge and management skills to ensure project investment sustainability, and enable smooth implementation and sustainable operation and maintenance of the project facilities and enhancing the benefits and synergies from the investments and ensuring the sustainability of the investment project. It includes the following capacity development modules (CDMs): (a) CDM 1: Capacity development for PMOs and PIUs staff on ADB policies,

procedures and technical requirements on procurement, contract management, technical supervision and quality control, financial management, environmental and social safeguards, monitoring and evaluation and reporting to enable them to efficiently fulfill tasks effectively and efficiently; and

(b) CDM 2–8: Institutional capacity development and policy dialogue for the concerned implementing agencies and government agencies, PMOs and PIUs include but is not limited to (1) CDM 2: City cluster cooperation among the four cities in East Heilongjiang in areas of place branding, tourism marketing, trade and logistics, supply chain integration facilitation, SME development and jobs and training market using smart city technology; (2) CDM 3: Labor force assessment and human resource development, and Technical and Vocational Education and Training (TVET) development and trainer training; (3) CDM 4: Industrial park management and SME cluster development promotion; (4) CDM 5: Mining remediation master planning, pilot design and implementation, and establishment of mechanisms for replication; (5) CDM 6: urban-rural flood risk and ecological river management - climate resilience and sponge city capacity development; (6) CDM 7: wastewater and industrial wastewater management system design, construction, management, operation, services and tariff reform; and (7) CDM 8: sustainable urban transport, intelligent transport systems, road and traffic safety, and public transport management.

2. Project Management Support

84. This part of the consulting services will focus on the support to PMO and PIUs on all aspects related to project management and implementation. Experts involved will include the team leader, deputy team leader, project management and site supervision engineers, river rehabilitation and green infrastructure specialist, road and traffic safety specialist, water and wastewater specialist and industrial wastewater specialist, procurement and contract management specialist, financial management specialist, social development and gender specialist, resettlement specialist, environment specialist, and other specialists as needed. The scope will include but not be limited to (i) developing a project performance management system (PPMS) for the project, (ii) assistance with procurement including support to advance contracting, retroactive financing, and contract management; (iii) construction monitoring; (iv) funds withdrawal, reimbursement, and financial management; (v) monitoring the implementation of environmental and social safeguards; (vi) daily liaison and communication with ADB; (vii) assisting with organization and coordination for ADB loan review missions; (viii) preparing required reports under the loan agreement; and (ix) monitoring compliance with loan covenants and assurances. These services will be provided by a team of international and national specialists led by an

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international and a national project management specialist and team leader/deputy team leader and comprising project management specialist/deputy team leader; and national environmental safeguard specialist; resettlement safeguards specialist; social development, gender and community participation specialist; procurement and contract management specialist; financial management and disbursement specialist; economic specialist; financial specialist; and international technical engineers for river rehabilitation and traffic. 85. Detailed tasks include but are not limited to the following:

(i) setting up of organizational structure, operational procedures, reporting and filing system, and formulate work plans;

(ii) establishing PPMS, including defining baseline data, data collection and analysis, reporting mechanism, and regular updates of PPMS in line with ADB’s requirements;

(iii) providing technical support for advance procurement, and supporting the tendering agency, including review for procedural compliance, review of bidding documents, review of bid evaluation results, review of contracting documents and contract negotiations, to ensure that the advance contract packages are in compliance with ADB’s policies and procedures;

(iv) providing support for procurement, and supporting the National Tendering Agency, including review for procedural compliance, review of bidding documents, review of bid evaluation results, review of contracting documents and contract negotiations, to ensure that the tendering complies with ADB’s policies and procedures;

(v) assisting the PMOs in preparing contract variations, including revisions, reviews and confirmations, and preparing, submitting and updating the contract variation documents in accordance with PRC and ADB requirements, covering the contents of variations, rationales, environmental due diligence and revisions to the environmental management plan;

(vi) assisting the PMOs in the updating, implementation and monitoring of resettlement plans;

(vii) on behalf of the PMOs, coordinating with the National Construction Supervision Company to review construction quality and progress, and provide recommendations and advice to rectify problems that may occur;

(viii) establishing a project financial management system in conformity with ADB’s policies and procedures, and assisting with fund withdrawals and reimbursement, including forecasts and applications for replenishment of the advance account, review of fund withdrawal application reimbursement documents, periodic compilation of ADB disbursements, and review and completion of provision and utilization of counterpart funds;

(ix) regularly updating project financial information, including the investment plan and financing plan;

(x) assisting the PMOs in reviewing annual audits of the project account, and coordinating the submission of the annual audit reports and responses to ADB comments;

(xi) reviewing and revising as needed the environmental management plan (EMP), and the social and gender action plan (SGAP) as well as inspecting the implementation of EMP including public consultations, and prepare, submit and update related periodic monitoring reports in accordance with covenants of the loan agreement;

(xii) assisting the PMOs in daily communication with ADB, including drafting communication documents and responses to ADB’s information requests;

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(xiii) providing necessary assistance to PMOs for ADB loan review missions, including liaison, mission schedule and data collection, as well as coordinating relevant matters related to signing of the MOU;

(xiv) assisting the PMOs to prepare and submit the semiannual project progress reports, environmental monitoring reports, resettlement monitoring reports in conformity with the assurances/covenants of the loan and project agreements, and revise the reports in response to comments from ADB;

(xv) monitoring and reporting on compliance with Loan covenants; (xvi) assisting the PMOs to organize the loan midterm review, including pre-mission

preparation and coordination, preparing all required documents (tendering process, procurement progress, engineering progress, fund withdrawal and disbursement progress, financial reevaluation, economic reevaluation, environmental reevaluation, resettlement reevaluation, project scope adjustment and justifications, environmental and resettlement due diligence), updating the procurement plan, and revising post-mission documents with all major experts participating in the entire process;

(xvii) assisting the PMOs to complete the project completion report (PCR) and all related work, including advance preparation and coordination for the ADB review mission, preparing and revising all required reports for the PCR, covering tendering documents, procurement, construction, fund withdrawal and disbursement, financial reevaluation, economic reevaluation, environmental reevaluation, resettlement reevaluation with the main specialists from the team participating in the entire ADB missions; and

(xviii) completing other tasks that may be assigned by the PMO from time to time. 3. Capacity Development

(a) CDM 1: Capacity Development for Project Management Office and Project Implementation Staff

86. The purpose of this CDM is to provide adequate knowledge and skills to PMOs and PIUs staff to ensure operational knowledge attainment on ADB policies and procedures and project management-related aspects (PPMS, procurement, financial management, contract management, fund withdrawal, disbursement, EMP and environmental safeguard monitoring, and social safeguard monitoring including resettlement plan, and SGAP). The project management support team of specialists will be providing these services. Experts involved will include a team leader, a deputy team leader, project management and site supervision engineers, river rehabilitation and green infrastructure specialist, road and traffic safety specialist, water and wastewater specialist and industrial wastewater specialist, procurement and contract management specialist, financial management specialist, social development and gender specialist, resettlement specialist, environment specialist, and other specialists as needed. 87. Detailed tasks include but are not limited to the following:

(i) during inception period, under the leadership of PMOs, preparing a detailed training needs assessment and training plan that will cover training objectives, trainees, contents, location, time, training modality and budget, facilitating and institutionalizing a cross-departmental mechanism of regular meetings for project management and knowledge sharing to be hosted by the respective city PMO and with participation of all PIUs and other concerned agencies and inviting concerned stakeholders and experts as needed;

(ii) organizing and providing training on, but not limited to, technical engineering

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design, environmental and engineering standards and compliance with regulation and good design practices, sustainable operation and maintenance of project facilities, financial and economic viability assessments, ADB’s policies and procedures, PPMS, procurement, financial management, contract management, fund withdrawal and disbursement, reimbursement, EMP and environment monitoring including monitoring progress of environmental improvements from the project, monitoring safeguard policy compliance including the updating, implementation and monitoring of resettlement plan, social development action plan, GAP, and other related trainings as required by PMO;

(iii) organizing on-the-job training, local training events like seminars and workshops, and training on technical matters related to the project to share lessons from good practice projects in areas relevant to the project, including co-benefits from multi-sector projects that comprehensively include economic and urban development and transformation from a resource-based to a diverse and knowledge-based economy in the PRC and internationally;

(iv) drafting a program of domestic and overseas training and study tours according to PRC guidelines and budget to locations with good practices for integrated flood risk management, ecological river management, water supply and wastewater management, and road safety management and public transport; and

(v) supporting the preparation of project progress reports, monitoring reports, site supervision reports, photo documentation of project progress, stakeholder and public participation, project completion report; preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

88. The following capacity development modules are institutional capacity development and policy dialogue services and they will be prepared and provided by the Project Management and Capacity Development Consultant Team and they can be supported by short term resource persons with specialist expertise, and recruited and guided by the Team Leader and Deputy Team Leader. The capacity development modules (CDM) include the following:

(b) CDM 2: City Cluster Cooperation and Smart City Applications Capacity Development

89. This capacity development module will contribute to the institutionalization of cooperation and coordination mechanisms among the four cities in East Heilongjiang. The module will focus on place branding, tourism marketing, urban, economic, environmental and image transformation, trade and logistics, supply chain integration facilitation, SME development and jobs and training market using smart city technology. Experts from the consultant team and additional resource persons as needed will include tourism and place branding specialist, trade and logistics specialist, industry supply chain specialist, industrial park management and SME cluster specialists, ICT and smart city applications specialist, and other specialists as needed. Coordination and cooperation between this CDM and consulting services under CS2 will be necessary. This module will include the following scope and tasks but not limited to:

(i) regional visioning and planning and coordination mechanism involving various departments of the project cities in East Heilongjiang and meeting regularly and discussing cooperation and shared investment programs;

(ii) liaising with the government agencies of the four cities and supporting and facilitating shared platform development building on the four implementing agencies’ smart city infrastructure and using smart city applications, big data and

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open data, and providing user-friendly interfaces and smart phone applications; (iii) promoting tourism tours, maps and services integration promotion strategies,

place branding concepts, and joint tourism marketing as part of the non-coal pillar industries of the four cities promoting economic diversification;

(iv) promoting industry cluster development in East Heilongjiang through a link to the SME platform built for each city under the BDS contract and facilitating regional supply chain integration expansion;

(v) the shared platform for the project cities will also enable improved trade and logistics that link with other PRC markets and across the border with the Russian Federation.

(vi) supporting the non-coal diversification as overarching objective of the project and as identified during project preparation through the diversification roadmap;

(vii) promoting a regional eco-system approach and facilitating cooperation among the urban and economic, and tourism and environmental protection bureaus in relation to the transformation of East Heilongjiang’s image from a dirty coal region to a green environment as an element of place branding for tourism marketing, city visioning, and planning exercises;

(viii) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and

(ix) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC, and other ADB developing member countries. (c) CDM 3: Capacity Development for Labor Force Assessment and

Human Resource Development, and Technical and Vocational Education and Training

90. This capacity development module will be critical for the economic transformation and non-coal diversification. It will identify new skills required by managers and workers in new industry sectors and it will benefit the economy from value add-on through a generally more knowledge-based economy in the future. It will include labor force assessment and human resource development, and technical and vocational education and training (TVET) needs assessment, curriculum development, and trainer training support. This module is included although the cities have institutions in place and some programs included, but it is necessary to complement the FIC and BDS component and strengthen workforce development for supported sectors and firms and to provide capacity building for institutions in (i) curriculum development matching needs of the industry, (ii) provide teacher training, and (iii) establishing institutions-businesses partnerships. The consultant activities will be in coordination with and complementary to the activities of the BDS under package CS2. Experts involved from the consultant team will include TVET and human resources development specialist, and other specialists as needed. Coordination and cooperation between this CDM and consulting services under CS2 will be necessary. This module will include the following scope and tasks but not limited to:

(i) engaging with the local education, labor and SME bureaus and coordinating with the local universities, colleges, polytechnics, TVET schools, and industry partners;

(ii) assessing labor force and skills, and human resource development needs to serve the non-coal pillar industries identified in the Thirteenth five-year plans of the cities, and developing the non-coal diversification roadmap during the project preparation, and supporting SME development activities under the FIC and BDS components;

(iii) preparing national and international best practices cases and recommending

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lessons learned applicable in the four project cities; (iv) developing workforce development roadmap in consultation with the concerned

municipal agencies and stakeholders like educational institutions, industrial park managers, SME association, and businesses;

(v) liaising with the TVET schools and other education facilities and developing roadmaps for curricula and training formats to improve the skills and meet the demand of emerging new sectors i.e., the pillar industries from the economic development plans in the project cities;

(vi) contributing to the SME platform developed under the CS2 contract package and to the city cluster cooperation platform under CDM 1; and

(vii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC, and other ADB developing member countries.

(d) CDM 4: Capacity Development for Industrial Park Management and

Small- and Medium-Sized Enterprise Cluster Development Promotion

91. This capacity development module will include industrial park management and SME cluster development promotion. Experts involved from the consultant team and as needed additional resource persons, will include industrial park management and SME cluster specialists, and other specialists as needed. Coordination and cooperation between this CDM and consulting services under CS2 will be necessary. This module will include the following scope and tasks but not limited to:

(i) providing guidance and support to industrial parks management of the project cities especially the ones supported by the loan;

(ii) organizing and preparing training events, and facilitating city- and region-wide economic and industrial cluster planning, strategic industrial park planning and investment programming;

(iii) developing capacity on industrial park land development, land management, incremental growth strategies promoting SMEs and business start-ups;

(iv) providing advice on industry and company composition for effective supply chain linkages promoting circular economy, providing business services and facilitating commercial business services to become available to the companies, business association organization facilitating business-to-business cooperation and relations, etc.;

(v) supporting the industrial park managers with effective services and infrastructure needs assessment, and investment planning;

(vi) reviewing and promoting the development and adoption of an environmental management system for the concerned non-coal industrial parks;

(vii) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and

(viii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

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(e) CDM 5: Capacity Development for Mining Remediation Master Planning, Pilot Design, and Implementation

92. This capacity development module will include mining impact assessment, mining remediation master planning, investment planning, mining remediation pilot design and implementation, and establishing mechanisms for lessons learned and replication in the project cities and with various stakeholders including state-owned mining and private enterprises. Experts involved from the consultant team and as needed additional resource persons, will include mining remediation specialists, environment specialist, social and resettlement specialist, public awareness raising campaign specialist, and other specialists as needed. This module will include the following scope and tasks but not limited to:

(i) preparing a strategic mining remediation plan and investment program using lessons learned from the pilots in the project cities and from international good practice cases;

(ii) liaising with the local mining bureaus, land and resources bureaus, planning bureaus, and mining companies on mining impact assessment, mapping and monitoring plans;

(iii) involving the large coal-mining state-owned enterprise in the project cities to obtain data, actively engaging them in the process and also engage the local private mining operators and owners to ensure they will be part of the assessment, visioning and transformation planning process.

(iv) conducting analysis based on engagement with state-owned coal mining enterprise and local operators to inform the preparation of the mining impact risk management and mitigation plan. Analysis will include assessing the suitability of existing and future land use taking into consideration mining impact risks and recommending as needed, land use plan adjustments to avoid or reduce risks from mining impacts such as subsidence, seismic risks, environmental pollution, public health risks, water management and flooding risks, water course flow change risks, etc.;

(v) working closely with local governments, relevant agencies and other stakeholders to support the preparation of a mining remediation strategy and masterplan in the four project cities;

(vi) supporting the preparation of a mining remediation implementation action plan including phased implementation, prioritized investment plan, and private sector involvement plan will be facilitated;

(vii) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and

(viii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC, and other ADB developing member countries.

(f) CDM 6: Capacity Development for Urban-Rural Flood Risk and

Ecological River Management—Climate Resilience and Sponge City Capacity Development

93. This capacity development module will include urban-rural flood risk and ecological river management, climate resilience, and sponge city ecosystems-based adaptation capacity development. Experts involved from the consultant team and as needed additional resource persons, will include a team leader, a deputy team leader, river rehabilitation and green infrastructure specialist, project management and site supervision engineers, social development

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and gender specialist, resettlement specialist, environment specialist, public awareness raising campaign specialist, and other specialists as needed. This module will include the following scope and tasks but not limited to:

(i) supporting a strategic sponge city and green infrastructure urban-rural masterplan and watershed-wide plan and investment program for structural and non-structural measures;

(ii) planning integrated flood risk management and ecological river management, and urban-rural flood risk partnerships using lessons learned from national and international good practice cases, including the PRC’s sponge city pilot program with ADB-supported projects like the Jiangxi Pingxiang Integrated Rural-Urban Infrastructure Development Project29 and the technical assistance project in the Greater Mekong Subregion through Nature Based Solutions;30

(iii) supporting flood risk reduction planning of structural and non-structural measures including integrated land use planning and watershed-wide considerations including upstream floodplain protection, flood early warning systems, disaster preparedness, flood resilient farming, sponge city, and climate change resilience planning and implementation;

(iv) providing training on urban-rural river environment and water pollution reduction partnership planning, including environmental awareness raising, managing and reducing pollution (i.e., from mining and industries, illegal solid waste dumping, and agriculture), river ecology, wetland design and maintenance, and biodiversity enhancement;

(v) ensuring that the cities implement a rigorous solid waste management regime in the river greenways including waste bins, collection, and final disposal at a sanitary landfill or waste-to-energy plant;

(vi) preparing national and international best practices cases and recommend lessons learned applicable in the four project cities; and

(vii) preparing training materials and reports on lessons learned from the project to be shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

(g) CDM 7: Capacity Development for Water Supply, Domestic and

Industrial Wastewater, Drainage, and District Heating

94. This capacity development module will include aspects of water supply, domestic and industrial wastewater management, and drainage management, district heating system design, construction, management, operation, services and tariff reform. Experts involved from the consultant team and as needed additional resource persons, will include a team leader, a deputy team leader, water and wastewater specialists, industrial wastewater specialist, river rehabilitation and green infrastructure specialists, social and resettlement specialist, environment specialist, public awareness raising campaign specialist, and other specialists as needed. This module will include the following scope and tasks but not limited to:

(i) supporting the development of a strategic urban infrastructure and utility services master plan and investment programming, water resource management and water

29 ADB. 2015. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the People’s

Republic of China for the Jiangxi Pingxiang Integrated Rural-Urban Infrastructure Development Project. Manila (Loan 3281-PRC, ongoing);

30 ADB. 2016. Nature Based Solutions for Building Resilience in Towns and Cities: Case Studies from the Greater Mekong Subregion. Manila. https://www.adb.org/publications/nature-based-solutions-building-resilience-towns-cities-gms

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utility master plan support; (ii) providing training and guidance to ensure the sustainability of project investments

on water supply systems and treatment, related technology options, operations and maintenance, water supply safety, non-revenue water assessment and reduction planning and implementation, domestic wastewater collection and treatment, industrial wastewater pre-treatment, supervisory control and data acquisition (SCADA) systems planning, operations and maintenance, and drainage systems planning and management, urban waterlogging, and first flush treatment ponds;

(iii) providing training on district heating systems design, O&M, energy efficiency gains, and clean-fuel alternatives; engaging in policy dialogue with relevant government agencies; and promoting public consultation on tariff reforms and possibly necessary increases to achieve full O&M cost recovery plus partial investment cost recovery;

(iv) engaging in policy dialogue on tariff reform and providing support and capacity development on financial planning and financial management of utilities;

(v) preparing cases of purchase agreements and take-or-pay arrangements for the sale of treated wastewater and carrying out policy dialogue on effective and sustainable financing and operations and maintenance arrangements of water, wastewater, and district heating utilities with special consideration given on the agreements of Luobei County treated wastewater reuse by the industries;

(vi) preparing national and international best practices cases and recommending lessons learned applicable in the four project cities; and

(vii) preparing training materials and reports on lessons learned from the project to be shared with other ADB project management offices in the PRC, other concerned experts in the PRC, and other ADB developing member countries.

(h) CDM 8: Capacity Development for Sustainable Urban and Public

Transport Intelligent Transport Systems, Traffic Safety, and Non-Motorized Transport

95. This capacity development module will include aspects of sustainable urban transport, intelligent transport systems, road and traffic safety, public transport planning and management, NMT planning and urban design, and smart city urban mobility applications. Experts involved from the consultant team and as needed additional resource persons, will include road and traffic safety specialists and traffic management specialist, traffic management specialist, ICT and smart city applications specialist, and other specialists as needed. This module will include the following scope and tasks but not limited to:

(i) supporting the development of a strategic urban and public transport master plan and investment program;

(ii) supporting urban transport, public transport and urban road components through capacity development in planning and operations of sustainable urban transport systems, multi-modal integration, traffic and pedestrian safety, and integration of public transport and pedestrian friendly environments;

(iii) providing training and support on clean-fuel options for public transport rolling stock and environmentally sound maintenance and recycling of rolling stock and batteries of electric buses;

(iv) providing training on intelligent transport systems and smart city applications to enhance opportunities for improved transport efficiency and more customer-oriented service provision;

(v) providing training on fare integration, fare increases, and cost recovery strategies

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for public transport; (vi) preparing national and international best practices cases and recommending

lessons learned applicable in the four project cities; and (vii) preparing training materials and reports on lessons learned from the project to be

shared with a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

4. Cost Estimate of the Consulting Services Package CS1

96. The costs for the consulting services are estimated as follows:

Table 22: Cost Estimates for Contract Package CS1 ($'000)

Item Amount

Financed by the ADB loan 1. Consultants a. Remuneration and per diem i. International consultants 1,528 ii. National consultants 4,101 b. International and local travel 200 c. Reports and communicationsa 10

2. Equipmentb 30 3. Workshops, training, seminars, and conferencesc 844 4. Surveys 50

5. Miscellaneous administration and support costs 30 6. Contingencies 150 Total 6,943

Note: Not included in the calculation is the counterpart funding from local governments to be provided in-kind including office space with desks and chairs, local transport in project cities for project meetings and site visits; qualified fulltime counterpart personnel in the PMOs to work with the consultants; and access to all data, including documents, reports, accounts, drawings and maps, and permissions. a Includes communications facilities, printing and binding of reports, and translation of inception, interim, draft final,

and final project reports and other TA output documents into Chinese. b The equipment will be procured according to ADB’s Procurement Guidelines (2015, as amended from time to time).

All equipment will be turned over to the executing agency upon completion of the TA activities. Source: Asian Development Bank estimates.

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5. Reporting Requirements for the Consulting Services Package CS1

Table 33: Reporting Requirements for CS1

Category Schedule Target Audiences

Inception report Within 1 month after PMO issues the notice to proceed of Consulting service

PMOs, ADB

Semiannual progress reports During implementation period, semiannual (end of Jan and Jul)

PMOs, ADB

Midterm report Middle point of implementation PMOs and/or ADB Project completion report 1 month before ADB PCR mission PMOs and/or ADB Semiannual environment monitoring reports

Annual (end of Jan) PMOs and/or ADB

Semiannual external resettlement reports

Semiannual PMOs and/or ADB

Revisions to environmental monitoring plan

After preparation of the detailed engineering design

PMOs and/or ADB

Draft training and study tour plana End of the first year PMOs and/or ADB Reports for each capacity development activity

2 months after completion of activity PMOs and/or ADB

All training materials After each lecture/workshop PMOs All public education materials After preparation PMOs

ADB = Asian Development Bank, PMO = project management office, PCR = project completion report. a International study tours must comply with PRC regulations and guidelines. Source: Asian Development Bank

97. Reports or other consulting service packages under the project must be prepared in both English and Chinese language. The PMOs will decide on the number of copies of reports to be provided by the consultants to the PMOs and will distribute reports to relevant PIUs and local government agencies and an electronic copy of all reports in English language will be submitted to ADB. D2. Consultant’s Terms of Reference for Consulting Services Package CS2:

Business Development Services Capacity Development to Small and Medium- Sized Enterprise Consulting Services

1. Consultant Inputs

98. Business development services (BDS) to SME capacity development consultants will be engaged through the QCBS selection method with a standard quality: cost ratio of 90:10 with the full technical proposal procedure. The estimated input includes 40 person-months of international consultant input and 112 person-months of national consultant input. Table 3 shows the summary of specialists’ inputs. In addition, specialists will be engaged as resource persons to carry out specific training programs and events and to provide technical support targeting the needs of individual SMEs that receive BDS support under the project. A provisional sum to cover such expenses is included in the cost estimate and needs to be included in the bid document for the recruitment of the consulting firm. All international specialists must have a relevant academic degree and at least 12 years (team leader: at least 15 years) of relevant project experience. Work experience in the PRC will be an advantage. All national specialists must have a relevant academic degree and at least 7 years (deputy team leader: at least 15 years) of relevant work and project experience. National specialists should be fluent in English and experience from working with international agencies will be an advantage.

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Table 23: Summary of Consultant Inputs

Area of Expertise International

(person-months) National

(person-months)

1 SME business strategy specialists (team leader/deputy team leader)

13 27

2 SME financial specialists 7 13

3 SME sector specialists:a

3a SME green food processing sector specialist 5 18

3b SME graphite processing and high-tech products sector specialist

5 18

3c SME machinery and mechanical technology sector specialist 5 18

3d SME tourism sector specialist 5 18

Total person-months 40 112

SMEs = small and medium-sized enterprises. a Indicative list includes technical sector specialists in fields of identified non-coal pillar industries as identified by the project cities and as needed by the SMEs participating in the program including green food processing, graphite, machinery, technology, wood processing, furniture industry, trade and logistics, tourism, and possibly others as needed by the SMEs supported by this BDS consulting services. Time inputs will be determined on an as needed basis and the number of person-months listed under item 3 is an estimate for the inputs of the indicative list of sector specialists. This does not include resource persons to be engaged under the consultant firm with specialized expertise to provide specific technical capacity development support to SMEs on an as needed basis.

Source: Asian Development Bank estimates.

2. Objectives

99. The Business Development Services Capacity Development Component is critical for the development of competitive SMEs, private sector development, job creation, and non-coal diversification. This component is strategically linked with the financial intermediation component as it improves SMEs capacities and brings the quality of SME projects and investments to bankability standards and hence the BDS will also contribute to FIC subproject pipeline development. More details on the BDS for SMEs and its link to the FIC can be found in the PAM (section B). 100. The proposed BDS capacity development component is designed to improve the capacity and competitiveness of SMEs in the project cities and will be implemented in coordination with the financial intermediation project component. The BDS component will align with national, provincial and project city SME promotion and support programs and it will also strengthen the SME bureaus’ capacity to carry out effective and targeted SME support to sustainably improve the enabling environment for private sector development and non-coal diversification in the project cities. 101. The BDS component will build on existing arrangements and programs provided by the four project cities, especially by the cities’ SME bureaus, and bridging gaps in the current practice of identifying specific capacity needs and providing targeted capacity development support. The consultants will implement the BDS component in coordination with and receiving directions from the project city PMOs. The consultants will work in close cooperation with the local and provincial development and reform commissions and SME bureaus, both of which are part of the PMOs, and align activities and strengthen their capacity to enable these agencies to enhance their capacity development support services beyond the implementation of the project. Alignment with other local bureaus include labor and education bureaus to facilitate labor force building to meet human resource needs by the SMEs in the project cities in a more diversified economy in the future.

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102. This consulting service package is designed to provide a wider range of BDS to a significant number of SMEs over the project implementation period of 5 years. The consultants will also coordinate and share information on SMEs with consultants engaged under the technical assistance (TA) attached to this project, which is described in the Linked Document: Attached Technical Assistance. Beneficiaries should include inclusive businesses, specifically women, the poor and the elderly who should benefit from jobs created through the expected strengthening of the SMEs and their competitiveness.

3. Institutional Arrangement and Business Development Services Office under the Local Project Management Office and Small- and Medium-Enterprise Bureaus

103. The consultants for the BDS component will be guided by the project cities’ PMOs and a dedicated BDS office. Each project city will form a dedicated and professional BDS office under the local development and reform commission and SME bureaus that performs the following responsibilities:

(i) appraise and screen potential SME subproject companies to receive BDS capacity development, and seek SMEs with potential for FIC support building a FIC subproject pipeline;

(ii) seek out and screen for service providers to support SME subproject companies; (iii) facilitate business-to-business and business-to-institution partnerships including

product and production research and development; (iv) build and enhance the SME web-based platform that provides services and

training to SMEs; (v) facilitate SME associations and promote their sustainable self-organization; (vi) organize periodic pitching workshops to connect SME subprojects with investors

and/or commercial banks; (vii) guide and manage the consultants and identify experts to provide specific technical

support to SMEs to be engaged under the contract by the international consulting firm;

(viii) track and report the SME support and business incubation progress of the subproject companies; and

(ix) work closely with education and training institutions like local universities, colleges, polytechnics, technical and vocational education and training schools in partnering on skills training and human resource development for the needed workforce in the new non-coal industries supported by the project, including women, poor, unemployed and older unemployed people.

4. Scope and Main Activities 104. The consulting services package CS2 will include three main activities:

(i) SME customized capacity building and business incubation in all four cities servicing high-potential SMEs with tailored, one-on-one advisory services. Approximately 25 SMEs will receive BDS services per city throughout the project implementation period of 5 years. SMEs are expected to be “investment-ready” after 2 years of receiving customized capacity development;

(ii) Building and maintaining a regional web-based SME service platform to cover all four project cities with company profiles, general expert information, in-depth policy interpretations, and business training content; and

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(iii) Facilitating and strengthening SME associations to organize and self-organize regular business-to-business communications and partnerships, off-line events including training seminars and regional case competition, as well as overseeing the operation of the web-based service platform.

5. Small- and Medium-Sized Enterprise Capacity Building and Business Incubation

(a) BDS CDM 1: General Business Strategy Improvement for Small- and Medium-Sized Enterprises

105. The purpose of this capacity development module is to improve SMEs’ capacity to identify their general business strategy, sales channels, market segmentation, and overall product design. The scope of work will include (i) advisory services on the overall business action plans and future strategies; (ii) improve current sales and product strategies; and (iii) mentor senior management on business planning. Experts involved from the consultant team and as needed additional resource persons, will include a team leader, a deputy team leader, and other specialists as needed. Scope and detailed tasks include but are not limited to the following:

(i) conduct overall business clinic services and develop major business action plans for the next 3 years for the SMEs;

(ii) validate business plans for FIC subproject companies and how FIC loan or other financing would be deployed for the SMEs;

(iii) monitor overall SME business health and advise on how to optimize business operations, including but not limited to market segmentation, sales force management, product and technology advancement, channel management, branding and promotion;

(iv) mentor senior management (including business owners) on leadership development and business planning;

(v) coordinate with BDS office for support from SME sector specialists and financial specialist; and

(vi) prepare training materials and reports on lessons learned from the SME capacity development engagement and the SME improvement to be shared with the HPG, PMOs and ADB, and a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries. (b) BDS CDM 2: Enhancement of General Financial Management

Capacity for Small- and Medium-Sized Enterprises

106. The purpose of this capacity development module is to improve the general internal financial management capacity and investor outreach capability for SMEs. Experts involved from the consultant team and as needed additional resource persons, will include a team leader, a deputy team leader, financial specialists, and other specialists as needed. The scope of work will include (i) work with subproject companies to identify internal financial management gaps; (ii) establish improved internal financial management methodologies for BDS companies; (iii) assist companies to pitch to potential equity investors and commercial banks; (iv) train the companies’ existing financial management staff on the latest corporate finance best practices; and (v) assess companies’ needs to recruit additional financial management staff. 107. Detailed tasks include but are not limited to the following:

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(i) validate BDS and FIC companies’ internal financial management procedures and results;

(ii) analyze the current financial management issues and the resources needed to resolve issues;

(iii) propose alternative financial management models and methodologies to be implemented together with the BDS and FIC company financial management staff;

(iv) assess the current capacity of the BDS and FIC company financial management team;

(v) mentor financial management on effective internal financial management and investor relationship maintenance;

(vi) design actions to strengthen the talent quality of the BDS and FIC company financial management team;

(vii) share best practices and competitor moves on a regular basis; (viii) Connect with investor resources including but not limited to commercial banks,

private equity funds, venture capital funds etc.; (ix) coordinate with BDS office for support from SME sector specialists and business

strategy specialist; and (x) prepare training materials and reports on lessons learned from the SME capacity

development engagement and SME improvement to be shared with the HPG, PMOs and ADB, and a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries. (c) BDS CDM 3: Sector Capacity Strengthening for Small- and Medium-

Sized Enterprises in Non-Coal Pillar Industries

108. The purpose of this capacity development module is to provide SMEs in non-coal pillar industries with the needed sector-specific support and technical capacity development. The sector experts involved will come from green food processing, graphite, machinery, technology, wood processing, furniture industry, trade and logistics, tourism, and others as needed by the SMEs supported by this BDS consulting services. 109. The scope of work for the respective specialists will include (i) supporting SME companies validate their business plans, and helping them prepare bankable project investment proposals and, if ready, propose them as possible FIC pipeline subprojects; (ii) determining how the services and a possible FIC or other financing support i.e., through a loan would be deployed; (iii) providing SMEs with ongoing clinical and incubational advisory services and practical advice on performance improvements; (iv) sharing industry best practices and development trends with SMEs; and (v) mentoring and supporting SME senior management, product design engineers, and production engineers on improvements of product design and marketing. 110. Detailed tasks to be carried out by the team of industry specialists will include but not limited to the following:

(i) validating business plans for BDS and FIC support candidate companies, and how BDS and FIC support would be developed and deployed;

(ii) reviewing and evaluating current products, production techniques and methods, and technology used by candidate SMEs;

(iii) identifying strengths and weaknesses and areas for improvement, and coordinating with BDS office for support from SME technical, financial, and business strategy specialists as needed;

(iv) sharing sector best practices and competitor moves on a regular basis;

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(v) mentoring senior management (including business owners) to implement industry best practices and business planning;

(vi) designing actions to strengthen the talent quality of the BDS and FIC company product development team; and

(vii) working with sector resources including customers, suppliers, research and development partners and business development service partners on as needed basis; and preparing training materials and reports on lessons learned from the SME capacity development engagement and SME improvement to be shared with the HPG, PMOs and ADB, and a wider audience including ADB project management offices in the PRC, other concerned experts in the PRC and other ADB developing member countries.

111. The cost estimates for consulting services are in Table 24.


Item Amount

Financed by the ADB loan 1. Consultants a. Remuneration and per diem i. International consultants 799 ii. National consultants 1,460 b. International and local travel 120 c. Reports and communicationsa 10

2. Equipmentb 552 3. Workshops, training, seminars, and conferences 340 4. Surveys 100

5.Office support, etc. 264 6. Provisional Sum i. Research and development technical supportc 1,960 ii. Web-based small and medium-sized enterprise service platform 200 7. Contingencies 167 Total 5,972

ADB = Asian Development Bank. Note: Not included in the calculation is the counterpart funding from local governments to be provided in-kind including office space with desks and chairs, local transport in project cities for project meetings and site visits; qualified fulltime counterpart personnel in the PMOs to work with the consultants; and access to all data, including documents, reports, accounts, drawings and maps, and permissions. a Includes communications facilities, printing and binding of reports, and translation of inception, interim, draft final,

and final project reports and other TA output documents into Chinese. Source: ADB estimates.

D3. Consultant’s Terms of Reference for Consulting Services Package CS3: External Resettlement and Social Monitoring and External Environment Monitoring Consulting Services

112. The executing agency on behalf of the four cities will recruit a national consulting firm, or institute with a team of qualified and experienced external monitoring experts through QCBS (80:20). The external monitoring experts should have the following qualifications and experience: University degree in a relevant field (social science, engineering, and land management); experience in working in urban development projects and with vulnerable households and on civil and environmental engineering and monitoring projects; demonstrated knowledge and experience in applying best practices in involuntary resettlement, social and gender development plans, and environmental management plan implementation; at least 5 years

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of experience in the formulation and implementation of resettlement plans and SGAPs, and EIAs and EMPs; and proficiency in English report writing. A. External Resettlement and Social Monitoring

1. External Monitoring of Resettlement Plan Implementation and Safeguards

Monitoring

113. One of the provisions in the resettlement plan is the engagement of an external resettlement monitor to carry out monitoring and evaluation of social safeguard compliance of the project during and after resettlement implementation as well as the Social and Gender Action Plan (SGAP). A national resettlement and social consulting firm or institute will be engaged for the whole duration of project implementation to act as external monitor. The institute with estimated total input of 62 person-months of national consultants will be engaged by QCBS (80:20) method. 114. Team of specialists required. To carry out the scope of work and tasks outlined above, the consulting firm will provide a total of two national specialists for a total of 62 person-months. The consultants will be duly qualified with respective relevant academic degrees equivalent to Masters Degrees or higher and have at least 8 years (team leader and social development and gender specialist) and 4 years (deputy team leader) of experience in their respective fields relevant to the project’s requirements.

Table 25: Summary External Resettlement and Social Monitoring Consultant Inputs

Area of Expertise National

(person-months)

1 Senior resettlement specialist (team leader) 12 2 Resettlement specialist (deputy team leader) 38 3 Social development and gender specialist 12 Total 62


115. Objectives and requirements of monitoring and evaluation. The external monitor will (i) assess the effectiveness, impacts and sustainability of land acquisition, compensation, and resettlement measures; (ii) determine whether such activities have met the safeguard policy requirements of the project; and (iii) extract and highlight lessons for future social safeguard policy formulation and project planning. All data and analysis will be disaggregated by gender, if applicable. 116. The external monitoring process will include the following activities:

(i) review and verification of the internal monitoring reports and resettlement completion reports of the PMO;

(ii) identification and selection of project impact indicators; (iii) impact assessment (e.g., restoration of incomes and living conditions) through

quantitative and qualitative studies; (iv) gender-sensitive consultations with affected persons;

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(v) assessment of compliance with government’s laws and regulations and the ADB Safeguard Policy Statement’s (SPS, 2009) involuntary resettlement policy requirements outlined in the resettlement plan;

(vi) recommendations on the land acquisition process modification and adaptation measures;

(vii) effectiveness of the grievance redress mechanism (GRM); and (viii) lessons learned.

117. External monitoring key indicators: (i) impacts of land acquisition on the affected households, especially the poor and

other vulnerable households, (ii) economic status of the affected households, their employment status, income

levels, and household assets with the assessment done against the pre-project baseline information;

(iii) changes in the status of affected vulnerable persons, in terms of food security, household demographics, and livelihoods in relation to project impacts;

(iv) degree of support the affected persons received through consultations, assistance in restarting income activities, and livelihood restoration

(v) outstanding land acquisition and resettlement (LAR) or compensation issues (status and the time frame to complete and/or resolve them);

(vi) perceptions of the affected persons regarding the implementation of the land acquisition and compensation payment processes;

(vii) impacts on affected businesses (permanent and temporary); (viii) participation of affected persons in the implementation of the resettlement plan; (ix) level of consultations with affected persons by the PMO and relevant agencies; (x) effectiveness and fairness of valuation, compensation, and compensation

disbursement measures; (xi) implementation and effectiveness of income restoration measures; (xii) effectiveness and fairness of the GRM process; (xiii) level of satisfaction among the affected persons in the post-resettlement plan

phase; (xiv) adequacy of resettlement funds, their timely availability, and results of financial

audits; and

(xv) performance monitoring of LAR implementing agencies.

118. Monitoring methodologies will be but not limited to the following: (i) desk review and field visits; (ii) use of structured questionnaires; (iii) meetings with various departments and organizations, local officials, and affected households; (iv) focus group discussions (FGDs); and (v) key informant interviews. Separate meetings will be held with women and vulnerable households. Monitoring indicators and findings will be disaggregated by gender, if applicable.

2. External Monitoring of Social and Gender Action Plan

119. The external social monitor will review the progress of SGAP implementation as part of the semiannual monitoring process. The consultant will

(i) carry out external monitoring in accordance with the SGAP; (ii) review the SGAP internal monitoring reports and guide and assist the PMOs and

PIUs in carrying out the internal monitoring; (iii) monitor and evaluate performance of organizations responsible for

SGAP implementation;

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(iv) collect sex-disaggregated baseline data to monitor the progress of SGAP implementation;

(v) update the SGAP implementation progress matrix as part of the external monitoring, and submit it with external monitoring reports semiannually to ADB and executing agency;

(vi) interviews, FGDs, and consultations will be carried out with the direct project beneficiaries, in addition to affected people to assess the progress of SGAP implementation;

(vii) when the project is completed, carry out post-review on SGAP activities to collect sex-disaggregated quantitative data and conduct qualitative interviews (FGDs) with women on how the project has changed their quality of life; and

(viii) complete any other tasks relating to SGAP external monitoring as required by PMOs.

B. External Environment Monitoring 120. This portion of the assignment is for the duration of project implementation to act as external environment monitor. The external environment monitor experts will provide technical and management support to ensure compliance during project implementation with the environmental impact assessment and environmental management plan (EMP). The external environment monitor experts will be responsible for environmental management training, independent environmental verification, and appointment and management of licensed environmental quality monitoring institute(s) to conduct periodic environment quality monitoring. Specific tasks include:

(i) assisting the PMOs and PIUs to establish a project-level environmental management system, consisting of relevant staffing, inspection, monitoring, grievance redress mechanism (GRM), and reporting;

(ii) assessing project components’ environmental readiness prior to implementation based on the readiness indicators defined in Table EMP-6 in the EMP;

(iii) assisting PMOs to update the EMP including the mitigation measures and environmental monitoring program therein, based on the detailed engineering design and submit for executing agency and ADB’s clearance and disclosure;

(iv) assisting PIUs in contracting of environment supervision consultants for each civil works contract;

(v) reviewing and clearing site EMPs; (vi) assisting the PMOs and PIUs to establish a GRM, and provide training for the

GRM access points; (vii) conducting independent verification of the project’s environmental management

performance, undertake site visits as required, identify any environment-related implementation issues, propose necessary corrective actions and reflect these in a corrective action plan;

(viii) contracting local environmental monitoring stations or other licensed institutes to conduct environmental impact monitoring per requirements specified in the EMP during construction (Table EMP-6); coordinating the external environmental impact monitoring; comparing the predicted with the actual environmental impacts, assessing the effectiveness of the mitigation measures, and suggesting enhancement measures, as required;

(ix) preparing semiannual environmental monitoring and progress reports to ADB; (x) prior to midterm review mission, providing support to PMOs and PIUs in organizing

public meetings in the project city/towns to present and discuss

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EMP implementation progress, solicit community opinions and concerns, and agree on required corrective actions;

(xi) prior to project completion, organizing surveys in the project city/town to assess community satisfaction with project implementation, project outputs, and EMP implementation performance, and document the results in the PCR;

(xii) providing input of environmental protection to progress report, midterm report, project completion report, and other project required documents; and

(xiii) service completion report. 121. Team of specialists required. To carry out the scope of work and tasks outlined above, the consulting firm will provide a total of two national specialists for a total of 55 person-months. The consultants will be duly qualified with respective relevant academic degrees equivalent to Masters Degrees or higher and have at least 8 and 4 years of experience in their respective fields relevant to the project’s requirements.

Table 27: Summary External Environment Monitoring Inputs


(person-months)

1 Team leader: Senior environment specialist 12 2 Deputy team leader: environment specialist 43 Total 55


C. Frequency of Monitoring and Reporting Requirements

1. Monitoring Schedule

122. The external monitor will carry out semiannual monitoring for the entire implementation of resettlement plans and SGAP estimated to be 3 years between 2018 and 2020. Post-evaluation will be carried out during the fourth and fifth years estimated in 2021 and 2022, or within 24 months after completion of resettlement activities. The external monitor for environment will carry out semiannual monitoring for compliance with EIA and EMP implementation during the entire implementation period of the project. 123. A monitoring report will include

(i) a summary of field and document review findings; (ii) field observations and a summary of affected persons and social and

environmental impacts and stakeholders’ views and suggestions and recommendations;

(iii) major issues, grievances, and problems identified during field visits (existing and potential);

(iv) recommendations on mitigation or prevention measures; (v) comments on internal monitoring (relevance, adequacy, and timeliness); (vi) an assessment of previous external monitoring follow-up actions; and (vii) conclusion, which summarizes the above.

124. All monitoring reports will be written in English and Chinese languages. The city PMOs will ensure that information on the progress and status on all aspects of land acquisition and resettlement activities will be provided to the external monitor for verification. 125. The external monitor will submit all the monitoring reports simultaneously to the executing agency, implementing agencies, and ADB.

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126. The external monitor will present its key findings and recommendations to the PMOs at least 2 days prior to the end of each monitoring period. The external monitor will submit monitoring reports (in English and Chinese languages) simultaneously to the executing agency and implementing agencies and ADB within 15 working days after completion of each monitoring activity. The external monitor is also required to revise the external resettlement and social monitoring reports and the external environment monitoring reports based on comments received from the PMO and ADB and submit the revised reports simultaneously to the PMO and ADB within 7 working days.

127. Photos, site photos, minutes of meetings, and attendance sheets, held with various stakeholders will be attached in the reports. Documents obtained during monitoring will also be attached as necessary. 128. Table 26 shows the monitoring schedule starting from 2018 and until 2 years after resettlement plan implementation actions completion.

Table 26: Schedule for External Resettlement and Social Monitoring and External Environment Monitoring and Reporting

Activities / Tasks Timing Submission of Report

Semiannual monitoring 1 January–30 June 15 August

Semiannual monitoring 1 July–31 December 15 February

Post-evaluation monitoring 1 January–31 December 15 February

129. The estimated cost for the external resettlement and social monitoring and external environment monitoring services is shown in Table 27. D. Cost Estimates


Item Amount

1. Consultants a. Remuneration and per diem National consultants 740 b. Local travel 50 c. Reports and communicationsa 10 2. Surveys and resettlement and social data collection, and environmental data collection including sampling

200

3. Contingencies 75 Total 1,075

a Includes communications facilities, printing and binding of reports, and translation of inception, interim, draft final, and final project reports and other TA output documents into Chinese.


D6. Consultant’s Outline Terms of Reference for Consulting Services Package CS4: Non-Revenue Water Reduction Pilot Consulting Services in Qitaihe 1. Consultant Inputs and Cost Estimates

130. This contract is proposed to be a single service delivery package using the ADB’s CQS procedure with an indicative budget of $180,000. This contract will aid on piloting nonrevenue water (NRW) reduction, district management areas (DMA), and pressure management schemes in Qitaihe.

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131. The estimated specialists’ inputs and cost estimates are shown in Table 28.

Table 28: Summary of Consultant Input for Nonrevenue Water Reduction Pilot Consulting Services in Qitaihe


(person-months)

1 Project manager 3 2 NRW control specialist 3

3 GIS application specialist 3 4 Modelling specialist 3 5 Water supply system optimization specialist 3 6 DMA specialist 3 7 Pressure management specialist 3 8 Water supply system dispatching and operation specialist 3

Total person-months 24

DMA = district metering areas, GIS = geographic information system, NRW = nonrevenue water. Source: Asian Development Bank estimates.


Item Amount

1. Consultants a. Remuneration and per diem national consultants 140.0 b. Local travel 20.0 2. Contingencies 20.0

Total 180.0


2. Scope of Work

132. The scope of work for the consultant team of specialists will include but not be limited by the following tasks:

(i) designing NRW reduction pilot scheme for two residential compounds in Qitaihe; (ii) developing a NRW control plan for the pilots; (iii) providing recommendations for an organizational structure to institutionalize

NRW management in Qitaihe; (iv) reviewing existing data and format of water supply system of Qitaihe; (v) establishing hydraulic model for the water supply system and enter data in GIS to

be given to the government after completion of the contract; (vi) piloting DMA management and pressure management schemes; (vii) providing reports on DMA management and pressure management in Qitaihe and

recommendations for improvements; (viii) reviewing water supply network status and providing suggestions on system

optimization to ensure stable operation; (ix) providing guidance on development and management of water system emergency

response plan; (x) optimizing the pilot operation during implementation; (xi) drawing lessons learned and developing a comprehensive report including an

executive summary including a recommended NRW control plan; (xii) developing a NRW control plan for the water supply system of Qitaihe; and (xiii) carrying out training on modelling, software application, dispatching and operation,

DMA management, pressure management, etc.

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3. Reporting Requirements

133. All reports required for the consulting service package CS4 under the project must be prepared in both English and Chinese language. The PMOs will decide on the number of copies of reports to be provided by the consultants to the PMOs and will distribute reports to relevant PIUs and local government agencies and an electronic copy of all reports in English language will be submitted to ADB.

D5. Consultant’s Terms of Reference for Consulting Services Package Bundle CS5: Project Implementation Startup Support Consulting Services (Individual Consultants)

1. Objectives and Scope of Work

134. Individual consultants will be engaged under this package bundle work directly with the PMOs. The purpose of the project implementation start-up support consulting services is to assist the PMOs in project implementation startup activities to accelerate and facilitate timely implementation before the loan implementation consultant engaged under package CS 1 is engaged. The individual consultants are expected to (i) procure national companies for construction supervision; (ii) procure an international company for project support and capacity development; (iii) assist the PMOs and PIUs in preparing civil works and procurement contracts; (iv) update resettlement plans and provide support to resettlement activities; (v) update and provide further detailed environmental management plans for advance procurement packages; (vi) establish a filing system for document reporting, tracking, and retaining, (vii) develop project financial management manual; (viii) support project financial management, withdrawal application preparation and disbursement; and (ix) provide training as necessary.

2. Consultant Inputs

135. The start-up support consulting services will include a total input of 16 person-months by 6 individual national consultants to work directly with the PMOs and PIUs. The individual experts will be engaged in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). The consultants will be selected and engaged following the individual consultant selection (ICS) method and will work on an intermittent basis with a schedule agreed with the PMOs. The six experts to be recruited are in Table 30. Table 30: Summary of Project Implementation Startup Support Consulting Services CS5


(person-months)

National Project procurement and management specialist 3 Resettlement specialist 3 Environment specialist 3 Project and SME financial management specialist 3 SME business strategy specialist 2 SME sector specialists (sector qualification based on demand) 2

Total 16

SMEs = small- and medium-sized enterprises. Source: Asian Development Bank estimates.

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3. CS 5.1: Project Procurement and Management Specialist

136. The procurement specialist will have a university degree or above in management, accounting, or related field with demonstrated knowledge in procurement procedures and processes. S/he will have at least 10 years of experience in procurement of civil works, goods, and services in the PRC, including international competitive bidding, preferably on projects funded by the ADB or other international funding agencies. Knowledge of ADB or other international funding agency procurement guidelines and procedures will be required. This position requires an English language proficiency. Tasks and responsibilities of the specialist include but are not limited to the following:

(i) organizing and maintaining a project filing system according to specifications by the PMO and ADB in both hard copy and electronic files and will be used by all startup consultants and the PMO offices;

(ii) providing administrative and operational assistance to the PMOs; (iii) assisting in the preparation of procurement packages for advance contracting; (iv) organizing procurement processes and preparing documents, including bidding

documents, specifications, bid evaluation reports, etc., for preparation of procurement packages intended for advance contracting;

(v) providing assistance to the PMOs and to the tender evaluation committee during the tendering process in preparing the following in accordance with ADB procurement guidelines: (a) detailed terms of reference for relevant packages in consultation with relevant technical experts, (b) invitations to bid, (c) answers to bidders’ queries, and (d) bid evaluation reports;

(vi) coordinating with ADB during tender evaluation; (vii) assisting the PMOs in preparing necessary documents for contract signing and

contractor/consultant mobilization; (viii) preparing a report on the status of project startup and procurement; and (ix) handover documents and files to the project implementation support consultant

firm and reporting on the status and outstanding issues.

4. CS 5.2: Resettlement Specialist

137. The Resettlement Specialist will have a university degree or above in resettlement, social, or related field with demonstrated experience. S/he is proficient in English and shall have at least 10 years of experience in resettlement in the PRC on projects funded by ADB or other international funding agencies. Knowledge in resettlement safeguard policies and procedures by ADB or other international funding agencies is required. Tasks and responsibilities of the resettlement specialist include, but are not limited to the following:

(i) assisting the implementing agencies to update the resettlement plans based on final design, meaningful consultation with affected people, detailed measurement surveys, and census of affected persons;

(ii) assisting implementing agencies and/or PIUs to ensure adequate resettlement readiness prior to implementation;

(iii) assisting the PMOs and/or PIUs to establish an effective grievance redress mechanism with reporting of complaints, follow-up actions, and results;

(iv) providing training to the PMOs and the PIUs so they understand ADB policies and compliance requirements for resettlement safeguard;

(v) assisting the PMOs and PIUs in establishing an internal resettlement monitoring and reporting system, which will be included in project progress reports; and

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(vi) assisting the PMOs and PIUs in handing over relevant documents and files on project implementation support to the consultant firm (package CS1) and brief them on the preparation and implementation status and outstanding issues.

5. CS 5.3: Environment Specialist

138. The Environment Specialist will have a university degree or above in environmental or civil engineering, or related field with demonstrated relevant experience. S/he is proficient in English and shall have at least 10 years of experience in environmental impact assessment in the PRC on projects funded by ADB or other international funding agencies. Knowledge in environment safeguard policies and procedures by ADB or other international funding agencies is required. Tasks and responsibilities of the environment specialist include, but are not limited to the following:

(vii) assisting the implementing agencies to update the environmental impact assessments and environmental management plans based on final design;

(viii) assisting implementing agencies and/or PIUs to design adequate mitigation measures to reduce the expected adverse environmental impacts;

(ix) ensure adequate environmental management readiness prior to implementation; (x) assisting the PMOs and/or PIUs to establish an effective grievance redress

mechanism with reporting of environmental impact related complaints, follow-up actions, and results;

(xi) providing training to the PMOs and the PIUs so they understand ADB policies and compliance requirements for environmental safeguard;

(xii) assisting the PMOs and PIUs in establishing an internal environmental monitoring and reporting system, which will be included in project progress reports; and

(xiii) assisting the PMOs and PIUs in handing over relevant documents and files on project implementation support to the consultant firm (package CS1) and brief them on the preparation and implementation status and outstanding issues.

6. CS 5.4: Project and Small- and Medium-sized Enterprises Financial Management Specialist

139. The Financial Management Specialist will have a university degree or above in financial management or related field with demonstrated experience. S/he is proficient in English and shall have at least 10 years of experience in financial management in the PRC on projects funded by ADB or other international funding agencies. Knowledge in financial management requirements and procedures by ADB or other international funding agencies is required. Tasks and responsibilities of the resettlement specialist include, but are not limited to the following:

(i) assisting the implementing agencies to prepare financial management manual, (ii) assisting implementing agencies and/or PIUs to establish a project accounting

system for the project, (iii) assisting the PMOs and PIUs to prepare withdraw applications, (iv) providing training to the PMO and PIUs so they understand ADB requirements and

procedures, (v) validating BDS and FIC companies’ internal financial management procedures and

results; (vi) analyzing the current financial management issues and the resources needed to

resolve the issues; (vii) if need be, proposing alternative financial management models and methodologies

to be implemented together with the BDS and FIC company financial management staff;

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(viii) assessing the current capacity of the BDS and FIC company financial management team;

(ix) mentoring financial management on effective internal financial management and investor relationship maintenance;

(x) designing actions to strengthen the talent quality of the BDS and FIC company financial management team;

(xi) sharing best practices and competitor moves on regular basis; (xii) connecting with investor resources including but not limited to commercial banks,

private equity funds, venture capital funds, etc.; and (xiii) coordinating with BDS office for support from SME sector specialists and business

strategy specialist.

7. CS 5.5: Small- and Medium-sized Enterprises Business Strategy Specialist

140. The SME business strategy specialists will have a university degree or above in business management and corporate strategy with demonstrated experience. S/he is proficient in English and shall have at least 10 years of experience in business management and corporate strategy. In addition, the specialist should have managerial experience of at least years and previous experiences as mentor or trainer. The specialist will be engaged on an intermittent basis and work in coordination with the SME financial specialist and SME sector specialist, and environment and resettlement and social development and gender specialists responsible for environmental and social management system (ESMS) support. Tasks and responsibilities include, but are not limited to, the following:

(i) conducting overall business clinic services and develop major business action plans for next 3 years;

(ii) validating business plans for FIC sub project companies and how FIC loan will be deployed;

(iii) monitoring overall business health and advising on how to optimize business operations including but not limited to market segmentation, sales force management, product and technology advancement, channel management, branding and promotion;

(iv) mentoring senior management (including business owners) on leadership development, and business planning; and

(v) coordinating with BDS office for support from SME sector specialists and financial specialist.

8. CS 5.6: Small- and Medium-sized Enterprises Sector Specialist

141. The SME sector specialist will have a university degree or above in any one of the following specific industries: tourism, green agriculture, graphite, technology, and furniture with demonstrated experience. S/he is proficient in English and shall have at least 10 years of experience in the respective non-coal pillar industry mentioned above in the PRC. In addition, the specialist should have managerial experience of at least 7 years and previous experiences as mentor or trainer. The specialist will be engaged on an intermittent basis and work in coordination with the SME financial specialist and SME business strategy specialist, and environment and resettlement and social development and gender specialists responsible for ESMS support. Tasks and responsibilities include, but are not limited to, the following:

(i) validating business plans for FIC sub project companies, how FIC loan will be deployed;

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(ii) identifying other functional areas for improvement, and coordinating with BDS office for support from SME financial specialist and business strategy specialist;

(iii) sharing sector best practices and competitor moves on regular basis; (iv) mentoring senior management (including business owners) to implement industry

best practices and business planning; (v) designing actions to strengthen the talent quality of the BDS and FIC company

product development team; and (vi) connecting with sector resources including customers, suppliers, research and

development partners and business development services partners on as needed basis.

9. Cost Estimate of Consulting Services Contract Package Bundle

142. The estimated total cost for the contract package bundle CS5 consisting of individual contracts is in Table 31:

Table 31: Cost Estimates for Contract Package Bundle CS5 ($'000)

Item Amount

1. Consultants a. Remuneration and per diem National consultants 140 b. Local travel 15 2. Contingencies 15

Total 170


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VII. SAFEGUARDS

143. Pursuant to ADB's Safeguard Policy Statement (SPS, 2009) ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth in Appendix 5 of the SPS. All financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list to the project components financed by ADB.

A. Environment 144. Environment due diligence. The project is classified as Category A for environment. A comprehensive environmental impact assessment (EIA) report, including an environmental management plan (EMP) will be prepared and disclosed on the ADB website. The EIA incorporates the results of the Domestic EIAs that will be submitted for approval by the project city environment protection bureau (EPBs). The EIA complies with ADB’s policies and requirements including ADB's Safeguard Policy Statement (SPS, 2009). The EIA concludes that the project’s anticipated environmental impacts can be mitigated through full and effective implementation of the EMP. 145. In addition, the project involves financial intermediary loan to support business development for small- and medium-sized enterprises (SMEs). This component is classified as category FI that must apply an environmental management system. 146. Environmental management plan. The project EIA and EMP, which are based on the domestic FSRs and DEIAs, forms the basis of the official loan agreement between ADB and HPG. The EMP is the key document to be used by the HPG and contractors to manage and report on the environmental impacts of project construction and operation. The EMP defines the mitigation measures, monitoring program, GRM, public consultation plan, and roles and responsibilities for the project agencies. The HPG, through the PMO of each project city, holds final responsibility for implementation and compliance with the EMP. The HPG and implementing agencies will be responsible for ensuring the project is designed, constructed, decommissioned, and operated in accordance with (i) the national and local government environmental, health and safety laws, regulations, procedures, and guidelines; (ii) ADB’s SPS; and (iii) the EMP. A full-time Environmental Officer has been assigned in each PMO to coordinate implementation of the EMP. The effectiveness of the mitigation measures will be evaluated through environmental inspections and monitoring. The loan implementation environment consultants will support the PMO and contractors to implement the EMP. 147. Environmental management plan update and bidding documents. In the design stage the PMO will forward the EMP to the design institutes for incorporating mitigation measures into the detailed technical designs. The EMP will be updated at the end of the detailed design, as needed, reviewed by ADB, and re-posted on the ADB website. To ensure that contractors comply with the EMP, the PMO will prepare and provide the following for incorporation into the bidding documents: (i) a list of environmental management requirements to be budgeted by bidders in their proposals, (ii) environmental clauses for contractual terms and conditions, and (iii) the updated EMP. The contractors and supervision companies will incorporate the EMP mitigation measures in their construction plans and will also be responsible for internal environmental monitoring during construction. Environmental impact monitoring will be conducted by the Environment Monitoring Stations, contracted by the PMO. Assurances for environmental safeguards have been prepared and are included in the loan and project agreements.

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148. Environmental benefits. The impact of the project will improve the environment by cleaning up the mine sites in the four cities, reducing the cities’ coal mining activities, dredging the rivers and enhancing water and ecological environment and the quality of life. Other project benefits include

(i) energy saving in retrofitting heating network, (ii) energy saving and reduction of gas emission by using electrical buses, and (iii) improvement of the existing sewerage network and wastewater treatment plants

capacity and quality standards help reduce polluted sewage discharging to the rivers.

149. Potential impacts. Potential environmental impacts of the project are mainly during the construction stage, including air, noise, water quality, solid waste, and disturbance to some habitats of the rivers. During EIA preparation, consultations were conducted with key stakeholders and the outcomes have been integrated into the project design. Impacts will be avoided and/or mitigated through implementation of the EMP. The EIA concludes that full and effective implementation of the EMP, together with the prescribed capacity training, will result in minor residual impacts that are within the limits of the PRC standards defined in the EMP. 150. Public consultation and grievance redress mechanism. Information disclosure and two rounds of public consultations were conducted during the EIA in accordance with the PRC Guideline on Public Consultation in EIA (2006) and ADB’s SPS. Public concerns about air and flood control were documented and have been addressed in the project design. A project-specific GRM has been established to receive and manage any community concerns which may arise due to the project. The PMO is the lead agency that will have final responsibility for management, implementation, and reporting of the GRM. The PMO Environmental and Social Officers will coordinate the GRM and the following tasks: (i) instruct the PPEs, local EPBs, and contractors on their responsibilities in the GRM; (ii) establish a simple registry system to document and track grievances received (including forms to record complaints and how they have been resolved); (iii) report on progress of the GRM in the quarterly project progress reports and the semiannual environmental and resettlement monitoring and progress reports to ADB; and (iv) arrange future public consultations for the project. The GRM procedures, reporting timelines, roles and responsibilities of all agencies, and GRM contact persons in each PPE, are described in Section G of the EMP. 151. Capacity building. Capacity building in environmental management will be provided to the PMO, implementing agencies, contractors, and construction and supervision companies in accordance with the training plan in the EMP, to ensure adequate institutional capacity in managing the environmental impacts. The training will include (i) implementation of the EMP for mitigation, monitoring, and reporting; (ii) improved WWTP operations to ensure that they are done properly per design intensions; (iii) inclusion of the EMP in project tenders and review of bids; and (iv) implementation of the GRM, including access points, roles, and responsibilities for project agencies. 152. The HPG shall make available, and cause the Implementing Agencies to make available, the necessary budgetary and human resources to fully implement the EMP. If any unanticipated environmental risks and impacts arise during construction or operation of the project that were not considered in the EIA and/or EMP, the HPG, through the implementing agencies, should promptly inform ADB in writing of the occurrence of such risks or impacts, with detailed description of the event and the proposed action plan for incorporation in the updated EIA and EMP.

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B. Resettlement 153. The project is classified as category A for involuntary resettlement according to ADB’s SPS (2009). 154. It is estimated that 318 households (1,075 persons) will be permanently affected by impacts on the collective farm land (908.37 mu).31 The impacts on the households are found to be marginal since the percentage of loss and annual income loss per capita income are not more than 10%. State-owned construction land will also be permanently occupied (197.25 mu). In terms of temporary impacts due to installation of water supply, drainage, sewer, and rainwater pipelines; 30 mu of collective land (12 households with 42 persons); and 631.65 mu of state-owned construction land will be affected. Impacts on houses are found to be significant since there are about 296 households (700 persons) affected by house demolition (31,704 m2) and will be required to relocate. Six public and private organizations (1,530 workers) will also be affected by impacts on structures. In addition, 10 stores (32 persons) were also identified as affected. 155. The government will ensure that (i) the four resettlement plans for Hegang, Jixi, Qitaihe, and Shuangyashan agreed between the government and ADB are updated based on meaningful consultation, final detailed design and detailed measurement surveys, and submitted to ADB for review and concurrence prior to land acquisition and house demolition activities and prior to contract award of concerned civil works contracts, and be implemented in accordance with applicable government laws and regulations and ADB’s Safeguard Policy Statement (2009); in case of any inconsistency between government laws and ADB’s policy, the latter will prevail; (ii) all affected persons are given adequate opportunity to participate in resettlement planning, updating, and implementation; (iii) counterpart funds for land acquisition and resettlement activities are provided according to the budget based on the finalized resettlement plans and project schedule; (iv) any additional costs in excess of the resettlement plan budget estimates are met within the project schedule; (v) all PMOs will designate adequate staff and resources to supervise and monitor updating and implementation of the resettlement plans and submit semiannual internal monitoring reports to ADB and will provide capacity development and/or training on involuntary resettlement safeguards issues and due diligence to the PMO staff and concerned resettlement agencies; (vi) a functional and effective GRM is established; and (vii) an external monitoring agency acceptable to ADB is engaged by the government and financed from the ADB loan to monitor progress and evaluate results of implementation of the resettlement plans. The external monitor will submit semiannual external monitoring reports simultaneously to the PMOs and ADB. C. Ethnic Minorities 156. The project is categorized as C for the Indigenous Peoples Safeguard. Ethnic minorities account for less than 4% of the population in project cities; and less than 4% in Qitaihe City. The minority population in those cities is extremely scattered, and the differences to the Han population in terms of language, customs, lifestyle, livelihood, and social security are minimal. The due diligence assessment confirmed that the ethnic minorities will benefit from the project as much as Han people, and they will suffer no negative impact, except for eight households with 22 people who will be affected by LAR. 157. Prohibited investment activities. Pursuant to ADB’s SPS, 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. Applicable for the FIC component: All financial institutions will ensure that

31 A mu is a Chinese unit of measurement (1 mu = 666.67 m2).

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their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list (Appendix 5) to subprojects financed by ADB. Details are in PAM Section B: Financial Intermediation Component and Business Development Services Component. D. Environment and Social Management System for the Financial Intermediary Loan Component 158. An ESMS arrangements was established for the FIC component. Eligibility criteria allow subprojects with Category C and Category B for environment, involuntary resettlement and indigenous peoples safeguards. Category A projects for environment, involuntary resettlement and indigenous people are excluded from financing under the FIC funded from the ADB loan. ESMS screening, safeguards categorization, monitoring and reporting has been established and adopted by the two financial intermediaries, Harbin Bank Corporation and Longjiang Bank Corporation. Consultants will support the financial intermediaries with due diligence, screening, safeguards categorization, and support due diligence and report preparation and provide training and capacity development. Details are in the Linked Document: Financial Intermediary: Environmental and Social Management System Arrangement. E. Climate Risk and Climate Financing

159. Climate financing investment for the project is estimated at $320.6 million. Climate mitigation financing is estimated to cost $148.6 million, and climate adaptation financing is estimated to cost $172.0 million. ADB will finance 27.4% of mitigation costs and 38.2% of adaptation costs. Detailed climate-risk vulnerability assessment findings are in the Supplementary Document: Climate-Risk and Vulnerability Assessment. 160. Overview of climate change and climate risks. The climate-risk vulnerability assessment key findings were that temperature and precipitation will increase between 2.5°C and 3.3°C, and 9.8% and 11.5% by 2050 in east Heilongjiang. It is also projected that frequency and intensity of extreme weather events will increase significantly. Those may include severe snow and rainfall storms, drought and floods caused by greater inter-annual and seasonal climate variability. An assessment of the project’s climate risks was carried out and proposals for sufficient proofing and/or adaptation measures were included in the feasibility study designs. 161. Climate risks to economy and to non-coal diversification sectors. Climate change is likely to affect many sectors of the regional economy in the subregion. Agriculture is one of the major sectors to be affected by changing temperature and precipitation regimes. For example, new crop and/or varieties may be required to be adopted to maintain or improve productivity. Changed temperature and precipitation regime may cause changed insects/disease patterns and cycles that required improved control measures. Extreme weather events may cause damages to crops, agricultural infrastructure and so on. Other sectors, such as transport and logistics, are also vulnerable to increased intensity and frequency of severe snow and storm events. Another issue is that pillar industries of the subregion are mostly high greenhouse gas (GHG) emission industries. There is a risk that such industries may be restricted by national and provincial policies in the future. Therefore, the priority of economic transformation should be given to those more environment-friendly and sustainable industries. 162. Climate risks to regional water resources. Many provincial government proposed alternatives industries are closely relating to available water resources, such as irrigation development and coal-fired power stations. Although the projected precipitation is likely to

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increase in the region, the available water resource is still likely to be a limiting factor to the regional economy because of the increases in inter-annual variability and increased evaporation caused by rising temperature. Resilience can be built by developing integrated regional water resource management, with consideration on climate change causing potential changes in water resource. 163. Climate risk of increased flooding. Flood is an issue of the subregion, which are not only caused by local intensive precipitation but also from upstream of the Songhua River or Heilongjiang River when intensive precipitation falls in upstream catchments of those rivers. There are also several river rehabilitation project components in the ADB project. Therefore, hydrological and hydraulic models have been developed to address flood and stormwater drainage issues. Based on rainfall runoff and hydraulic modelling results, the height of river levees was raised for 0.1m than the initial design of FSR for river rehabilitation works in Hegang and Jixi. Conservation measures on both sides of river banks are also included in the design, which is considered as a dual benefit activity to climate change, which is not only conserving river bank areas from erosion caused by floods and severe storms but also a mitigation measure as those trees and plants are also reducing GHG. 164. Because of increased intensity of rainfall or severe storms, an extra 10% of draining capacity is also designed for road surface drains and culverts of road works, stormwater drainage pipelines, and other drainage related works to ensure infrastructure is not flooded during severe storm events. However, it is also recognized the design standard for those cities are fairly low. Unlike river rehabilitation requirements of recurrence periods of 20 and 50 years for small tributaries and rivers, those drains, culverts, and pipelines are designed only for a 2-year recurrence interval. Based on the sponge city concept, the PRC Government requires more green fields in the roadside and residential areas to retain more stormwater instead of building large drainage pipelines. Therefore, more roadside and urban conservation areas are designed in the projects, which is again dual benefit activity to climate change. 165. The rising temperature will cause increased water consumption from households, industries and all other urban services. This will also cause increased volumes of sewerage and/or wastewater in cities and industrial parks. Therefore, a 5% of increases are designed for the water treatment plants, wastewater treatment plants, and water supply and sewerage and wastewater pipeline networks. The increased sewerage pipeline size is only designed for the future increased water consumption rather than stormwater because they are separated networks in the design. 166. Improved drainage systems are also included in the smart transport project component in the process of building bus lanes, bus stop bays, and non-motorized vehicle lanes. This is because the existing road drainage system was not sufficiently designed and built. Improving such drainage networks s also an important adaptation activity. 167. Energy saving measures are designed in all relevant project components. For example, LED light systems are designed for all road and bridge project components and others such as service center in Hegang and cultural plaza in Jixi. Extra insulation and other energy saving measures are also designed for these buildings and heating pipelines to reduce energy consumption. 168. There are some significant adaptation and mitigation project components in this project. Those mining site remediation projects are mostly remediating the mining sites and/or waste rock piles and then planting trees and recovering the vegetation. The remediation works are mainly an adaptation activities whilst vegetation restore activities are dual benefit activities. The Qitaihe

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public transport is a typical mitigation activity by replacing the current diesel buses with electrical buses. The smart transport component of Hegang included some substantial adaptation by improving the road drainage system but also a significant mitigation activity by encouraging usage of buses and non-motorized vehicles. 169. In addition to those structural proofing/adaptation measures, non-structural adaptation measures are equally important for the subregion in adapting future climate and reducing climate risks. Firstly, it is important to raise the awareness of government agencies of those project cities. Climate change related workshops and study tours may help relevant project officers and leaders understanding climate risks to their project and city as well as the needs for adopting adaptation and mitigation measures in the process of project implementing. More importantly, such understanding and comprehension of climate risks will help the government official to integrate climate change adaptation and mitigation in their policy formulation process and reducing climate risks. 170. Structural proofing/adaptation measures designed in this project are mostly for a section or part of the infrastructure. For example, river rehabilitation works are all for a section of the whole river, therefore, it will not prevent the whole river from flooding. Non-structural adaptation measures can be a supplementary to the structural measures built in this project. It is recommended that whole catchment conservation plans to be developed for Hegang and Jixi, where rivers and lakes will be rehabilitated in this project. similarly, it is also recommended such plans to be developed for upstream catchment of water supply reservoirs. Those include catchments of Xingkai Lake in Jixi, Taoshan reservoir of Qitaishan, and water protection catchments of Shuangyashan. 171. Water resource is very important to the economy and industries of east Heilongjiang sub-region. The water resources of the subregion may face challenges of competing uses by many of currently planned economic development activities. Climate change will exacerbate such competition because of greater inter-annual and seasonal precipitation variability and increased frequency and intensity of droughts. Developing integrated water resource management (IWRM) plans at the city level will help reduce risks of water shortage and drought caused by climate change. IWRM will also help project cities in developing their economic policies and infrastructure in response to climate change. Water saving is also an important issue for industries and urban services of project cities, which should also be included in the IWRM plans. 172. In addition to those non-structural adaptation measure, it is also recommended that ADB fund further studies on the heating supply system, especially its pricing system. The current heating supply system adopting fixed pricing based on the housing area made it difficult for government and heating supply companies to meet the needs of different resident groups and causes overheating in most of times during the long and harsh winter. A flexible pricing system based on individual heat/energy consumption is likely to reduce energy consumption, GHG, and air pollutant emission from heating system in northern PRC cities. 173. Data availability has also limited the accuracy of hydrological modelling. Firstly, there is no river gauging data available for all five rivers being rehabilitated in this project. This makes it difficult to validate the hydrological modelling results with observed river flows and stages. Secondly, the flood peaks are often affected by short, but intensive precipitation events rather than by daily precipitation totals but such data is not available to the team. Therefore, the accuracy of the hydrological modelling results is the best possible data with the available data but are improvable should those data were available to the study.

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VIII. GENDER AND SOCIAL DIMENSIONS

174. A poverty and social assessment (PSA) was undertaken during the project preparation phase in accordance with ADB guidelines on gender and social dimensions. The PSA included a review of secondary data, a household survey, focus group discussions (FGDs) and key informant interviews. The PSA assisted in the design of the various subcomponents to ensure they are socially inclusive and implemented with a high degree of community participation, especially for the local people including women, poor, and other vulnerable persons in the project areas. 175. The project will contribute to economic revitalization, non-coal industrial transformation, and socially inclusive, environmentally safe, and sustainable development of the four cities. Therefore, the project will contribute to poverty reduction by (i) improving public health, sanitation, and living conditions of local people; and (ii) supporting direct and indirect employment opportunities with expanded industries and enabling investment environment. It will support improved access to basic services, safety, and environmental sustainability through mining remediation, expanded and improved water supply, wastewater treatment, district heating, river rehabilitation, improved transport, and institutional coordination and capacity development. Based on the PSA, a SGAP has been formulated and agreed by the PMOs and implementing agencies. These actions will be implemented, progress will be monitored, and achievement of results will be measured and reported semiannually. The following sections provide some further guidance for the implementing agencies. A. Summary Poverty Reduction and Social Strategy 176. The total combined population in project cities is 5.2 million with urban populations of 870,000 (Hegang); 1,180,000 (Jixi); 540,000 (Qitaihe); and 960,000 (Shuangyashan). As designated resource-depleted cities in the PRC, Hegang, Jixi, Qitaihe and Shuangyashan cities are facing huge employment pressures resulting from both PRC supply-side reform on restricting small coal mining enterprises and unprofitable operation of coal mining itself in the project area. Heilongjiang and the project cities face serious economic decline due to severe price cuts of coal and changes in the PRC’s energy and climate policy, with reduced revenues in these coal mining dependent economies. Urban poverty, declining wages and population loss have become serious challenges for the four cities. Based on the PSA, more than 10% of urban people in the project area are poor. The main causes of poverty are unemployment, underemployment, and lack of qualified labor force. 177. With its comprehensive urban and economic revitalization approach, the project is expected to help stop and reverse the out-migration of the younger qualified workforce and attract and retain residents, companies, and jobs to more attractive project cities. The project will directly benefit 2.73 million urban residents. The indirect beneficiaries are the entire populations of the project cities. Benefits include (i) stronger SME competitiveness and jobs creation in improved non-coal industrial parks; (ii) better public image through mining remediation; (iii) improved water supply, sewerage, district heating, flood protection, roads, road safety, and public transport; (iv) greater environmental and traffic safety awareness through public education programs; and (v) increased cooperation between the project cities in tourism promotion, logistics and trade, supply chain integration, and SME support through smart city applications. By component, the project will benefit 2.18 million people (mining rehabilitation); 50,000 people in Hegang (district heating); 848,600 people excluding Hegang (water supply); 1.48 million people in Hegang and Jixi (river rehabilitation); 2.73 million people (road and traffic services); and 16,480 employees (industrial parks). The project will create 1,853 skilled and 5,430 unskilled jobs during project construction and 398 skilled and 138 unskilled jobs during the operation.

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178. Key design features of the project are (i) strengthening public participation and information disclosure on the project, including training, employment, green and inclusive business development opportunities; (ii) creating job opportunities for the poor and women, and provision of relevant training; (iii) raising awareness on environmental protection, road safety, and flood risk management through public education programs; (iv) promoting women-owned/managed SMEs participation in FIC scheme program through information disclosure and awareness raising; and (v) developing human resource capacity, including laid-off workers through TVET. The social and gender action plan (SGAP) has been prepared for this project to ensure mitigation of adverse impacts on beneficiaries and to maximize benefits and positive impacts of the project. In addition, it ensures (i) protection of labor that will be employed on project works by raising awareness and providing training for the contractors/subcontractors and employees on core labor standards (i.e., equal pay for equal work, no child labor, equal job opportunities, etc.), and (ii) mitigation of communicable diseases including HIV/AIDS and STI, human trafficking and prevention. Implementation and monitoring of the SGAP is included in the loan assurances.

B. Social and Gender Action Plan 179. The project is categorized as effective gender mainstreaming. The SGAP has been prepared for the project.32 The project will have significant benefits for women as they are primarily responsible for water collection and conservation, wastewater and solid waste disposal and management, as well as related household activities. According to the poverty and social analysis, women also use the public transport more often than men. Therefore, they considered improvements in traffic safety and access to better public transport service as important benefits to enhance their quality of life. Majority of female respondents support the project as it will generate more job opportunities locally for themselves and their family members. 180. The SGAP includes specific targets for women in employment during construction and operation, and participation that have been agreed by the PMOs and government agencies (i.e., Women’s Federation, Poverty Alleviation Office, Ethnic Minority and Religious Affairs Office, etc.). The following measures are included in the SGAP: (i) job opportunities during construction and operation (30%); (ii) consultation and participation opportunities in the design of location of bus stations, road and traffic safety facilities (50%); (iii) awareness raising on environmental protection, roads safety, river protection and flood risk management through public education program (50%); (iv) promotion of women-owned and managed SMEs and startups through FIC by providing targeted consultation and information disclosure to them (at least 50%), (v) 30% loans will be given to women-owned and/or managed SMEs and startups; and (vi) appropriate gender targets, indicators and sex-disaggregated data for project monitoring and evaluation. International and national social development specialists with gender expertise will be provided under the capacity development component to ensure the effective implementation of the SGAP. An assurance for implementation of the SGAP has been included. Activities and target indicators included in the SGAP will be monitored through the project performance management system and project progress reports on a semiannual basis, and ADB supervision missions. 181. To address the risk of spread of HIV/AIDS/STI, the project requires (i) inclusion of clauses on HIV/AIDS/STI and other communicable disease awareness for the contractors/subcontractors and employees into contract bidding documents; (ii) conduct of public health and HIV/STI prevention education to the civil works’ contractors and labor force; (iii) establishment of health measures for construction workers (e.g., setting up a temporary infirmary, using local

32 An SGAP has been prepared for this project and is presented in the PAM and assurances.

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medical resources); and (iv) conduct of diverse publicity activities on HIV/AIDS (e.g., brochures, posters, and leaflets). C. Other Social Aspects 182. As per the loan assurances, construction workers hired from the local communities will be trained on sanitation knowledge campaigns, health and occupational safety measures while working at the construction sites, and capacity building will be undertaken to protect their legal labor rights during construction or operations. 183. Labor issues. Core labor standards will be complied with based on national laws. Civil works contracts will stipulate priorities to (i) employ local people for works, (ii) ensure equal opportunities for women and men, (iii) pay equal wages for work of equal value, (iv) pay women’s wages directly to them, and (v) not employ children or forced labor. Specific targets for employment have been included in the SGAP. PMOs in conjunction with the implementing agencies are responsible for coordinating activities and ensure the implementation of the SGAP. The PMOs will monitor contractors’ compliance with these project assurances in conjunction with the Human Resources and Social Security Bureau, and Civil Affairs Bureau. The PMOs and implementing agencies shall assign or appoint one social development and gender (SDG) staff during project implementation to ensure timely and appropriate implementation of the SGAP. The SDG specialist in the project implementation consulting services will assist the PMOs and implementing agencies’ SDG staff. 184. Under the project management consulting services, SDG specialist (consultant) will be engaged to support the PMOs to implement the SGAP and other social aspects. It will be monitored internally and reported to ADB via semiannual progress reports. The SGAP will be monitored also by the external social monitor and reported through semiannual social monitoring reports.

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Table 42: Social and Gender Action Plan

Proposed Actions Indicators and Targets Responsible

Agencies Timeline Budget

Output 1: Capacity in business development services and integrated project planning and management developed

(i) Consultations and information disclosure investment and application procedure

(ii) Promotion of women-owned and/or managed SMEs during selection of SMEs for FIC support

(iii) Outreach activities organized for entrepreneurs trained in business planning

(iv) Non-coal SME projects in priority sectors implemented

(i) Number and percentage of SMEs and startups with 30% target for women-owned and/or managed SMEs

(ii) Number of loans received by SMEs and startups of which 30% is given to women-owned and/or managed SMEs and startups

(iii) At least 30 entrepreneurs trained and have accessed finance, 30% of which will be women (baseline: 0)

(iv) At least 15 non-coal SME projects in priority sectors implemented of which 30% are women leda (baseline: 0)

(i) Implementing agencies, PMOs

(ii) FIC, BDS (iii) Contractors (iv) Banks

2018–

2023

Project cost

Output 2: Sustainable small- and medium-sized enterprises investment and access to finance in project cities improved

(i) Design and build accessible bus stops, bicycle pathways, sidewalks, crosswalks, and traffic signals, and setting-up warning signs or isolation facilities on dangerous segments

(ii) Road traffic safety awareness program

(i) Consultation with community residents on identification of bus stops, traffic signs, sidewalks, pedestrian crossings

(ii) Road traffic safety awareness education program for residents with 50% female and 30% poor people participation


(ii) PIUs, design institutes

(iii) Contractors

2018–

2023

Project cost

Output 3: Key infrastructure and small- and medium-sized enterprises facilities in non-coal industrial parks in project cities constructed

(i) Consultation and information disclosure on mining remediation and environmental cleanup for affected communities

(ii) Adequate infrastructure facilities in the remediated mining park in Jixi

(i) Number and percentage of people participating in the consultation with 50% women participation

(ii) Well-lit roads with pedestrian and bicycle pathways


(ii) PIUs (iii) Contractors

2018–

2023

Project cost

Output 4: Remediation and environmental cleanup from mining impacts in project cities improved

Green and walkable streets and intelligent urban transport system

(i) Consultation on locations of bus stops, bicycle pathways, sidewalks, crosswalks, and traffic signals, and setting up warning signs, or isolation facilities on dangerous segments

(ii) Design of gender, age, and disability-sensitive road infrastructure and facilities

(iii) Traffic safety awareness and education for residents

(i) Number and percentage of people with 50% women participation

(ii) Number and type of gender, age, and disability-sensitive design features, applying universal design principles, like well-lit sidewalks, roads, bus stops, and terminals (including separate and safe facilities for women); accessible sidewalks with ramps, low-floor, and kneeling buses

(iii) Number and percentage of residents participating in the education program with 50% women participation


(ii) Design institutes

(iii) UMBs (iv) Bus

companies

2018–

2023

(i) UMBs’

operational

costs

(ii) Bus company

operational

costs

River rehabilitation and ecosystem-based adaptation

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(i) Identify proper locations of safety warnings, isolation facilities, and garbage bins along the rivers in consultation with residents

(ii) Public education program on environmental and river protection, flood risk management, and public health for nearby communities and schools

(i) Number and percentage of residents consulted (sex-disaggregated)

(ii) Number and percentage of participants of education program (disaggregated by sex and target groups, schools, and communities)

(i) Executing agency, implementing agencies, PMOs

(ii) WABs

2018–

2023

(i) Project cost (ii) Operational

costs of the WABs

Water supply and wastewater treatment systems, heating subcomponents

Public hearing for water supply and wastewater (Jixi, Qitaihe, and Shuangyashan), and heating tariff (Hegang) and bus fare (Qitaihe)

Number and percentage of people, with 50% women and 30% low-income people’s participation

(i) PMOs, PIUs (ii) Price bureaus (iii) CABs,

heating company

2018–

2023

Project cost local government budget

Output 5: Integrated urban infrastructure and services in project cities improved

(i) Recruitment of SDG specialist as part of the loan implementation consultant

(ii) The PMOs and implementing agencies assign at least one SDG specialist to be responsible for the implementation and reporting of the SGAP

(iii) PMOs and implementing agency staff are trained to ensure effective implementation of the project, particularly SGAP

(iv) Sex-disaggregated data will be collected through the PPMS to ensure the monitoring, evaluation, and reporting of the SGAP

(i) SDG consultant recruited with 12 person-months input (ii) One SDG focal person in each implementing agency

managing and coordinating SGAP activities (iii) At least 400 persons, of which 30% are women

reporting new skills in (a) project management; (b) BDS capacity development to SMEs (50 entrepreneurs of which 30% are women); (c) labor force assessment and TVET; (d) mining remediation; (e) smart city and city cluster cooperation; (f) flood risk management and sponge city; (g) water, wastewater, and drainage management and tariff reform; and (h) sustainable urban transport and road safety awareness

(iv) Collection of sex-disaggregated indicators and semiannual progress reports on SGAP

Executing agency,

implementing

agencies, and

PMOs

2018–

2023

Project management and capacity development budget

For Outputs 1, 3–5: Generating job opportunities and measures to reduce potential risks

(i) Generate 1,853 skilled and 5,430 unskilled jobs at the construction stage

(ii) Generate 398 skilled and 138 unskilled jobs at the operation stage

(iii) Include HIV/AIDS and other communicable disease clauses into contract bidding documents

(iv) Public health and HIV/AIDS, STIs, and sexual harassment prevention education program conducted

(i) 30% of which are first made available to the low income and 30% to women (baseline for female construction workers 20%)

(ii) 30% of which are first made available to the low income and 30% to women

(iii) Terms of construction contract and implementation (iv) Public health and HIV/AIDS, STIs, and sexual

harassment prevention training courses and number of trainees (disaggregated by sex and target groups)

(i) PMOs, PIUs (ii) Contractors (iii) LSSB, PAO,

CAB, women’s federation

(iv) Selected town, township, village, and community

2018–

2023

(i) Project construction and operation funds

(ii) Administrative cost of CDC

(iii) Cost of contractors

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committees

BDS = business development service, CAB = civil affairs bureau, CDC = center for disease control, DPS = disaster preparedness system, FIC = financial intermediary component, LSSB = Labor and Social Security Bureau, PAO = Poverty Alleviation Office, PIU = project implementation unit, PMO = project management office, PPMS = project performance management system, SDG = social development and gender, SGAP = social and gender action plan, SMEs = small- and medium-sized enterprises, STI = sexually transmitted infection, TVET = technical and vocational education and training, UMB = urban management bureau, WAB = water affairs bureau. a Women-led SMEs are SMEs that are founded by women and/or have female senior executives.

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IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION

PROJECT DESIGN AND MONITORING FRAMEWORK

Impacts the Project is Aligned with Economy revitalized and diversified, and non-coal industries in the cities of Hegang, Jixi, Qitaihe, and Shuangyashan developed (Heilongjiang Province’s Thirteenth Five-Year Plan)a Living environment, safety, and public health in cities of Hegang, Jixi, Qitaihe, and Shuangyashan improved (National New-Type Urbanization Plan, 2014–2020)b

Results Chain Performance Indicators with Targets

and Baselines

Data Sources and Reporting

Mechanisms Risks

Outcome By 2024 (baseline: 2016) Non-coal economic activities and urban livability in project cities increased

a. 2,000 person-year jobsc created in non-coal industries (baseline: 0)

b. At least 15 non-coal SME projects in priority sectors implemented, of which at least 30% are women-ledd (baseline: 0)

c. Land area affected by risks from mining impact reduced by 188.7 ha (baseline: not applicable)

d. Urban residents’ rate of satisfaction with road, water supply, wastewater, and heating services increased to 60% (baseline: 42% [road], 25% [water supply], 12% [wastewater], and 20% [heating])

a–d. Annual reports of administrative departments in Hegang, Jixi, Qitaihe, and Shuangyashan cities; and project completion report

Limited success in attracting non-coal SMEs because the government reverses SME development policies

Outputs By 2023 (baseline: 2016) 1. Capacity in BDS and

integrated project planning and management developed

1a. At least 400 individuals (at least 30% of them women) reported new skills in project management; labor force assessment and TVET; mining remediation engineering, strategic planning, and investment programming; smart city and city cluster cooperation and regional planning; flood risk management and sponge city design and investment planning;e water, wastewater, and drainage management; tariff reform and nonrevenue water reduction; and/or sustainable urban transport and road and traffic safety awareness (baseline: 0)

1b. BDS capacity development training provided to SMEs; and at least 50 entrepreneurs (at least 30% of them women) reported improved skills in business planning (baseline: 0)

1a–b. Project progress and completion reports; and training materials and knowledge products prepared by the consultants

2. Sustainable SME investment and access to finance in project cities improved

2a. At least $232 million for SME investments in project cities provided (baseline: 0)

2b. At least 30 entrepreneurs (30% of them women) have accessed finance (baseline: 0)

2c. At least 20 FI staff (30% of them women) report increased capacity on ESMS implementation (baseline: 0)

2a–b. Project progress and completion reports; and annual audits by financial intermediaries

2c. Technical assistance progress reports

PMOs and financial intermediaries lack experience in SME financing, ESMS implementation, due diligence, investment appraisal, and on ADB requirements

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and Baselines


Mechanisms Risks 3. Key infrastructure

and SME facilities in non-coal industrial parks in project cities constructed

3a. 18.4 km of roads with associated utilities constructed (Hegang, 6.3 km; Jixi, 4.3 km; Qitaihe, 2.1 km; and Shuangyashan, 5.7 km) (baseline: 0)

3b. Two WWTPs in non-coal industrial parks constructed and operational with a combined capacity of 26,000 m3/d (Hegang: 6,000 m3/d; Jixi: 20,000 m3/d) (baseline: 0)

3c. At least 56,000 m2 of multifunction SME facilities constructed and commissionedf (baseline: 0)

3a–c. Project progress and completion reports

Delays in availability of counterpart funding and in land acquisition and resettlement activities Uncertainty over women’s participation in SME financing and capacity development

4. Remediation and environmental cleanup from mining impacts in project cities improved

4. Mining remediation pilots in project cities implemented, including stabilization, soil cleanup, clay lining, soil cover, and afforestation on 188.7 ha (Hegang: 52.6 ha; Jixi: 89.7 ha; Qitaihe: 21.7 ha; Shuangyashan: 24.7 ha) (baseline: 0)

4. Project progress and completion reports

5. Integrated urban infrastructure and services in project cities improved

5a. Hegang: four rivers with a total length of 19.9 km rehabilitated and green flood protection embankment constructed (baseline: 0)e

5b. Hegang: 7.2 km primary and 65.2 km secondary old district heating pipes retrofitted (baseline: 0)

5c. Hegang: 34.3 km road with sidewalks rehabilitated, including 29.1 km of bus priority lanes; and intelligent transport system equipment at 50 improved bus stops and lighting for safety of women installed (baseline: 0)

5d. Jixi: two rivers with a total length of 8.7 km and Hongqi lake (23.5 ha) rehabilitated and green flood protection embankment constructed (baseline: 0)e

5e. Jixi: WTP with capacity of 50,000 m3/day upgraded and 72.5 km water supply pipes retrofitted; 23.3 km of sewers, and 32.5 km of drainage pipes and/or trench constructed (baseline: 0)

5f. Jixi: 2.2 km of roads with associated utilities and a public park (3.2 ha) and 18,000 m2 of multifunction public training facilities constructedf (baseline: 0)

5g. Qitaihe: two WTPs with capacities of 100,000 m3/d and 50,000 m3/d upgraded, 17.8 km old main pipes retrofitted, 73.2 km pipes installed, and 15 pump stations built (baseline: 0)

5h. Qitaihe: 209 electric buses procured; and three bus terminals, f including

5a–j. Project progress and completion reports

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and Baselines


Mechanisms Risks separate and safe facilities for women, constructed (baseline: 0)

5i. Shuangyashan: 24.7 km of water supply pipes, 3 pump stations, and 3 water tanks constructed and their equipment installed; and 85.1 km of sewers and 52.3 km of drainage pipes installed (baseline: 0)

5j. Shuangyashan: 6.7 km of key road links constructed (baseline: 0)

Key Activities with Milestones 1. Capacity in BDS and integrated project planning and management developed 1.1 Recruit and mobilize implementation support consultants by 2018 1.2 Implement BDS support to SMEs during 2018–2023 1.3 Implement capacity development training during 2018–2023 1.4 Implement and monitor EMP, resettlement plan, and SGAP during 2018–2023 2. Sustainable SME investment and access to finance in project cities improved 2.1 Complete onlending agreements and subloan templates by quarter 4 2017 2.2 Identify subprojects and sign subloan agreements for first batch by quarter 1 2018 2.3 Identify subprojects in project cities and sign subloan agreements for second batch by quarter 2 2023 3. Key infrastructure and SME facilities in non-coal industrial parks in project cities constructed 3.1 Design infrastructure, acquire land, and procure works during 2018–2020 3.2 Implement infrastructure works and equipment installation during 2018–2023 4. Remediation and environmental cleanup from mining impacts in project cities improved 4.1 Design, acquire land, and procure works during 2018–2020 4.2 Implement works during 2018–2023 5. Integrated urban infrastructure and services in project cities improved 5.1 Design infrastructure, acquire land, and procure works during 2018–2020 5.2 Implement infrastructure works and equipment installation during 2018–2023 Inputs ADB: $310 million (loan)g Government: $315 million

Assumptions for Partner Financing EIB: $220 million equivalent (loan)h Domestic commercial banks: $106.4 million Subborrowers: $69.6 million Outputs not administered by ADB that are necessary to reach the outcome include selected subcomponents of outputs 3 and 4 (EIB)

ADB = Asian Development Bank, BDS = business development services, EIB = European Investment Bank, EMP = environmental management plan, ESMS = environmental and social management system, FIC = financial intermediation component, ha = hectare, km = kilometer, m2 = square meter, m3/d = cubic meter per day, PMO = project management office, Q = quarter, SGAP = social and gender action plan, SMEs = small- and medium-sized enterprises, TVET = technical and vocational education and training, WTP = water treatment plant, WWTP = wastewater treatment plant. a Heilongjiang Provincial Government. 2016. Thirteenth Five-Year Plan. Harbin. b Government of the People’s Republic of China, State Council. 2014. National New-Type Urbanization Plan, 2014–

2020. Beijing; Municipal Government of Hegang. 2016. Thirteenth Five-Year Plan. Hegang; Municipal Government of Jixi. 2016. Thirteenth Five-Year Plan. Jixi; Municipal Government of Qitaihe. 2016. Thirteenth Five-Year Plan. Qitaihe; Municipal Government of Shuangyashan. 2016. Thirteenth Five-Year Plan. Shuangyashan.

c “Person-year job” is defined as 12 months of employment equivalent for one person. d Women-led SMEs are SMEs that are founded by women and/or have female senior executives. e The flood risk management component is included in output 5 and as capacity development in output 1. It includes

structural and nonstructural measures, such as hydrological and hydraulic modeling across the river basin, identification of upstream and downstream flood plain preservation options, early warning systems, adjustments to riverside greenway to increase flow and retention capacity, and additional stormwater retention ponds and depressed open space network. Sponge city is a concept in which greenways, parks, and wetlands maximize ecosystem services, including water resource management and stormwater retention, using ecosystems-based adaptation.

f Each city will design, build and operate at least one pilot 2-star green building or above under the PRC’s green building standard or green industrial building standard for buildings financed under the project.

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g Allocation for the (i) investment project components (outputs 1, and 3–5): $254.00 million (Hegang—$73.91 million, Jixi—$63.80 million, Qitaihe—$26.54 million, and Shuangyashan—$89.75 million); and (ii) FIC (output 2): $56.00 million (Hegang—$20.00 million, Jixi—$8.00 million, Qitaihe—$13.00 million, and Shuangyashan—$15.00 million).

h EIB loan allocation by project cities is $81.09 million for Hegang, $23.20 million for Jixi, $85.46 million for Qitaihe, and $30.25 million for Shuangyashan.

Source: Asian Development Bank.

B. Monitoring

1. Project Performance Monitoring

185. The project performance management system (PPMS) indicators, their relevance, and monitoring practicalities will be discussed with the executing agency, implementing agencies and project beneficiaries during project implementation. Disaggregated baseline data for output and outcome indicators gathered during project processing will be updated and reported quarterly through the semiannual progress reports of the project management office and after each ADB review mission. These semiannual reports will provide information necessary to update ADB's project performance reporting system. 33 At the start of project implementation, the PMOs and implementing agencies, with the project implementation consulting services, will develop integrated PPMS procedures to generate data systematically on the inputs and outputs of the components, as well as the indicators to be used to measure the project’s impact and outcome considering the components’ scope. The PMOs will be responsible for monitoring and reporting on project performance. The basis for performance monitoring will be the design and monitoring framework (DMF), which identifies performance targets for the impact, outcomes, and outputs of the project. By collecting data from the sources identified in the DMF, the PMOs will be able to report on an annual basis the performance of the project. Specific reporting requirements will be set out in the agreement between ADB and the Government. The PMOs will collect the data, calculate the indicators, analyze the results, and prepare a brief report describing the extent to which the project is generating the intended outputs and outcomes, as well as the overall impact on HPG. The relevance and practicability of data collection for indicators was confirmed with the PMO and the implementing agencies. Meanwhile, the agreed socioeconomic and environmental indicators to be used will be further enhanced to measure project impacts. The PMOs and the implementing agencies agreed and confirmed that they will (i) refine and integrate the PPMS framework at the start of project implementation; (ii) confirm that targets are achievable; (iii) develop recording, monitoring, and reporting arrangements; and (iv) establish systems and procedures no later than 6 months after project inception.

2. Compliance Monitoring

186. The HPG, implementing agencies, and the project management consultants will conduct compliance monitoring, and submit reports and information to ADB concerning the use of the loan proceeds, project implementation, implementing agencies’ project implementation performance, and compliance with loan and project covenants. These reports will include (i) quarterly progress reports on project implementation; and (ii) a project completion report, which should be submitted not later than 3 months after the completion of the project facilities. The compliance status of loan and project covenants will be reported and assessed through quarterly progress reports. ADB review missions will verify status.

33 ADB’s project performance reporting system is available at http://www.adb.org/Documents/Slideshows/PPMS

/default.asp?p=evaltool

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3. Safeguards Monitoring

(a) Environment 187. Three types of environment safeguard monitoring will be conducted under the EMP: compliance monitoring, internal monitoring, and external monitoring. The environmental monitoring program, including roles, responsibilities, monitoring frequency and variables, is described in Section E of the EMP. ADB and the PMOs will monitor the status of EMP implementation through: (i) PMO quarterly project progress reports and semiannual environmental progress reports to ADB, (ii) reports by the loan implementation environment consultant (LIEC) to PMOs and ADB, and (iii) review missions. EMP implementation will be coordinated by the PMOs’ environment officer, supported by the PMOs, project municipal and county EPBs, but not limited to LIEC, to ensure overall compliance of all relevant agencies with the EMP. 188. Compliance monitoring documents and procedural compliance of the project with the EMP, including all required tasks of mitigation, monitoring, and reporting will be conducted by the LIEC.

189. Internal monitoring. The management of construction activities and quantitative measurement of selected environmental variables will be conducted by the implementing agencies and construction contractors. During construction, monitoring will include air quality and noise at construction sites and the discharge water quality, odor and treated sediment quality at dredge spoil treatment sites. During operations, internal monitoring will include the quality of treated wastewater and sludge from the WWTPs and the progress of embankment and wetland landscaping. 190. External monitoring. The quantitative measurement of selected environmental variables at and near construction sites is to ensure compliance with regulatory standards. External monitoring covers many of the same parameters as internal monitoring, to verify results by the implementing agencies and contractors. External monitoring will monitor for dust, noise, odor, dredge spoil, and surface water quality and flow, aquatic invertebrates, and surface water quality and flow (the latter in the operational phase), etc. 191. Project readiness inspection. Before construction, the LIEC will assess the readiness of the PMO and implementing agencies for environmental management, based on a set of indicators (Table A1.3 in the EMP) and report to ADB and PMOs. This assessment will demonstrate that environmental commitments are being met and environmental management systems are in place before construction starts, and/or suggest corrective actions to ensure that all requirements are met. 192. Environmental acceptance reporting. Following the PRC Regulation on Project Completion Environmental Audit (MEP, 2001), within 3 months after the completion of major components, an environmental acceptance report for each component will be prepared by a licensed environmental monitoring institute. The report will be reviewed and approved by the PMOs and reported to ADB. The environmental acceptance reports of the completed components will indicate the timing, extent, effectiveness of completed mitigation and of maintenance, and the needs for additional mitigation measures and monitoring during operations.

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(b) Resettlement 193. Internal and external monitoring of resettlement plan implementation will be conducted. Monitoring methodologies are specified in the resettlement plan. The PMOs will carry out internal supervision and monitoring to ensure compliance with the provisions of the resettlement plan and submit internal resettlement monitoring reports semiannually during project implementation, to be submitted together with the regular project monitoring report. An external monitoring agency acceptable to ADB will be engaged by the PMOs prior to commencement of resettlement plan implementation and land acquisition. The external monitoring agency will prepare a pre- resettlement plan implementation baseline study, and implement external monitoring and evaluation of resettlement plan implementation. Semiannual external monitoring reports and post-evaluation reports will be prepared and submitted simultaneously to the PMO during resettlement implementation, and within 2 years after conclusion of resettlement plan implementation.

4. Social and Gender Action Plans

194. Monitoring indicators for the social and gender action plan (SGAP) have been incorporated into the PPMS. Clear targets and indicators have been established and some indicators, such as those on employment, are also captured in the DMF. The regular project progress reports to ADB will include, at least semiannually, reporting on those indicators. Assistance will be provided for the PMOs and implementing agencies by the social development and gender consultant who will help to set up effective monitoring systems and work with the focal points in the PMOs and implementing agencies to ensure implementation of the SGAP. The SGAP will be monitored semiannually and reported via the quarterly project progress reports and during ADB review missions. The external monitoring agency will also monitor the implementation progress of SGAP and report through the semiannual external monitoring reports. C. Evaluation 195. ADB, HPG, and the implementing agencies will undertake a semiannual review mission to evaluate the progress of project implementation. ADB, HPG, and implementing agencies will undertake a comprehensive midterm review two years after the start of project implementation to have a detailed evaluation of the scope, implementation arrangements, resettlement, achievement of scheduled targets, and progress on the agenda for policy reform and capacity building measures. Feedback from the PPMS activities will be analyzed. Within 3 months of physical completion of the project, the PMOs will submit a project completion report to ADB.34 D. Reporting 196. The executing agency 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 the next 12 months; and (iii) a project completion report within 6 months of physical completion of the project. To ensure that projects will continue to be both viable and sustainable, project accounts and the executing agency audited financial statement together with the associated auditor's report, should be adequately reviewed.

34 Project completion report format available at http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-Sector-

Landscape.rar

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E. Stakeholder Communication Strategy

197. Project information will be communicated through public consultation, information disclosure mechanism in ADB’s and government’s website, meetings, interviews, FGDs, and community consultation meetings, in accordance with ADB’s requirements of information disclosure policy. Main stakeholders are the different government agencies, beneficiaries, displaced persons, and participants in the project implementation. Stakeholder communication is part of the Social Development Action Plan and the Gender Action Plan, and will be monitored accordingly. 198. Environment. Meaningful consultation, participation and information disclosure was conducted during project preparation. Information disclosure and public consultation included newspaper disclosure; informal communication with key stakeholders, including residents, local authorities and sector specific institutions and authorities; questionnaire surveys; and wider stakeholder meetings attended by affected people and other concerned stakeholders. A GRM has been defined to prevent and address community concerns, reduce risks, and assist the project in maximizing environmental and social benefits. 199. Involuntary resettlement. Consultation meetings have been carried out with the affected households during resettlement planning and will continue during resettlement plan updating and implementation. Copies of the resettlement booklets were placed in village offices. The PMOs will continue to facilitate the conduct of consultation meetings and disclosure. The four resettlement plans have been uploaded on the ADB website. 200. Public disclosure. Public disclosure of all project documents will be undertaken through the Implementing Agency and on the ADB website including the project data sheet, DMF, EIA report, resettlement plans, and the report and recommendation of the President. Disclosure of social and environmental monitoring reports will be undertaken during project implementation. 201. Social and gender action plan. Consultations with communities have taken place and will continue at different points in the preparation and implementation of the GAP and social development action plan within the components, and will be designed not only to inform people about the component or specific activities related to its preparation and implementation, but also to enable people in the community to ask questions, make suggestions, state preferences, and express concerns. Special attention will be paid to the participation of women and any other vulnerable groups, such as the poor.

202. Public awareness and education program on environmental and river protection, flood risk management and public health, road traffic safety for nearby communities and schools will be conducted as part of the project components and actions to enhance the involvement of women is included in the SGAP. Public hearings will be held for any proposed adjustments in water supply and sanitation and heating tariffs with adequate representation of poor, women, and other vulnerable groups.

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X. ANTICORRUPTION POLICY

203. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project. 35

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 and/or 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.36 204. To support these efforts, relevant provisions are included in the loan and project agreements and the bidding documents for the project.

XI. ACCOUNTABILITY MECHANISM

205. 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 an effort in good faith 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.37

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL

206. All revisions and/or updates during implementation should be retained in this section to provide a chronological history of changes to implemented arrangements recorded in this project administration manual.

35 ADB. 2010. Anticorruption and Integrity: Policies and Strategies. https://www.adb.org/documents/anticorruption-and-

integrity-policies-and-strategies 36 ADB Anticorruption and Integrity Website. https://www.adb.org/site/integrity/main 37 ADB Accountability Mechanism Website. https://www.adb.org/site/accountability-mechanism/main