South Asia Subregional Economic Cooperation National Single Window Project (RRP MLD 51330-001)

Project Number: 51330-001 Grant Number: GXXXX April 2019

Republic of Maldives: South Asia Subregional

Economic Cooperation Program National Single

Window Project

Project Administration Manual

ABBREVIATIONS

ADB – Asian Development Bank ADF – Asian Development Fund CBRA – Cross-border Regulatory Agency CPD – Client Portal for Disbursements FMA – Financial Management Assessment ICT – information and communication technology MACL – Maldives Airport Company Limited MCS – Maldives Customs Service MOD – Ministry of Defense MED – Ministry of Economic Development MFDA – Maldives Food and Drug Authority MMA – Maldives Monetary Authority MFMRA – Ministry of Fisheries, Marine Resources and Agriculture MOF – Ministry of Finance MPL – Maldives Ports Limited NSW – National Single Window PAM – project administration manual PMU – project management unit SASEC – South Asia Subregional Economic Cooperation SOE – Statement of expenditure

CONTENTS

I. PROJECT DESCRIPTION 1

II. IMPLEMENTATION PLANS 2

A. Project Readiness Activities 2 B. Overall Project Implementation Plan 3

III. PROJECT MANAGEMENT ARRANGEMENTS 5

A. Project Implementation Organizations: Roles and Responsibilities 5 B. Key Persons Involved in Implementation 7 C. Project Organization Structure 8

IV. COSTS AND FINANCING 9

A. Cost Estimates Preparation and Revisions 10 B. Key Assumptions 11 C. Detailed Cost Estimates by Expenditure Category 11 D. Allocation and Withdrawal of Loan and Grant Proceeds 11 E. Detailed Cost Estimates by Financier 12 F. Detailed Cost Estimates by Outputs and/or Components 13 G. Detailed Cost Estimates by Year 14 H. Contract and Disbursement S-Curve 15 I. Fund Flow Diagram 16

V. FINANCIAL MANAGEMENT 18

A. Financial Management Assessment 18 B. Disbursement 20 C. Accounting 21 D. Auditing and Public Disclosure 22

VI. PROCUREMENT AND CONSULTING SERVICES 23

A. Advance Contracting and Retroactive Financing 23 B. Procurement of Goods, Works, Non-consulting and Consulting Services 23 C. Procurement Plan 25 D. Consultant's Terms of Reference 27

VII. SAFEGUARDS 27

VIII. GENDER AND SOCIAL DIMENSIONS 28

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 28

A. Project Design and Monitoring Framework 28 B. Monitoring 31 C. Evaluation 31 D. Reporting 31 E. Stakeholder Communication Strategy 32

X. ANTICORRUPTION POLICY 32

XI. ACCOUNTABILITY MECHANISM 32

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 32

Project Administration Manual Purpose and Process

1. The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with the policies and procedures of the Government of Maldives 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.

2. The Ministry of Finance (MOF), the Ministry of Economic Development (MED), Maldives Customs Service (MCS), Maldives Food and Drug Authority (MFDA), the Ministry of Fisheries, Marine Resources and Agriculture (MFMRA), the Ministry of Defense (MOD), Maldives Ports Limited (MPL), Maldives Airport Company Limited (MACL), and Maldives Monetary Authority (MMA) 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 MOF, MED, MCS, MFDA, MFMRA, MOD, MPL, MACL and MMA of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.

3. At loan and grant negotiations, the borrower and ADB shall agree to the PAM and ensure consistency with the loan and grant agreement. Such agreement shall be reflected in the minutes of the loan and grant negotiations. In the event of any discrepancy or contradiction between the PAM and the loan and grant agreement, the provisions of the loan and grant agreement shall prevail.

4. After ADB Board approval of the project's report and recommendations of the President,

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.

Note: The name of the operational financing document may vary on a project-to-project basis; this reference shall be deemed to encompass such variations, e.g., a Framework Financing Agreement, as applicable.

I. PROJECT DESCRIPTION

1. The project will leverage information and communication technology (ICT) to provide online access to carry out border control procedures. This will enable traders and other service providers to transact business using electronic forms. In addition, the project will facilitate sharing of harmonized data to enable automated processing of documents across stakeholder systems. This will contribute to the government’s sectoral strategy to establish a single window system for international trade facilitation. 2. The project is aligned with the following impacts: (i) Top 40 ranking on the World Bank Ease of Doing Business Index achieved by 2025;1 and (ii) Faster, cheaper, and more predictable cross-border trade in the South Asia Subregional Economic Cooperation (SASEC) subregion achieved.2 The project will have the following outcome: Efficiency in cargo clearance improved.3 3. Output 1: National single window system for international trade and reengineered trade processes established. The nationwide online system that provides for all relevant parties to submit standardized information at a single-entry point to fulfill all import, export, and transit-related regulatory requirements will be established in two phases. In the first phase, systems of the agencies which show high readiness,4 will be interfaced with the NSW system. The systems of the rest of the CBRAs will be connected in the second phase. The capacity building for operation and maintenance will be provided under the project. Business processes reengineering measures to streamline international procedures will be implemented. By project completion in 2023, the local NSW operator will be fully responsible for operations of the NSW. 4. Output 2: Capacity of relevant agencies and private sector users, including women, to utilize the national single window developed. This output will be financed by the TA and includes (i) supporting the government in finalizing the NSW framework and e-transaction bill, (ii) developing and implementing a change management strategy, capacity development plan, and NSW operations manual to increase buy-in and capacity of CBRAs and other relevant agencies to utilize the NSW; and (iii) outreach to private sectors, including women in inner and outer atolls. The NSW Operator will also set up a helpdesk to assist NSW users. 5. Output 3: High-level technologies to support national single window and trade facilitation pilot tested. This output will be financed by the TA and includes pilot testing the application of blockchain, a high-level technology that enables users to track shipping items and record all related documentation history on its distributed ledger without a chance of falsification. Blockchain has the potential to be adopted as the future operating system of the NSW system. An e-payment gateway platform—a component of the NSW to be connected to e-payment systems—functions as a hub and simplifies the processing of payment transactions for electronic services. The project will disseminate pilot-testing results, raise awareness, and build knowledge and capacity of the officials of all agencies related to the NSW system, to familiarize them with relevant blockchain and e-payment applications.

1 Government of Maldives, Ministry of Economic Development. 2013. Maldives Economic Diversification Strategy. Male. 2 ADB. 2016. South Asia Subregional Economic Cooperation Operational Plan 2016–2025. Manila 3 The design and monitoring framework is in Appendix 1. 4 An agency system is considered ready for interface with the NSW system when necessary technical adjustments

are completed.

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II. IMPLEMENTATION PLANS

A. Project Readiness Activities

Table 1: Project Readiness

Indicative Activities

Months

Apr 2019

May 2019

Jun 2019

Jul 2019

Aug 2019

Sep 2019

Responsible Individual/Unit/Agency/ Government

Advance contracting actions MOF, MED

Retroactive financing actions MOF, MED, ADB

Establish project implementation arrangements

MOF, MED, MCS, MFDA, MFMRA, MOD, MPL, MACL, MMA

ADB Board approval ADB

Grant/loan signing MOF, ADB

Government legal opinion provided MOF

Government budget inclusion MOF

Grant/loan effectiveness MOF, ADB

ADB = Asian Development Bank, MACL = Maldives Airport Company Limited, MCS = Maldives Customs Service, MOD = Ministry of Defense, MED = Ministry of Economic Development, MFDA = Maldives Food and Drug Authority, MFMRA = Ministry of Fisheries, Marine Resources and Agriculture, MMA = Maldives Monetary Audit, MOF = Ministry of Finance, MPL = Maldives Ports Limited. Source: Asian Development Bank.

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B. Overall Project Implementation Plan

6. Project implementation plan recording key implementation activities on a quarterly basis is provided in Table 2 below. It will be updated annually and submitted to ADB with contract and disbursement projections for the following year. The project implementation period is 4.0 years.

Table 2: Overall Project Implementation Plan

Indicative Activities 2018 2019 2020 2021 2022 2023

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

A. DMF

1. National Single Window System for international trade established

1.1 Finalize application architecture

1.2 Fix specifications for NSW

1.3 Tender for NSW system hardware and software

1.4 Award a contract for NSW system hardware

1.5 Set up NSW governance structure

1.6 Harmonize data

1.7 Finalize service level agreements

1.8 Draft amendments to legal framework based on gap analysis completed

1.9 Align existing systems of the relevant agencies with streamlined processes

1.10 NSW Phase 1 pilot test

1.11 NSW Phase 1 go live

1.12 NSW Phase 2 pilot test

1.13 NSW Phase 2 go live

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2. Capacity of private sector users, including women, to utilize the NSW developed

2.1 Prepare and implement change management strategy/plan

2.2 Prepare capacity development and awareness raising plan, including consultation with at least 3 women’s organization

2.3 Implement capacity development and awareness raising plan, including outreach targeting women

2.4 Set up help desk

B. Project Management Activities

Set up Project Management Unit

Engage Technical Advisors

Conduct users’ satisfaction survey

Conduct quarterly review missions and midterm review

Prepare project completion report

DMF = design and monitoring framework, NSW = national single window. Source: Asian Development Bank.

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III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Implementation Organizations: Roles and Responsibilities

Table 3: Project Implementation Organizations Project Implementation Organizations

Management Roles and Responsibilities

Executing agency: Ministry of Finance (MOF)

• Guide and monitor overall project execution

• Supervise financial issues; ensure flow of funds to the implementing agencies and timely availability of counterpart funding; and ensure adequate budget for successful implementation of the project

• Monitor compliance with project legal agreements

• Supervise procurement following the government’s rule; responsible for approving procurement; and review and coordinate evaluation of bids for works, goods, and consultant services

• Maintain project accounts and project financial records

• Review and sign withdrawal applications before submitting to Asian Development Bank (ADB)

• Approve project management unit (PMU)

National Trade Facilitation Committee (Chair: Minister of Economic Development)

• Oversee the project.

• Make policy level decisions.

• Conduct high level coordination among the stakeholders.

Steering Committee (Chair: Ministry of Economic Development (MED); Members: Representatives from Maldives Customs Service, Maldives Food and Drug Authority, the Ministry of Fisheries, Marine Resources and Agriculture, the Ministry of Defense, Maldives Ports Limited, Maldives Airports Company Limited, Maldives Monetary Authority, and National Centre for Information Technology)

• Provide overall strategic guidance and policy direction to facilitate project implementation

• Responsible for high-level troubleshooting

• Meet quarterly (or as needed) to review project performance and resolve issues

• Ensure collaboration among central level agencies

Lead implementing agency: MED • Establish PMU (MED)

• Coordinate with other implementing agencies

• Conduct overall day-to-day project management, monitoring, and evaluation

• Ensure timely decisions for efficient procurement and contract management

• Implement changes in procedures and systems as required to interact with National Single Window

• Responsible for all procurement contracts under the project with support from MOF

• Report to ADB through MOF

• Ensure system for sustainable operation and maintenance (O&M) of project facilities

• Share knowledge with wider communities

Other implementing agencies

(Maldives Customs Service, Maldives Food and Drug Authority, Ministry of Fisheries, Marine Resources and Agriculture, Ministry of Defense, Maldives Ports Limited, Maldives Airport Company Limited, Maldives Monetary Authority)

• Conduct overall day-to-day project management, monitoring, and evaluation

• Ensure timely decisions for efficient procurement and contract management

• Implement changes in procedures and systems as required to interact with NSW

• Responsible for all procurement contracts under the project which will be signed by MED with support from MOF

• Provide technical and institutional capacity building support

• Report to ADB through MOF and MED

• Ensure system for sustainable operation and maintenance of project facilities

• Share knowledge with wider communities

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Project Implementation Organizations

Management Roles and Responsibilities

Working groups (Business Process Redesign (BPR), ICT, Legal)

Business Process Redesign (BPR) working group:

• Review the business processes

• Confirm that the new processes can be implemented or else propose alternate processes towards the objective of streamlining procedures

• Identify any impact to other cross-border regulatory agencies (CBRAs)/stakeholders and resulting actions as a result of the process changes

• Lead data harmonization activities as per agreed business process changes and IT related requirements for data exchange

• Propose a workplan for implementation of the changes to procedures ICT working group:

• Document information exchanges that will be required between NSW and respective computer systems; the information exchanges shall be as those finalized by the BPR working group

• Identify changes required to CBRA / stakeholder systems in order to interface with the NSW

• Prepare workplan for CBRA system changes

• Provide support to BPR working group, as required, towards data harmonization

Legal working group:

• Identify any amendments required to legal framework for the operations of the NSW, and amendments to legal framework to support change in business processes that will result from operations of the NSW

• Propose work plan for changes to legal framework

PMU in MED • Responsible for overall project management, implementation and monitoring

• Maintain project financial records and accounts

• Monitor and ensure the compliance of covenants, particularly timely submission of audited project accounts and compliance with safeguard requirements

• Prepare bidding documents request for proposals, and bid evaluation reports following the government’s rule

• Serve as a point of contact with ADB, maintains project documents, and submit timely reports (quarterly progress reports and project completion report) to ADB through MOF

• Consolidate expenditures and prepare withdrawal applications for direct payment, reimbursements and use of advance fund procedure

• Open and manage advance fund account for ADB grant/loan

• Collect supporting documents and submit withdrawal applications to ADB via Ministry of Finance

ADB • Conduct project review missions, midterm review mission and project completion review mission to assess project implementation progress of all outputs, compliance of grant/loan covenants including actions required in terms of safeguards (environmental impacts and social mitigation measures applicable); timeliness of budgetary allocations and counterpart funding; project expenditures; progress with procurement and disbursement

• Post on ADB website the updated project information documents and safeguards documents as per disclosure provision of the ADB safeguards policy statement

• Review executing agency and implementing agency’s submissions for procurement of goods, equipment, works and services and provides comments and no objection on the submissions

• Check Statement of Expenditure on sampling basis

Source: Asian Development Bank

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B. Key Persons Involved in Implementation

Executing Agency Ministry of Finance (MOF) Maryam Abdul Nasir

Chief Resource Mobilization and Debt Management Executive Resource Mobilization and Debt Management Division Telephone No.: +960 3349109 Email address: mariyam.abdulnasir@finance.gov.mv

Office Address: Ameenee Magu, Malé 20379 Officer's Lead Implementing Agency Ministry of Economic Development (MED)

Name: Yusuf Riza Position: Permanent Secretary Telephone No.: +960 - 3333152 Email address: yusuf.riza@trade.gov.mv

Office address: Other Implementing Agencies

Maldives Customs Service (MCS)

Name: Ahmed Niyaz Position: Senior Superintendent Telephone No.: +960 - 7904535 Email address: ahmed.niyaz@customs.gov.mv

Maldives Food and Drug Authority (MFDA)

Name: Sajidha Mohamed Position: Senior Scientific Officer Telephone No.: +960 - 7988011 Email address: sajidha@health.gov.mv

Office Address: Ministry of Fisheries, Marine Resources and Agriculture (MFMRA)

Name: Ahmed Shifaz Position: Assistant Director Telephone No.: +960 - 3339252 Email address: ahmed.shifaz@fishagri.gov.mv

Office Address: Ministry of Defense (MOD) Name: Ahmed Shiyau

Position: Director Telephone No.: +960 - 9886134 Email address: ahmed.shiyau@defence.gov.mv

Office Address: Maldives Ports Limited (MPL) Name: Ilyas Mohamed

Position: Database Engineer Telephone No.: +960 - 9777909 Email address: Ilyas@port.mv

Office Address:

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Maldives Airport Company Limited (MACL)

Name: Amjadh Naseer Position: Manager Telephone No.: +960 - 9666320 Email address: amjadh.naseer@macl.aero

Office Address: Maldives Monetary Authority (MMA)

Name: Mariyam Hussain Didi Position: Assistant Governor Telephone No.: +960 - 7904571 Email address: mariyamhd@mma.gov.mv

Office Address: Asian Development Bank

South Asia Regional Cooperation and Operations Coordination Division

Ronald Antonio Butiong Director Telephone No.: +63 2 632 5775 Email address: rabutiong@adb.org

Mission Leader Masato Nakane

Senior Economist Telephone No.: +63 2 632 6685 Email address: mnakane@adb.org

C. Project Organization Structure

7. The executing agency is the MOF, the lead implementing agency is MED, and the other implementing agencies are MCS, MFDA, MFMRA, MOD, MPL, MACL, and MMA. The MED as a lead implementing agency will establish a project management unit (PMU) comprising 4 staff. The National Trade Facilitation Committee will oversee the project and NSW steering committee will provide overall policy and strategic guidance to the project. Working groups, chaired by the Project Manager will coordinate project design and implementation issues. 8. A consulting firm will be recruited under the associated technical assistance to support the NSW system introduction and relevant capacity building.

9. A dedicated full-time PMU will be established for the project and includes 4 staff as follows: (i) project manager, (ii) software engineer, (iii) accountant, and (iv) administrative assistant. PMU staff are recruited from the market, and PMU costs are estimated at $2.9 million for the project. 10. The flow chart of the project organization will be as follows.

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Figure 1: Project Organization Structure Executing Agency

Implementing Agencies

IV. COSTS AND FINANCING

11. The government has requested for a concessional loan of $5.00 million from ADB’s ordinary capital resources to help finance the project. The loan will have a 32-year term, including a grace period of 8 years; an interest rate of 1.0% per year during the grace period and 1.5% per year thereafter; and such other terms and conditions set forth in the draft loan agreement. The government has also requested a grant not exceeding $5.00 million from ADB’s Special Funds resources (Asian Development Fund) to help finance the project.5 The summary cost estimates for the project is in Table 4.

5 Following ADB’s concessional assistance policy para. 31, ADB provided the country allocation to Maldives on a 50%

COL and 50% ADF terms.

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Table 4: Summary Cost Estimates ($ million)

Item Amounta

A. Base Costb

Output 1: National single window system for international trade and reengineered trade processes established

10.91

Subtotal (A) 10.91 B. Contingenciesc 0.92

C. Financial Charges During Implementationd 0.16 Total (A+B+C) 11.99

Note: Outputs 2 and 3 will be supported by the attached TA. a Includes taxes and duties of $0.67 million. Such amount does not represent an excessive share of the project cost. b In mid-2018 prices. c Physical contingencies computed at 4.9% for equipment; price contingencies computed at 1.5%–1.6% on foreign

exchange costs, and 2.8%–3.0% on local currency costs. d Includes interest charges. Interest during implementation of the concessional ordinary capital resources loan has

been computed at 4.5% per year corresponding to implementation period. Source: Asian Development Bank estimates.

12. The government will provide $1.99 million to the investment costs of the project to finance (i) taxes and duties; and (ii) part of equipment, incremental recurrent costs, and contingencies; and will provide the loan and grant proceeds and counterpart funds to the implementing agencies as loan and grant. The government has assured that it will meet any financing shortfall to ensure that project outputs are fully achieved. The summary financing plan for the project is in Table 5.

Table 5: Summary Financing Plan Amount

($ million) Share of Total (%) Source

Asian Development Bank 10.00 83.4 Ordinary capital resources (concessional loan) 5.00 41.7 Special Funds resources (Asian Development Fund grant) 5.00 41.7

Government 1.99 16.6 Total 11.99 100.0

Source: Asian Development Bank estimates. A. Cost Estimates Preparation and Revisions

13. The cost estimates have been prepared based on the feasibility study prepared by ADB in consultation with the Government of Maldives. The cost estimates will be updated during project implementation.

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B. Key Assumptions

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

(i) Exchange rate: Rf15.41 = $1.00 (as of August 2018); (ii) Price contingencies based on expected cumulative inflation over the

implementation period are in Table 6; (iii) In-kind contributions cannot be easily measured and have not been quantified.

Table 6: Escalation Rates for Price Contingency Calculation

Item 2018 2019 2020 2021 2022 2023 Average

Foreign rate of price inflation 1.6% 3.2% 4.8% 6.4% 8.0% 9.6% 1.6%

Domestic rate of price inflation 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% 3.0%

Source: Asian Development Bank estimates.

C. Detailed Cost Estimates by Expenditure Category

Table 7: Cost Estimates by Expenditure Category ($ million)

Item Total Cost

Total Net Cost

Taxes % of Total Base Cost

A. Investment Costs

1. Turnkey Contract 6.47 6.07 0.40 59.30%

Subtotal (A) 6.47 6.07 0.40 59.30%

B. Recurrent Costs

1. Salaries 1.46 1.38 0.08 13.39% 2. Equipment operation and maintenance 2.98 2.80 0.18 27.30%

Subtotal (B) 4.44 4.17 0.27 40.70%

Total Base Cost 10.91 10.24 0.67 100.00%

C. Contingencies

Subtotal (C) 0.92 0.92 - 8.41%

D. Financial Charges During Implementation

Subtotal (D) 0.16 0.16 - 1.49%

Total Project Cost (A+B+C+D) 11.99 11.32 0.67 109.90%

Note: Numbers may not sum precisely because of rounding. Turnkey contracts include 6 individual packages on information technology development activities.

D. Allocation and Withdrawal of Loan and Grant Proceeds

Table 8: Allocation and Withdrawal of Loan Proceeds ($ million)

No. Item Total Amount Allocated for ADB Financing Category

Basis of Withdrawal from the Loan Account

1 Turnkey Contracts 3.04 46.9% of total expenditure claimed

2 Recurrent – Incremental and Administrative Costs

1.51 34.0% of total expenditure claimed

3 Unallocated 0.46

5.00

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Table 9: Allocation and Withdrawal of Grant Proceeds ($ million)

No. Item Total Amount Allocated for ADB Financing Category

Basis of Withdrawal from the Grant Account

1 Turnkey Contracts 3.04 46.9% of total expenditure claimed

2 Recurrent – Incremental and Administrative Costs

1.51 34.0% of total expenditure claimed

3 Unallocated 0.46

5.00

E. Detailed Cost Estimates by Financier

Table 10: Detailed Cost Estimates by Financier ($ million)

Item ADB (ADF Grant) ADB (COL)___ ________ Government_________ Total Cost (1)___ Amount % of Cost

Category Amount % of Cost

Category Tax

Amount Non Tax

Total % of Cost Category

Amount Taxes and Duties

A. Investment Costs Turnkey Contracts 3.04 46.9% 3.04 46.9% 0.40 - 0.40 6.2% 6.47 0.40 Subtotal (A) 3.04 46.9% 3.04 46.9% 0.40 - 0.40 6.2% 6.47 0.40

B. Recurrent Costs Salaries 0.17 11.5% 0.17 11.5% 0.08 1.04 1.13 77.0% 1.46 0.08 Equipment operation and maintenance

1.34 45.0% 1.34 45.0% 0.18 0.12 0.30 10.1% 2.98 0.18

Subtotal (B) 1.51 34.0% 1.51 34.0% 0.27 1.16 1.42 32.1% 4.44 0.27 Total Base Cost 4.54 41.6% 4.54 41.6% 0.67 1.16 1.83 16.7% 10.91 0.67

C. Contingencies 0.46 50.0% 0.46 50.0% - - - 0.0% 0.92 -

D. Financial Charges during implement- ation

- 0.0% - 0.16 0.16 100.0% 0.16

Interest during implementation

- 0.0% - 0.16 0.16 100% 0.16

Commitment Fees - 0.0% - - - 0.0% -

Total Project Cost (A+B+C+D)

5.00 41.7% 5.00 41.7% 0.67 1.32 1.99 16.6% 11.99 0.67

ADB = Asian Development Bank, ADF = Asian Development Fund, COL = concessional ordinary capital resources lending. Notes: i. Numbers may not sum precisely because of rounding. ii. The costs of the actual audits $25,000 approximately annually will be borne by the government. Source: Asian Development Bank estimates.

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F. Detailed Cost Estimates by Outputs and/or Components

Table 11: Detailed Cost Estimates by Outputs ($ million)

Item Total Cost National Single Window System for International Trade and Reengineered CBRA Trade

Processes Established

Capacity to Operate, Utilize, Maintain and Enhance the National Single Window

Developed

Amount % of Cost Category

Amount % of Cost Category

A. Investment Costs

1. Turnkey contracts 6.47 6.38 98.6% 0.09 1.41%

Subtotal (A) 6.47 6.38 98.6% 0.09 1.41%

B. Recurrent Costs

1. Salaries 1.46 1.46 100.00% - 0.00%

2. Equipment operation and maintenance 2.98 2.98 100.00% - 0.00% Subtotal (B) 4.44 4.44 100.00% - 0.00%

Total Base Cost 10.91 10.82 99.16% 0.09 0.84%

C. Contingencies

1. Physical 0.45 0.44 99.06% 0.00 0.94%

2. Price 0.47 0.47 99.06% 0.00 0.94%

Subtotal I 0.92 0.91 99.06% 0.01 0.94%

D. Financial Charges During Implementation

1. Interest during construction 0.16 0.16 100.00%

0.00%

2. Commitment charges - - 0.00% - 0.00%

Subtotal (D) 0.16 0.16 - 0.00%

Total Project Cost (A+B+C+D) 11.99 11.89 99.17% 0.10 0.83%

Note: Numbers may not sum precisely because of rounding.

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G. Detailed Cost Estimates by Year

Table 12: Detailed Cost Estimates by Year ($ million)

Item Total Cost Year 1 2019

Year 2 2020

Year 3 2021

Year 4 2022

Year 5 2023

A. Investment Costs

1. Turnkey contract 6.47 0.98 3.30 1.10 1.10 -

Subtotal (A) 6.47 0.98 3.30 1.10 1.10 -

B. Recurrent Costs

1. Salaries 1.46 0.30 0.32 0.33 0.34 0.17

2. Equipment operation and

maintenance 2.98 0.48 0.25 0.87 1.31 0.07

Subtotal (B) 4.44 0.78 0.57 1.20 1.65 0.24

Total Base Cost 10.91 1.75 3.86 2.30 2.75 0.24

C. Contingencies

1. Physical 0.45 0.07 0.17 0.09 0.11 0.00

2. Price 0.47 0.07 0.18 0.10 0.12 0.01

Subtotal I 0.92 0.14 0.34 0.19 0.23 0.01

D. Financial charge during implementation

1. Interest during implementation 0.16 0.02 0.03 0.04 0.04 0.03

2. Commitment Charges - - - - - -

0.16 0.02 0.03 0.04 0.04 0.03

Total Project Cost (A+B+C+D) 11.99 1.92 4.24 2.53 3.03 0.28

100% 16% 35% 21% 25% 2%

Note: Numbers may not sum precisely because of rounding.

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H. Contract and Disbursement S-Curve

Figure 2: Contract and Disbursement S-Curve Loan Component

($ million)

Figure 3: Contract and Disbursement S-Curve Grant Component

($ million)

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Table 13: Quarterly Projection of Contract Award (Loan)

Table 14: Quarterly Projection of Contract Award (Grant)

Table 15: Quarterly Projection of Disbursement (Loan) ($ million)

Table 16: Quarterly Projection of Disbursement (Grant) ($ million)

I. Fund Flow Diagram

15. A separate advance account should be established by MOF and maintained by MED for the grant and loan. The funds will flow from ADB and the borrower to implement project activities, and how documents for requests for disbursement will flow to ADB are shown below.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Investment Costs

Contract Awards 5.00 - - 4.54 - - - - - - - - - 0.46 - - - -

- - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - -

5.00 - - 4.54 - - - - - - - - - 0.46 - - - - -

Year-5 (2023)Item

Total Project Cost (A+B+C+D)

Total Year-1 (2019) Year-2 (2020) Year-3 (2021) Year-4 (2022)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Investment Costs

Contract Awards 5.00 - - 4.54 - - - - - - - - - 0.46 - - - -

- - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - -

5.00 - - 4.54 - - - - - - - - - 0.46 - - - - -

Year-5 (2023)Item

Total Project Cost (A+B+C+D)

Total Year-1 (2019) Year-2 (2020) Year-3 (2021) Year-4 (2022)

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

Investment Costs

1.     Turnkey contract 3.34 - - - 0.50 - 0.85 0.85 - - - - 0.57 0.57 - - - - -

1. Salaries 0.19 - 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

2.  Equipment operation and maintenance 1.48 - 0.08 0.08 0.08 0.01 0.01 0.09 0.01 0.01 0.33 0.09 0.01 0.02 0.02 0.09 0.54 0.02 0.02

5.00 - 0.09 0.09 0.59 0.02 0.87 0.95 0.02 0.02 0.34 0.10 0.59 0.59 0.03 0.10 0.55 0.03 0.03

Year-5 (2023)Item Total

Year-1 (2019) Year-2 (2020)

Total Project Cost (A+B+C+D)

Year-3 (2021) Year-4 (2022)

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

Investment Costs

1.     Turnkey contract 3.34 - - - 0.50 - 0.85 0.85 - - - - 0.57 0.57 - - - - -

1. Salaries 0.19 - 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

2.  Equipment operation and maintenance 1.48 - 0.08 0.08 0.08 0.01 0.01 0.09 0.01 0.01 0.33 0.09 0.01 0.02 0.02 0.09 0.54 0.02 0.02

5.00 - 0.09 0.09 0.59 0.02 0.87 0.95 0.02 0.02 0.34 0.10 0.59 0.59 0.03 0.10 0.55 0.03 0.03 Total Project Cost (A+B+C+D)

Year-5 (2023)Total

Year-1 (2019) Year-2 (2020)Item

Year-3 (2021) Year-4 (2022)

17

Figure 4: Fund Flow Diagram for Direct Payment Procedure

(i) WA for Direct Payment

TRANSFER FUNDS

Document flowFund flow

ADB = Asian Development Bank, CPD = Client Portal for Disbursements, MED = Ministry of Economic Development, MOF = Ministry of Finance, PMU = project monitoring unit, WA = withdrawal application

Figure 5: Fund Flow Diagram for Reimbursement Procedure

Document flowFund flow

ADB = Asian Development Bank, CPD = Client Portal for Disbursements, MED = Ministry of Economic Development, MOF = Ministry of Finance, PMU = project monitoring unit, WA = withdrawal application

(vii)

(vi)

(iii)

(v)

(ii)

(viii)

(iv)

(i) (i) Grant/loam agreement between MOF and ADB. (ii) Invoices submitted to PMU/MED for payment. (iii) PMU/MED requests for payment. (iv) MOF makes payment. (v) PMU consolidates expenditure, fills WA and forwards it to MOF (vi) MOF checks the WA compared with the attached supporting documents, verifies, and approves. (vii) MOF forwards the WA to ADB via CPD (viii) ADB financing amount is reimbursed to MOF Note: Authorized signatories are from MOF (minimum of two signatures would be placed).

ADB

MOF

MED

CONTRACTORS/SUPPLIER/ CONSULTANT/

PMU EXPENSES

PMU

(vi)

(iv) (iii)

(ii)

(v) (i) Grant/loan agreement between MOF and ADB. (ii) Invoices submitted to PMU/MED for direct payment. (iii) PMU fills WA forms along with the required supporting documents and forward it to MOF. (iv) MOF checks the WA compared with the attached supporting documents, verifies and approves. (v) Once approved by MOF WA reaches ADB via CPD. (vi) ADB financing amount is paid directly to contractor/ supplier/ consultant. Note: Authorized signatories are from MOF (minimum of two signatures would be placed).

ADB MOF

MED

CONTRACTORS/ SUPPLIERS/ CONSULTANT

PMU

18

Figure 6: Fund Flow Diagram for Advance Fund Procedure

Document flow Fund flow

ADB = Asian Development Bank, MED = Ministry of Economic Development, MMA = Maldives Monetary Authority, MOF = Ministry of Finance, PMU = project monitoring unit, WA = withdrawal application

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

16. A Financial Management Assessment (FMA) of MOF and MED was conducted for the NSW Project (the project) during June-August 2018 in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects (2005) and FMA Technical Guidance Note (May 2015). This included an assessment of the financial management capacity of MOF and MED including fund-flow and budgeting arrangements, staffing, accounting and financial reporting systems, financial information systems, internal controls, and internal and external auditing arrangements. The primary instrument used for the assessment was ADB’s financial management assessment questionnaire, information obtained through desk research and ICPS governance risk assessment. The most recent FMA done for Kulhudhuffushi Harbor Expansion Project6 and Greater Male Environmental Improvement and Waste Management Project7 is also used as they are more relevant in terms of country FM arrangement, the fund flow and role of MOF in donor-funded projects and updated with recent information collected. 17. MOF is the executing agency and MED is the lead implementing agency. There are several implementing agencies involved in this project and as a result, coordination becomes a

6 ADB.2016. Report and Recommendation of the President to the Board of Directors: Proposed Grant and Technical

Assistance Grant to the Republic of the Maldives for the Kulhudhuffushi Harbor Expansion Project. Manila. 7 ADB.2018. Report and Recommendation of the President to the Board of Directors: Proposed grant and Technical

Assistance Grant and Administration Grant to the Republic of the Maldives for the Greater Male Environmental Improvement and Waste Management Project. Manila.

(i) (i) Grant/loan agreement between MOF and ADB. (ii) PMU prepares the forecasted project expenditure for next six months. Then, PMU fills WA forms and forwards for verification to MOF. (iii) MOF checks the WA compared with the attached supporting documents, verifies and approves. (iv) Once WA is approved by authorized signatories, ADB financing amount is paid to the Advance Account. (v) MOF makes payment. Note: Authorized signatories are from MOF (minimum of two signatures would be placed).

(ii) (iii)

(iv)

ADB MOF

MMA Advance ACCOUNT

IN USD

MED

PAYMENTS (PMU EXPENSES/

RECURRENT EXPENSES)

PMU

(v)

19

key to project success8. MED has implemented recently closed Micro, Small and Medium-Sized Enterprise Development Project9 and therefore they are familiar with ADB disbursement procedures. A PMU will be established under MED headed by a project manager. An accountant, a software engineer and an administrative officer are proposed to be hired to help support the project manager in executing day-to-day project implementing activities. The PMU will be responsible for administering, implementing, monitoring, reporting and coordinating project activities. The PMU will also facilitate the proceedings of the NSW Steering Committee.

18. The major risks identified during the assessment which need to be addressed include:

(i) weak or absence of an internal audit division within MED; (ii) ineffective fixed asset control within MED and its agencies; (iii) new PMU staff may not possess knowledge on ADB disbursement and financial

management requirements; and (iv) operating integration of all implementing agencies with MED and other ministries

(difficulty in coordination and communication).

19. Overall risk assessment for the project is considered “Substantial”. Despite these risks, the given mitigation measures along with the action plan can be considered adequate to implement the proposed project satisfactorily.

Table 17: Financial Management Action Plan

8 Ministry of Economic Development, Maldives Customs Service, Maldives Food and Drug Authority, Ministry of

Fisheries, Marine Resources and Agriculture, Ministry of Defense, Maldives Ports Limited, Maldives Airport Company Limited, Maldives Monetary Authority are the other implementing agencies.

9 ADB.2012. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Grant Republic of the Maldives: Inclusive Micro, Small, and Medium-Sized Enterprise Development Project. Manila.

Risk Area Action Plan Responsibility Timeframe

Weak financial reporting and budgeting

MED to fill the vacant director finance and administration position

MED As soon as possible

Relevance of information

Audit report of MED for FY2016 to be finalized and issued.

MED Before 2019 (Q1)

Staffing

Recruitment of PMU staff comprising project manager, project accountant, information technology officer and project administration officer comprising project manager, accountant, information technology officer and administration officer

MED, MOF Before negotiation

PMU staff are to follow online training materials available on ADB web site. When ADB organizes training programs, workshops, or other means such as videoconferences, etc. on disbursement and financial management, PMU staff are encouraged to join.

MED, PMU Online courses to be followed within the first year.

Internal control

PMU accountant to maintain a separate fixed asset register for the assets purchased under the project with proper labeling of assets and reconcile with records maintained by other IAs (if assets purchased under project are handed over to other IAs.)

MED, PMU Upon establishment of PMU and continue to update

Money received/ collected under the proposed project should be recorded and corresponding records should be

MED, PMU As and when a transaction occurs

20

ADB = Asian Development Bank, IA = implementing agency, MED = Ministry of Economic Development, MOF =

Ministry of Finance, PMU = project monitoring unit, TOR = terms of reference.

B. Disbursement

1. Disbursement Arrangements for ADB Funds

20. The grant/loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time)10, and detailed arrangements agreed upon between the government and ADB. Online training for project staff on disbursement policies and procedures is available.11 Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control. 21. ADB’s disbursement procedures (direct payment, commitment, reimbursement, and advance fund) will be used for withdrawal of grant and loan funds. Withdrawal applications will be authorized by MOF and sent directly to ADB. PMU established under MED is responsible for collecting, certifying and retaining the documents for payments.

22. Advance fund procedure. The advance fund account will be established, managed, replenished and liquidated in accordance with the Loan Disbursement Handbook. Separate advance account should be established and maintained by MED for the grant and loan. 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 government (MOF and MED) who administers the advance account is accountable and responsible for proper use of advances to the advance accounts. No sub accounts are proposed.

10 The handbook is available electronically from the ADB website (http://www.adb.org/documents/ loan-disbursement-

handbook. 11 Disbursement eLearning. http://wpqr4.adb.org/disbursement_elearning

available for verification. All payments should be acknowledged by the relevant recipient and should be available for verification.

Proposed project should be included in the internal audit plan of the MOF’s internal audit division. Internal audit function should particularly focus on effective operation of internal controls.

MED, PMU Frequency should be agreed by PMU.

Delay in project implementation and risk of making late payment with interest contributing to increase in overall project cost

Obtain required counterpart budget on time. Estimate requirements for each year during the budget process with accurate projection based on the need (work plan and the progress).

MED, MOF, ADB Annually (estimate should start by June/July every year)

Inaccurate financial information generated

Accounting system – Procuring of off- the-shelf accounting package

MED, PMU As soon as the PMU is set up

Reliability and reasonable assurance on the financial statements/use of the funds for intended purpose

Prepare project financial statement within two months from the fiscal year-end. Project financial statement to include ADB requirements mentioned in para. 40 of this financial management assessment.

MED, PMU Every year

Submit audited project financial statements to ADB within 6 months from the fiscal year-end

MED, MOF Every year

Finalize audit TOR MED, PMU Within 3 months of effectiveness

21

23. The total outstanding advance to the advance accounts should not exceed the estimate of ADB’s share of expenditures to be paid through the advance accounts for the forthcoming 6 months. The PMU under the guidance of MED may request for initial and additional advances from the advance accounts based on an Estimate of Expenditure Sheet12 setting out the estimated expenditures to be financed through the accounts for the forthcoming 6 months. Supporting documents should be submitted to ADB or retained by PMU and MED in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time) when liquidating or replenishing the advance accounts. 24. Statement of expenditure procedure.13 The statement of expenditure (SOE) procedure may be used for reimbursement of eligible expenditures or liquidation of advances to the advance account. The ceiling of the SOE procedure is the equivalent of $100,000 per individual payment. 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. Reimbursement and liquidation of individual payments more than the SOE ceiling should be supported by full documentation when submitting the withdrawal application (WA) to ADB. 25. Before the submission of the first 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 MED (PMU) 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 disbursements. Use of ADB’s Client Portal for Disbursements (CPD)14 system is encouraged for submission of withdrawal applications to ADB.

2. Disbursement Arrangements for Counterpart Fund

26. MED will be responsible for (i) preparing disbursement projections, and (ii) requesting budgetary allocations for counterpart funds.

C. Accounting

27. MED will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the project following cash-based accounting system following the government’s financial regulations. MED will prepare project financial statements in accordance with the Government of Maldives accounting laws and regulations which are consistent with international accounting principles and practices. Project financial statements shall include at a minimum, a statement of receipts and payments with accompanying notes and schedules. These shall be prepared to ensure maximum alignment to international accounting standards.

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

amended from time to time), 13 SOE forms are available in Appendix 7B and 7D of ADB’s Loan Disbursement Handbook (2017, as amended from

time to time). 14 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

D. Auditing and Public Disclosure

28. The MED will cause the detailed consolidated project financial statements to be audited in accordance with the International Standards on Auditing (equivalent to the national standards adopted by the Government of Maldives as prescribed by the International Standards for Supreme Audit Institutions) by an independent auditor acceptable to ADB. The audited project financial statements together with the auditor’s opinion will be presented in English language to ADB by MOF within 6 months from the end of the fiscal year. 29. 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 and grant were used only for the 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).

30. 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.

31. The government, MOF and MED 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.15 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.

32. 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 2011.16 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.17

15 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.

16 Public Communications Policy: http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications 17 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).

23

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

33. All procurement of goods, works, non-consulting and consulting services for the proposed Project will be carried out in accordance with the ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). Unless otherwise agreed with ADB, the ADB Standard Bidding Documents and Standard Requests for Proposals will be used for all procurement.

34. In case of conflict contradiction between ADB procurement procedures and any national rules and regulations, ADB procurement procedures would take precedence. The general descriptions of procurement items under different expenditure categories are described below. For each contract to be financed under the project, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frames are agreed between the Borrower and ADB and included in the initial Procurement Plan.

35. Advance contracting. The Borrower may proceed with the initial steps of procurement before signing the financing agreement. Such contracts will be eligible for financing under the Project, only if the procurement procedures including advertising are consistent with the Procurement Policy and Regulations mentioned above. Any concurrence by ADB on procedures, documentation or contract award will not constitute a commitment by ADB to finance the project. 36. Retroactive financing. Withdrawals from the loan account may be made for reimbursement of reasonable expenditures incurred under the project before effective date, but not earlier than 12 months before the date of the Loan Agreement in connection with recruitment of PMU staff and PMU related equipment under the project, subject to a maximum amount equivalent to 20% of the grant and loan amounts.

B. Procurement of Goods, Works, Non-consulting and Consulting Services

37. All procurement of goods, works, non-consulting and consulting services for the proposed Project will be carried out in accordance with the ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). The procurement items, estimated costs, and mode of procurement are shown in Table 18.

24

Table 18: Summary of Procurement Items

Item No.

Description No of

lot/contract

Estimated costs (US$

million)

Method of procurement

01 Develop, Install, Supply, and Maintain NSW Software and Hardware (Information Technology Product)

01 8.01 a OCB (Internationally advertised)

02 ASYCUDA enhancement software development for NSW installation

01 0.24 Direct Contracting with UNCTAD

03 Interfaces development in existing software systems in MFDA, MFMRA, MED and MOD

04 0.15 RFQ

Total 8.40

ASYCUDA = Automated System for Customs Data, NSW = National Single Window, MOD = Ministry of Defense, MED = Ministry of Economic Development, MFDA = Maldives Food and Drug Authority, MFMRA = Ministry of Fisheries, Marine Resources and Agriculture, OCB = open competitive bidding, RFQ = request for quotation, UNCTAD = United Nations Conference on Trade and Development. a The amount includes management cost included as recurrent cost in various cost tables. Note: Estimates are excluding tax and contingency.

38. Information Technology Products. An IT product contract, including 3 years operation and maintenance obligation will be conducted through open competitive bidding advertised internationally. Single-stage-one-envelop procedure will be followed.

39. Consulting Services. The consulting services will be engaged in accordance with ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). 40. Bid Security. Where required, bid security shall be in the form of certified cheques, Bank guarantee from a reputable bank or bonds issued by insurance companies registered in Maldives. Bid Security Declaration may be accepted.

41. ADB Policy Clauses. A provision shall be included in all contracts financed by ADB requiring contractors to allow ADB to inspect their accounts and records and other documents relating to the bid submission and the performance of the contract, and to have them audited by auditors appointed by ADB.

42. A provision shall be included in all bidding documents or Request for Proposal for 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.

43. A provision shall be included in all bidding documents for 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.

44. ADB Review of Procurement Decisions. Procurement carried out by PMU with MOF’s support as identified in the procurement plan, are subject to prior review by ADB as described in Appendix 6 of the Procurement Regulations.

25

C. Procurement Plan

Table 19: Procurement Plan

Basic Data

Project Name: South Asia Subregional Economic Cooperation Program National Single Window Project

Project Number: 51330-001 Approval Number:

Country: Maldives Executing Agency: Ministry of Finance

Project Procurement Classification: A Implementing Agency: Ministry of Economic Development and others Procurement Risk: High

Project Financing Amount: $11.99 million ADB Financing $10.00 million Ordinary Capital Resources (concessional loan): $5.00 million Special Funds Resources (ADF Grant): $5.00 million Government of Maldives: $1.99 million

Project Closing Date: 30 December 2023

Date of First Procurement Plan Date of this Procurement Plan: 25 March 2019

Procurement Plan Duration: 18 months Advance contracting: Yes e-GP: No

ADB = Asian Development Bank, ADF = Asian Development Fund, e-GP = electronic government procurement.

45. Except as ADB may otherwise agree, the following methods shall apply to procurement of goods, works, non-consulting services, and consulting services.

Table 20: Procurement of Goods, Works, and Non-consulting Services Method Applicability Comments

Open Competitive Bidding

Internationally advertised. Prior review.

Direct Contracting ASYCUDA enhancements UNCTAD

Request for Quotations Interfaces development in existing software systems

MFDA, MFMRA, MED and MOD

ASYCUDA = Automated System for Customs Data, MOD = Ministry of Defense, MED = Ministry of Economic Development. MFDA = Maldives Food and Drug Authority, MFMRA = Ministry of Fisheries, Marine Resources and Agriculture, UNCTAD = United Nations Conference on Trade and Development

Table 21: Consulting Services

Method Comments

None

46. List of Active Procurement Packages (Contracts). The following table lists goods, works, non-consulting services, and consulting services contracts for which the procurement activity is either ongoing or expected to commence within the procurement plan duration.

26

Table 22: Goods, Works, and Non-consulting services Package Number

General Description

Estimated Value

Procurement Method

Review Bidding

Procedure

Advertisement Date

Comments

01 Develop, Install, Supply, and Maintain NSW Software and Hardware

8.01 Open Competitive

Bidding

Prior 1S1E Q2/2019 (a) Internationally advertised; (b) No Pre-qualification/ No domestic preference; (c) IT Products Bidding Document; (d) Under advance contracting; (e) No e-GP

02 ASYCUDA enhancement software development for NSW installation

0.24 Direct Contracting

Prior NA NA Direct contracting with UNCTAD

03-06 Interfaces development in existing software systems

0.15 Request for Quotations

Prior NA TBD Software providers for

MFDA, MFMRA, MED and MOD

ASYCUDA = Automated System for Customs Data, 1S1E = single-stage-one-envelope, e-GP = electronic government procurement, IT = information technology, MED = Ministry of Economic Development, MFDA = Maldives Food and Drug Authority, MFMRA = Ministry of Fisheries, Marine Resources and Agriculture, MOD = Ministry of Defense, NSW = National Single Window, TBD = to be determined, UNCTAD = United Nations Conference on Trade and Development. Note: Estimates are excluding tax and contingency

Table 23: Consulting services

Package Number

General Description

Estimated Value

Selection Method

Review Type of Proposal

Advertisement Date

Comments

None

Note: Estimates are excluding tax and contingency.

47. List of Indicative Packages (Contracts) Required under the Project. The following table lists goods, works, non-consulting services, and consulting services contracts for which the procurement activity is expected to commence beyond the procurement plan duration and over the life of the project (i.e., those expected beyond the current procurement plan duration).

Table 24: Goods, Works, and Non-consulting services Package Number

General Description

Estimated Value

Procurement Method

Review Bidding Procedure

Comments

None

Table 25: Consulting Services

Package Number

General Description

Estimated Value

Selection Method

Review Type of Proposal

Comments

None

27

48. List of Awarded and Completed Contracts. The following table lists the awarded contracts and completed contracts for goods, works, non-consulting services, and consulting services.

Table 26: Goods, Works, and Non-consulting services Package Number

General Description Contract Value

Date of ADB Approval of

Contract Award

Date of Completion

Comments

None

Table 27: Consulting Services Package Number

General Description

Contract Value

Date of ADB Approval of

Contract Award

Date of Completion

Comments

None

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

Table 28: Goods, Works, and Non-consulting services General Description Estimated

Value (cumulative)

Estimated Number of Contracts

Procurement Method

Comments

None

Table 29: Consulting Services

General Description Estimated Value

(cumulative)

Estimated Number of Contracts

Selection Method

Comments

None

D. Consultant's Terms of Reference: None

VII. SAFEGUARDS

50. According to the ADB’s Safeguard Policy Statement (2009), the project is categorized as C for impacts on the environment, involuntary resettlement, and indigenous peoples. The project involves provision of laptops and servers which will be installed within existing buildings. No civil works will be implemented. The environmental and social safeguards impact from the implementation of the project are negligible.

51. During project implementation, the MOF, through its implementing agencies, will ensure that there will be no or minimal adverse environmental impacts and disposal of all ICT equipment associated with the project will be in compliance with the national regulations. If there are any deviations in project scope that require any of the safeguard categories to be changed, MOF must immediately inform ADB for further advice on preparation of assessment and planning documents. 52. During implementation, the MOF will further ensure that the project does not result in any involuntary resettlement or indigenous peoples impacts and no activity that could have potential

28

social safeguards implications will be undertaken until the impacts are assessed and plans with mitigation measures are prepared and approved by the ADB. 53. Prohibited investment activities. Pursuant to ADB’s Safeguard Policy Statement (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 Safeguard Policy Statement (2009).

VIII. GENDER AND SOCIAL DIMENSIONS 54. The project is classified as some gender elements. The NSW system will address gender issues particularly in ensuring women’s equal representation and increased participation in numerous livelihood opportunities both as rank and file employees and entrepreneurs. The project will also support creating a women-friendly environment for applying permits and other trade-related documents, so they can efficiently and effectively use their time in managing both business and domestic responsibilities. For Output 2 implementation, at least 50% of female staff, in the relevant agencies report knowledge on NSW operations will be expected to attend activities related to capacity building. Female employees working for the relevant enterprises will be encouraged to attend awareness-raising program for traders prepared and implemented by CBRAs. 55. Gender and social dimensions monitoring. Program Management, Design and Supervision Consultant (PMDSC) and PMU will be tasked to monitor and evaluate the overall progress of the project of identified gender and development key initiatives. ADB will deploy a specialist to assist PMDSC and PMU in the review of poverty, social and gender dimensions of the project and whether targets are achieved. In addition, ADB’s Project Team will regularly coordinate with government counterparts.

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION

A. Project Design and Monitoring Framework

Impacts the Project is Aligned with

(i) Efficient international trade facilitation ensured (Maldives Economic Diversification Strategy)a

(ii) Faster, cheaper, and more predictable cross-border trade in the SASEC subregion achieved (SASEC Operational Plan, 2016–2025)b

Results Chain Performance Indicators with

Targets and Baselines Data Sources and

Reporting Mechanisms Risks

Outcome By 2024:

Efficiency in cargo clearance improved

a. Time spent from submission of export and import documentation requirements to clearance of cargo reduced by at least 10% (2018 baseline: 61

a-b. Reports prepared by NSW operator, project PMU staff and consultants

The NSW will be underutilized, and its benefits not fully realized, if the Parliament approval of the NSW

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hours [import] and 48 hours [export] based on Doing Business 2019).b b. At least 80% of cargoes requiring inspection by multiple CBRAs inspected and released jointly by the CBRAs (2018 baseline: Cargo inspection and release carried out separately by each CBRA)

legal framework is

delayed.

Outputs By 2023:

Changes in key positions and/or project champions could disrupt continuity of project implementation. Lengthy process of changing institutional and individual behaviors delays streamlined business process interface into the NSW system.

1. NSW system for international trade and reengineered trade processes established

1a. NSW system commissioned and maintained with at least 80% of service level standards achieved (2018 baseline: Not applicable)c 1b. Average number of data entries required from traders reduced by at least 40% (2018 baseline: 111 entries) 1c. At least 80% of business process reengineering recommended measures implemented (2018 baseline: Not applicable)

1a. Ministry of Economic Development report 1b. Reports prepared by project PMU staff and consultants 1c. Reports prepared by project PMU staff and consultants

2. Capacity of relevant agenciesd and private sector users, including women, to utilize the NSW developed

By 2022: 2a. NSW legal framework finalized and submitted to Parliament (2018 baseline: Draft legal framework prepared) By 2023: 2b. Business process errors reported by relevant agencies for supplier’s intervention kept at less than 10% per month (2018 baseline: Not applicable) 2c. Ease of using the NSW rated high by at least 75% of users (sex disaggregated) participating in survey (2018 baseline: Not applicable) 2d. Information-education-campaign plan developed and implemented with at least three women’s organizations/non-government organizations in inner and outer atolls (2018 baseline: Not applicable)

2a. Reports prepared by project PMU staff and consultants 2b. Ministry of Economic Development progress reports 2c. User satisfaction surveye

2d. Consultant’s report

3. High-level technologies to support NSW and

By 2021: 3a. E-payment and blockchain prototypes developed and pilot

3a. Consultant’s report

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CBRA = cross-border regulatory agency, NSW = national single window, Q = quarter, SASEC = South Asia Subregional Economic Cooperation, TA = technical assistance.

trade facilitation pilot testedf

tested with results and recommendations presented to key government officials and at least five private sector representatives (2018 baseline: Not applicable) 3b. Training program and a pool of trainers (with at least 80% eligible women) on e-payment and blockchain technologies developed in collaboration with at least one academic institution (2018 baseline: Not applicable)

3b. Seminar modules/ proceedings and post-training reports

Key Activities with Milestones 1. NSW system for international trade and reengineered trade processes established 1.1 Finalize application architecture (Q4 2018) 1.2 Fix specifications for NSW system (Q4 2018) 1.3 Tender for NSW system hardware and software (Q1 2019) 1.4 Set up NSW governance structure (Q1 2019) 1.5 Award a contract for NSW system hardware (Q2 2019) 1.6 Harmonize data (Q3 2019) 1.7 Finalize service-level agreements (Q1 2020) 1.8 Draft amendments to legal framework based on gap analysis completed (Q2 2021) 1.9 Align existing systems of the relevant agencies with streamlined processes (Q3 2021) 1.10 Pilot test NSW phase 1 (Q2 2020 to Q3 2020) 1.11 Go live with NSW phase 1 (Q4 2020) 1.12 Pilot test NSW phase 2 (Q4 2021–Q1 2022) 1.13 Go live with NSW phase 2 (Q1 2022) 2. Capacity of relevant agencies and private sector users, including women, to utilize the NSW developed 2.1 Prepare and implement change management strategy or plan (Q3 2019–Q4 2023)g

2.2 Prepare capacity development and awareness raising plan, including consultation with at least three women’s organizations (Q4 2019) 1.3 Implement capacity development and awareness-raising plan, including outreach targeting women

(Q1 2020–Q4 2023) 2.4 Set up help desk and provide gender-responsive communication training (Q2 2020) 3. High-level technologies to support NSW and trade facilitation pilot tested 3.1 Conduct feasibility studies of pilot testing of high-level technologies (Q2–Q3 2019) 3.2 Implement pilot test of high-level technologies (Q1–Q4 2020) 3.3 Organize knowledge capacity building workshop and conference for agencies related to NSW system (Q4 2020) 3.4 Prepare assessment of pilot testing results and system development plan (Q1 2021) Project Management Activities Set up project management unit (Q1 2019) Engage technical advisors (Q2 2019) Conduct users’ satisfaction survey (Q3 2020, Q1 2022, and Q1 2024) Conduct quarterly review missions and midterm review (Q2 2019–Q2 2024) Prepare project completion report (Q2 2024)

Inputs Asian Development Bank

Concessional ordinary capital resources: $5.0 million (loan) Asian Development Fund: $5.0 million (grant) Technical Assistance Special Fund (TASF 6): $0.5 million

Government of Maldives: $2.0 million High-Level Technology Fund: $0.5 million (TA grant)

Assumptions for Partner Financing Not applicable

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Notes: 1. No results framework indicator applies to this project. 2. Outputs 2 and 3 will be financed by the attached TA. a Government of Maldives, Ministry of Economic Development. 2013. Maldives Economic Diversification Strategy. Malé.

Impact statement will be updated as soon as the National Development Plan, currently being formulated with ADB assistance, is approved by the government.

b World Bank Group. 2018. Doing Business 2019: Reforming to Create Jobs. Washington, DC. c Time frame includes 2-year development of NSW and 3-year maintenance by the supplier. d Including CBRAs (Ministry of Economic Development; Ministry of Fisheries, Marine Resources and Agriculture;

Maldives Customs Service; Maldives Food and Drugs Authority; and the Ministry of Defense), Maldives Ports Limited, and Maldives Airport Company Limited. The NSW operator will either be a government entity (Maldives Customs Service) or a public entity (state-owned enterprise), to be determined by the government before loan and grant effectiveness.

e User satisfaction surveys will be conducted at least three times by ADB and the government: during pilot testing, 1 year after NSW rollout, and 6 months before project completion.

f The scope of the pilot testing will be determined by a feasibility study to be financed by ADB. 2011. Technical Assistance for Strengthening Knowledge-Driven Development in South Asia. Manila (TA 7997-REG).

g Change management will be implemented before and during project implementation, cutting across project outputs and stakeholders.

Source: Asian Development Bank.

B. Monitoring 56. Project performance monitoring. The PMU will establish a project performance management system using targets, indicators, assumptions, and risks in the project design and monitoring framework (DMF). An expanded DMF will be developed to serve as monitoring and evaluation framework taking into account important monitoring parameters in addition to those included in DMF. The PMU will prepare quarterly, mid-term and end of project monitoring reports using the same indicators and submit report to ADB. These quarterly reports will provide information necessary to update ADB's project performance reporting system. 57. Compliance monitoring. The PMDSC will support the PMU in monitoring performance based on the DMF and the project performance management system for the project. The PMU with support from PMDSC will prepare a quarterly progress report, which among other items, will include compliance of implementation with: (i) assurances, covenants, conditions; (ii) appraisal findings and revised design; and (iii) safeguards, etc. 58. Safeguards monitoring. Monitoring and reporting of the implementation on safeguards requirements and procedures will be prepared by the PMU. The PMU will undertake internal monitoring of safeguard covenants’ compliance to be included in the quarterly project progress report. C. Evaluation

59. The MOF, MED, MCS, MFDA, MFMRA, MOD, MPL, MACL, MMA and ADB will jointly review the project at least four times a year. This includes (i) the performance of the PMU and consultants; (ii) progress of each package and effective safeguards compliance, (iii) inclusion of women NSW implementation; (iv) compliance with grant/loan assurances; and (vi) assessment of project sustainability in technical and financial terms. D. Reporting

60. The MOF 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

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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.

E. Stakeholder Communication Strategy

61. The activities of outreach are included in the TOR of the capacity building consultant. The dissemination workshops and/or training seminars will be organized for the potential users. The users of the NSW system are the people both in public and private sector involved in the international trade. All communication will be in language suitable for the target audience and will follow ADB’s Public Communication Policy 2011.

X. ANTICORRUPTION POLICY 62. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project.18 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.19 63. To support these efforts, relevant provisions are included in the grant/loan agreement and regulations and the bidding documents for the project. The government, the executing agency and the implementing agencies are advised of the ADB’s Anticorruption Policy (1998, as amended to date). Consistent with its commitment to good governance, accountability and transparency, implementation of the projects under the project will adhere to ADB’s Anticorruption Policy.

XI. ACCOUNTABILITY MECHANISM 64. 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.20

XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL

65. All revisions and/or updates to PAM during the course of implementation should be retained in this section to provide a chronological history of changes to implemented arrangements recorded in the PAM, including revision to contract awards and disbursement s-curves.

18 Anticorruption Policy: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 19 ADB's Integrity Office web site: http://www.adb.org/integrity/unit.asp 20 Accountability Mechanism. http://www.adb.org/Accountability-Mechanism/default.asp.