Project Risks and Mitigation Measures

Monthly Progress Report April 2015 Western I ndonesia National Roads I mprovement Project 7 - 1 7 ISSUES and RECOMMENDATIONS

7.1 Current Situation

The main issues during this month of April 2015 are as follows: a The slow progress of procurement proceedings for the remaining eight 8 packages. b The big negative slippage behind schedule of three 3 on-going construction sub- projects. c Issuance of Notice To Proceed to commence works for Package No.5 Sp. Rampa Poriaha. d Delayed land acquisition and compensation payments of Project Affected People PAP in two 2 sub-projects. There are 2,564 affected people in Package 13 Sp. Rukis Tj.Kemuning and in Package 17 Sp. Gunung Kemala Pugung Tampak 1,885 persons are affected. Contract Agreements between GOI and the two 2 winning bidders have already been signed, but Notice To Proceed NTP to commence the works cannot be issued due to the uncleared Right of Ways ROW. e Delayed action in processing the justification of the Field Engineering for the three 3 on- going construction packages Packages 2, 3 and 4 f Delayed approval of sub-structure design revision of Air Gadang Bridge on Package No.2.

7.2 Actions Required

a The main cause of the delay in procurement is attributed to the slow processing of DED drawings and associated bidding documents. To minimize or totally eliminate the delays in securing Bank s concurrence and issuance of No Objection Letter NOL, special meeting shall be held regularly among all concerned to discuss solution to expedite the availability of the documents. b Three 3 of the four 4 on-going construction packages were on critical stage due to big negative progress slippages. To be on schedule or reduce the negative slippage to a manageable level, Design Supervision Consultant DSC shall closely monitor, preferably on a weekly basis, the Contractors progress output. Contractors shall prepare a Catch- Up Schedule on how to complete the remaining works within available contract time left. The situation is too alarming due to the huge value of remaining works that are still to be done with just only very limited of the contract time left. c Issuance of Notice to Proceed to commence works shall be issued as soon as possible. d Concerned authorities in the acquisition of the road right of way shall expedite the process with the intervention of DGH to accelerate the LARAP implementation. We suggest that the compensation payment scheme shall be scheduled or concentrated in a continuous strip leaving no unsettled affected area along the stretch in order to attain a substantial stretch of fully cleared Right of Ways ROW and a strip map shall be prepared for any substantially completed stretch. In the event that there is already an available substantially cleared length of the road, a request letter shall be written to the World Bank to interpose no objection to a partial or sectional turnover of the stretch of the road to the Contractor. Monthly Progress Report April 2015 Western I ndonesia National Roads I mprovement Project 7 - 2 e DSC and Contractors shall constantly follow-up with the authorities concerned the early approval of the Field Engineering. To date, only one 1 Field Engineering had been finalized and approved. f Concerned authorities shall expedite the approval in order construction can proceed as the target date of completion Contract Package No.2 is getting nearer. Monthly Progress Report April 2015 Western I ndonesia National Roads I mprovement Project 8 - 1 8 CORRESPONDENCES During the period the CTC received and issued letters. Lists of letters received and issued are shown in Appendix J.