Risks Related to Delays

Monthly Progress Report November 2016 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 November 2016 are as follows: a The big negative slippage behind schedule of two 2 on-going construction sub- projects, Packages 13 and 15. b Delayed issuance of Notice to proceed will affect the twenty one 21 months time of completion of Contract Package 16. The completion date will keep on stretching farther beyond the expiry date of the loan agreement on December 31, 2017. c LARAP implementation for Packages 05, 12, 13, 14, 15, and 17 cannot be completed in FY 2016 and splitzing program for land acquisition in the provinces of Lampung, Bengkulu, and North Sumatra is still not budgeted d Amendment to the extension of the implementation time and increase the contract value for Package 05 should follow the direction of WB in accordance with the letter ref.WINRIP 364 dated November 23, 2016 e The contract agreement for Package 03 Manggopoh-Padang sawah has not been amended related to the calculation of the final quantity of the works. f Land acquisition of Package 15 Sibolga-Batas Tapsel obstacles along the 4 km for the people in the village of Pinang Baru - Pinangsori sub district not willing acquisited g Changes in the design of pavement widening from flexible to rigid pavement in Package 15 is not supported by the consent of the DGH. h Commencement of work of the Technical Assistance for Development of Slope Stabilization, Design Management estimated April 2017 with a 11 month time for services going beyond the loan closing date i If the cancellation of Package 10 Sp.Empat-Sp.Air Balam impact on the reduction of loan allocation for Civil Works, then, civil works loan allocation is not sufficient to finance 18 civil works packages including variation orders for Package 05 and 17 and the Price Adjustment for 18 packages of civil works. j There is a road damage due to water scouring on the side ditch Package 03 Manggopoh-Padang Sawah k Roads damaged by settlement land slide in the Sta 6+300 and Sta 6+400 Package 01 Krui-Biha have not been repaired l Production of crushed stone tends to form a flaky and elongated beyond the requirements of 10 allowed in the specification.

7.2 Actions Required

a Two 2 of the on-going construction packages are on critical situation due to big negative progress slippages which may affect the timely completion of the projects. Design Supervision Consultant DSC shall closely monitor, preferably on a weekly basis. Contractors shall prepare a Catch-Up Schedule on how to complete the remaining works within the contract time. High level management meeting have been conducted on November 21, 2016 in the DGH office. b Currently, the contractor is doing staking out and field engineering to determine the condition of the existing road. Once the field engineering is completed, the contractor will submit alternative proposals for completion of the project.