WINRIP DOC PIP Project Implementation Plan 20120320 00216

MINISTRY OF PUBLIC WORKS

DIRECTORATE GENERAL OF HIGHWASYS

PROJECT IMPLEMENTATION PLAN

(PIP)

WESTERN INDONESIA NATIONAL ROADS

IMPROVEMENT PROJECT

(

WINRIP)

IBRD Loan No.8043-ID

PROJECT IMPLEMENTATION PLAN (PIP) FOR THE IBRD ASSISTED

WESTERN INDONESIA NATIONAL ROAD IMPROVEMENT PROJECT

(WINRIP)

1.

THE PROJECT

1.1

Background

The Government of Indonesia wishes to continue the strengthening of the National Road system in Indonesia. The Western Indonesia National Road Improvement Project (WINRIP) will support a program of National road and bridge improvement works in the Sumatra region of Indonesia. The focus of WINRIP will be roads administered directly by the National Government, including those currently classified as Provincial, Kabupaten (District) or non-status roads and which are in process of being reclassified as National roads. This network totals some 10,000 km in length. In addition, provision will be made for major bridge repair works, rehabilitation, duplication and replacement as necessary to complement the road betterment works.

The Eastern Indonesia National Roads Improvement Project (EINRIP) assisted by AusAID through the Australian Indonesia Partnership (AIP), is providing similar support for National Roads in Eastern Indonesia.

1.2

Project Objectives

The main objective of the program will be to increase the effective use of selected sections of National roads along the Western Sumatra Corridor by reducing road user costs, through improving the National road network especially in 4 (four) Provinces of Sumatra (North Sumatera, West Sumatera, Bengkulu and Lampung) and, where desirable, raise the road standard to that set by the Directorate General of Highways. This will contribute significantly to ensuring that the National road network in the region provides acceptable standards of service and accessibility, and is capable of supporting local and regional economic development.

1.3

Project Content and Timing

The works to be supported under the IBRD assisted component of WINRIP concentrate mainly on road betterment, road capacity expansion, and bridge replacement repair or duplication for that part of the National network located along the Western corridor of Sumatera

During preparation of the Project, consideration was given to the need for developing the main road corridors, particularly those parts which are in poor condition or below target standard in terms of geometry. Thus the following works needs were identified:

• Betterment treatments including minor widening,

• Bridge replacement, duplication, rehabilitation, widening or major repair as required for bridges associated with road links for which betterment treatments have been identified or otherwise are of high priority,

IBRD Loan No.8043-ID

Project preparation, including all feasibility studies and final engineering design of identified works, was initially funded by Grant Funds from the PHRD financing facility and latterly by Australian Trust Funds. Project Preparation Consultants (PPC), were appointed in December, 2007 to assist the DGH with full project identification and preparation, and with the final engineering design of all road and bridge sub-projects for commencement in the first 12 months of WINRIP implementation. The original WINRIP PPC Contract concluded their provision of services at the end of October, 2009. Additional WINRIP-related activities were undertaken between 1 May 2010 and 31 August 2010.

The WINRIP Loan will provide funding assistance for civil works. It will also provide for Technical Assistance (TA) during project implementation to assist DGH by way of Core Team Consultants (CTC), Design and Supervision Consultants (DSC) and other TA Services for for road sector institutional development and contingency for disaster risk response.

For reference purposes, separate batches of projects will be prepared and implemented. These batches of projects are termed Annual Work Programs (AWPs) in line with terminology used in other Bina Marga projects. They are not in fact “annual” programs as such but rather a series of multi-year programs, each commencing in consecutive years. Hence, it will called as just Work Programs (WPs). It is expected that implementation of the first Works Program (WP 1) will commence in the middle of 2012 and be completed by mid / late 2014. The second Work Program (WP 2) is expected to commence in early 2014 and be completed by late 2015 or middle 2016. The third Work Program (WP 3) is expected to commence in early 2015 and be completed by mid 2017. The loan will be closed on

December 2017.

1.4

Project Preparation

1.4.1 Approach to Project Planning and Identification

A detailed process of identification, prioritisation and selection of sub-projects for inclusion in the project has been undertaken in formulating the project content for WINRIP. In summary, this involved a hierarchical search process, with a number of discrete steps:

• A network screening study of national road betterment needs for the whole of the WINRIP Region, which was conducted mainly using the Integrated Indonesian Road Management System (IRMS) database;

• Identification of major road corridors;

• Review of DGH and regional priorities for road improvement;

• Selection, prioritisation and programming of projects, particularly taking into account economic viability, possible needs for land acquisition, or further environmental and social impact assessment;

• Post-design review of economic viability.

For the first year work program, it was necessary to identify projects which can be readily implemented and which could be prepared quickly. In particular, sub-projects requiring major land acquisition or detailed environmental/social impact assessment which cannot be completed before end-2010 have been deferred until later in the project. Also, sub-projects for which some Detailed Engineering Design had been prepared by, or for the P2JJ, were accorded a degree of preference for inclusion in WP 1.

IBRD Loan No.8043-ID

1.4.2 Selection of Sub-projects

All sub-projects are required to satisfy economic evaluation criteria and environmental and social safeguards, as summarised below:

Economic evaluation: In general sub-projects with an estimated EIRR ≤ 15 % were considered for inclusion in the WINRIP. However, other projects considered to be of high priority for social and strategic reasons have also been included. For the IBRD-assisted component, only sub-projects with an EIRR in excess of 15% were included.

Environmental Safeguards: It was agreed from the outset of the project that the Environmental and Social Safeguards would be those used for funding by the World Bank. The Environmental and Social Safeguards (ESS) prepared and agreed for the project are included as Annex 4.

Thus, all environmental and social screening and assessment procedures will be undertaken according to the requirements of the ESS, using guiding procedures and key specifications from:

• World Bank OP4.01 “Environmental Assessment” and related provisions;

• Related GOI regulations and DGH Guidelines.

Social Safeguards: Social safeguards have been established as part of a Land Acquisition and Resettlement Framework (LARF), based on World Bank OP 4.12, as set out in Part II of Annex 4.

Whether a Simplified Land Acquisition and Resettlement Action Plan (SLARAP) or a full Land Acquisition and Resettlement Action Plan (LARAP) is required depends on the numbers of persons affected by the project. Threshold numbers are set out in Annex 4. The presence of any affected indigenous or vulnerable people may trigger the requirement for an Indigenous and Vulnerable Peoples’ Development Plan

All candidate sub-projects have been reviewed for compliance with the requirements of the ESS, using the procedures summarised in Annex 4.

The environmental and social screening process identifies:

• Those sub-projects with significant environmental or social impacts requiring further preparation of an AMDAL1 or full LARAP, as well as further investigation as required by the World Bank, before they can be considered for implementation;

• Those sub-projects with minor environmental or social impacts, requiring preparation of Environmental Management and Monitoring Plans (UKL/UPL) or SLARAP, and Social Impact Assessment (SIA);

• Those sub-projects for which no further environmental preparation is required, need only Standard Operating Procedures (SOP) or Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan (SPPL)

1

IBRD Loan No.8043-ID

1.5

Project Description

The IBRD Loan amount is US$250 million. The Project is intended to finance a part of the DGH investment program for national roads with a particular focus on the Western corridor of Sumatra. The corridor is one of the three main corridors in Sumatra and connects the city of Padang (with a population of around one million) to major towns along the west coast (Bukittinggi, Sibolga and Bengkulu). It also connects through connector roads on the West coast to Medan in the northeast and to Pekanbaru in the center of the island. The project has four components:

1.5.1. Project Component 1: Betterment2 and Capacity Expansion of National Roads (US$314.9 million).

This will cover three work programs of betterment and capacity expansion of approximately 715.6 km including replacement of 194 meters of bridges.

This civil works program will be executed in three Work Programs (WP), as summarized in

Table 1.1. The table shows the IBRD assisted scope and costs of civil works at estimated current (year of implementation) prices, excluding taxes.

Table 1.1 : Proposed Physical Works by Program Type of Works

WP 1 WP 2 WP 3

Km US$

mn

Km US$

mn

Km US$ mn

Road Betterment - - 53.10 22.77 - -

Capacity Expansion 137.10 79.70 314.60 127.67 207.60 74.58

Bridge works 0.100 1.94 - - 0.08 2.06

TOTAL (excluding tax @ current prices)

137.20 81.64 367.70 150.45 207.68 76.65

* Contingency costs not included - ** including 194 meters of bridges

The first Works Program (WP 1) will be started in middle/end 2012, and funds are included in the 2012 budget.

Table 1.2 presents details of the First Works Program (WP 1). Apart from minor temporary land acquisitions for bridge works at two sites, no projects require land acquisition. Also, there are no outstanding environmental or social issues which require studies to be completed. Thus, there are no foreseeable impediments to implementation.

Table 1.2 : IBRD Assisted WRIP Civil Work AWP-1

No Province Link No. Link Name Cl a ss R o a d T y p e

Road Works Bridge Works Total Cost

F rom To L eng th T rea t-m ent C o st ( 2 0 1 0 )

No Leng

th C o st ( 2 0 1 0 ) 2 0 1 0 p ri ce s A ccu m

km km Km Rp mn m Rp mn Rp mn US$ mn

2

In Indonesia, “betterment” typically involves the base course strengthening, minor widening, providing a new asphalt wearing course, and improving drainage. In most cases, the road already has

IBRD Loan No.8043-ID

1 Lampung 053.0 Krui –

Biha K1 IU 221,5 246,5 25,0 Bmnt to 7 m.

148.66

8 148.668 16.52

2 West

Sumatra 047.2 Padang Sawa – Simpang Empat

K1 IU 0,0 40,9 40,9 Bmnt to 7 m.

189.81

0 189.810 21.09

2a West

Sumatra 34.1 Air Gadang Bridge

K1 IU New

Bridge 1 100 17.580 17.580 1/95

3 West

Sumatra 047.1 Manggop oh – Padang Sawah

K1 IU 102,2 134,2 32,0 Bmnt to 7 m.

152.43

5 152.435 16.94

5 Bengkulu 015.3 Ipuh -

Bantal K1 IU

0,0 49.7 49.7 Bmnt to 7 m.

226.27

5 226.275 25.14

It will be noted that all road sub-projects have been subject to economic appraisal and have

estimated Economic Internal Rates of Return (EIRR) in excess of 15%. These were selected for inclusion and are subject to completion of environmental and social screening, to confirm that there is no land acquisition or resettlement requirements remain outstanding. Final Engineering Designs, Engineer’s Estimates and bidding documents have been completed for all projects proposed for WP 1.

Sub-projects to be included in WP 2 and WP 3 have also been determined. They are listed in

Annex 1. Final Engineering Designs and Engineer’s Estimates for all WP 2 and WP 3 proposed works require preparation or finalization. In the cases of some projects, preliminary Engineering Designs were prepared during Project preparation which will require review and possible amendment by the Design and Supervision Consultant prior to procurement. The costs presented in Table 1.1 and Annex 1 are planning estimates only, and the overall scope and contents of WP 2 and WP 3 may need to be revised as and when revised costs and budgets are determined.

The following maps show:

Map 1: Map showing the WINRIP Region on the Island of Sumatera. Map 2: Location of WINRIP works packages in North Sumatera Map 3: Location of WINRIP works packages in West Sumatera Map 4: Location of WINRIP works packages in Bengkulu. Map 5: Location of WINRIP works packages in Lampung

IBRD Loan No.8043-ID

IBRD Loan No.8043-ID

IBRD Loan No.8043-ID

IBRD Loan No.8043-ID

1.5.2. Project Component 2 : Implementation Support (US$16.0 million).

This component provides consulting services to support project management and implementation so as to ensure implementation efficiency and overall quality of the works. It also includes funds for a small amount of training of DGH staff and for incremental operating costs for the project. This will provide support to the MPW for the implementation of the civil works, including: (a) provision of Core Team Consultants (CTC),

Design and Supervision Consultants (DSC) and road safety audits; (b) Project management support and technical audits. This is directly related to the implementation of the civil works and covers consulting services for design and supervision of the civil works in Component 1; management support and technical audits to help improve the quality of construction and support to governance improvements during procurement and implementation; and a series of systematic road safety audits of road designs for all project roads in Component 1. This is to ensure compliance with road safety standards and regulations, identify road hazards and undertake remedial treatments for safety improvements.

Project Management Core Team Consultants (CTC). The CTC will provide support to the PMU and DGH in the management of the Project, based in Jakarta. Their tasks include financial and progress monitoring and reporting, information management and dissemination, quality assurance and performance review for the Design and Supervision Consultants, implementation and monitoring of the anti-corruption action plan, support for project monitoring and evaluation, and support for implementation of a training program to support project management and implementation. Outline scope of services and estimated resources required by the CTC are included in Annex 2 to this PIP.

The CTC Team will also include Procurement Specialist, who will provide support to the Bina Marga Project Managers and Procurement Committees (POKJA), to help ensure that procurement and award decisions are undertaken in such a way as to avoid collusive and fraudulent practices. The team will be based in Jakarta, but will spend extended periods of time in delivering the services in the Provincial Satker offices.

Design and Supervision Consultants (DSC). A Design and Supervision Consultant (DSC) will be responsible for design of WP 2 and WP 3 civil works and supervision of all civil works. They will have the role of ‘Engineer’ under a FIDIC-type contract. The tasks include the preparation and maintenance of a quality assurance plan, validation and updating of designs, supervision of all civil works, environmental and social monitoring and management, and support for financial and progress monitoring and reporting. The DSC will also be responsible for quality assurance of materials and workmanship, certifying whether or not contractors have achieved the required results, as well as documentation and reporting based on the financial management plan. They will prepare a Quality Assurance system covering all subprojects, and continuously monitor the effectiveness of their supervision procedures. The team will be contracted and managed by DGH through the Bina Marga Regional Office (Balai II), and will be based in Padang, West Sumatra. Outline scope of services and estimated resources required by the DSC are included in Annex 2 to this PIP.

Interim Arrangements for WP 1. In the period before the CTC is mobilized, since Project Preparation Consultants had been demobilized, an individual consultant subject to agreed on resources - will provide advisory support to procurement committees for the procurement of civil works.

Incremental Operating Costs. This sub-component will provide for operational costs which would not have been incurred without the project, by DGH’s Project Management Unit (PMU) and units implementing the project components at Central and Provincial level. It excludes Government staff salaries and allowances. Eligible items will be detailed in the Project Management Manual and will include staff travel and per diem allowances, communications, consumables, web page operation and maintenance (assisted by CTC staff), advertisement of bidding, printing and publication of Project information, rental of meeting facilities and payments for specific output-related services.

1.5.3. Project Component 3: Road Sector Institutional Development (US$1.0 million).

This will provide technical assistance and support to strengthen disaster risk mitigation in the road sector, including capacity building support for the new environment/risk mitigation and road safety unit of DGH to conduct disaster risk assessments and planning, risk mapping of land-slides, coastal erosion, earthquake and floods, and analysis of alternative designs for road segments that pass through critical environmental assets and vulnerable areas.

1.5.4.Project Component 4: Contingency for Disaster Risk Response ($0).

This will provide preparedness and rapid response to disaster, emergency and/or catastrophic events as needed. This provisional zero dollar component will be added under this project to allow for rapid reallocation of loan proceeds from other components under streamlined procurement and disbursement procedures.

1.6

Project Cost

The summary of project cost by category of expenditure is given in Table 1.3 below. Table 1: Proposed Project Cost by Components (US$ million)

No Component

Estimated Project Cost

Estimated GOI Share

Estimated IBRD Share

1

Betterment and Capacity Expansion of

National Roads 2 314.9 94.51 220.41

(a) WP-1 Civil Works Program 81.64 24.49 57.15

(b) WP-2 Civil Works Program 150.46 45.14 105.32

(c) WP-3 Civil Works Program 76.64 22.99 53.65

(d) Contingency 6.17 1.85 4.32

2 Implementation Support 16.00 0 16.00

(a) Core Team Consultant 5 0 5

(b) Design and Supervision Consultant 10 0 10

(c) Incremental Operating Costs

including technical audits 1 0 1

3 Road Sector Institutional Development 1.00 0 1.00

Capacity Building for DGH Environment/Risk Mitigation and

Road Safety Unit 1.00 0 1.00

4 Contingency for Disaster Risk

Response3 0 0 0

5 Unallocated 4 18.1 5.5 12.6

TOTAL 350.0 100.0 250.0

1/ The cost share is 70% IBRD and 30% GOI for component 1 and 100% IBRD for component 2, 3 and 4.

2/ Costs exclude cost of land acquisition and resettlement as well as taxes which are funded directly by the Government.

3/ Contingency for Disaster Risk Response will be kept zero while the Government can utilize project budget for rapid response with agreed conditions subject to reallocation or additional finance later.

1.7

Project Rationale and Benefits

1.7.1 Lessons Learned from Previous Projects

Recent Projects in DGH have provided examples of good performance to be emulated and poor performance to be addressed and corrected. The World Bank’s Implementation Completion Report for Eastern Indonesia Region Transport Project (EIRTP)-1, Eastern Indonesia Region Transport Project (EIRTP)-2 AND on going program Strategic Roads Infrastructure Project (SRIP) evaluated the performance of DGH and its Project Management Unit as “Satisfactory”. Specific comments were as follows:

i. Readiness for Implementation. The experience in Indonesia of past and ongoing roads projects shows that implementation delays were mostly caused by slow procurement processes. In the Strategic Roads Infrastructure Project (SRIP), the most similar project to WINRIP that is still ongoing, delays in the engagement of consulting services was the main cause of overall implementation delays. The same problem was encountered in the preparation of WINRIP with delays in contracting the preparation/design consultant. Although the part of the problem related to the size and composition of procurement committees has been addressed at a systemic level through the Infrastructure Development Policy Loan (IDPL) series, delays in the procurement of consultant contracts persist. Timely engagement of the implementation support consulting services is the most critical issue to confirm the readiness for implementation. As such, preparation of the Request for Proposal package for these services must begin early to ensure the requisite consulting services are in place in a timely manner.

ii. Quality of Engineering Designs. In the past, there have been some concerns over the poor quality of engineering designs because road sections were bid based on “final designs” that were less than full detailed engineering designs. The professional review of engineering designs introduced in SRIP has improved the quality of design, and will continue in WINRIP. The detailed engineering designs for WINRIP are to meet the same quality standards and specifications, in terms of detailed content and presentation, as those recently prepared for the Eastern Indonesia National Roads Improvement Project (EINRIP).

iii. Quality of Construction. The quality of works has been an issue in past projects, but largely improved in SRIP by (a) designation of the Design and Supervision Consultants as the “Engineer”, and (b) implementation of the enhanced monitoring aspects of the Anti-Corruption Action Plan. In addition to these improvements, WINRIP quality assurance measures will be strengthened through a system of enhanced independent technical audits, over and above those included in other projects.

iv. Governance Enhancement. Past projects in Indonesia and elsewhere have shown that anti-corruption strategies that rely on either the addition of multiple layers of review and/or the bypassing of governmental processes are often unsuccessful. Approaches that address systemic problems in government systems and enhance transparency are often more successful and sustainable. This Project would explore the use of computerized reporting and tracking systems, e-procurement and a well managed complaints handling mechanism for mitigating procurement related corruption and collusion risks.

supervision and increase oversight costs. WINRIP adopted a corridor approach, whereby segments are grouped and located in sequence, thereby easing technical supervision and third party monitoring.

For WINRIP the design and design checking processes have been strengthened. A comprehensive Design Specification, and Final Engineering Design and preparation of associated Bidding Documents for WP 1 is being undertaken directly by the Project Preparation Consultants (PPC). The implementation arrangements have been clarified to enable the consulting engineers in civil works contracts to have clearer authority and responsibility and thus improve accountability for approving and paying for completed works. Monitoring of the effectiveness of supervision procedures will be undertaken by the DSC and overseen by the CTC. Technical audits will also address quality of work issues, and will be used to verify the adequacy of all works. The Project Management Manual is prepared in separated document ready for WINRIP implementation.

1.7.2 Benefits and Target Population

Project beneficiaries will be road users in participating provinces, districts and towns in the four provinces included in the WINRIP region (North Sumatra, West Sumatra, Bengkulu and Lampung). Direct beneficiaries of the project include people who live in the vicinity of the project area who directly benefit from the improvement of the road sections financed by the project. The project road sections traverse 12 districts3 _{with a total population of more than}

4 million4of which around half are women. In addition, the betterment and maintenance of roads will create employment for people.

i. Improved road conditions and connectivity between major centers and modes of transport will lower transport costs for passengers and freight. This will reduce the cost to local industries and of inputs to local agriculture, and the cost of transporting products to markets, and provide a significant stimulus to regional economic development;

ii. Improved transport services in the provinces concerned will have a significant impact throughout Sumatra, given that the road improvements are to the main arterial roads on the island. Indirectly the benefits will impact on isolated communities with low income populations. Improved roads and accessibility will increase access to jobs, health, social and educational facilities in disadvantaged rural areas as well as in the administrative, economic and social centres.

iii. The project will strengthen the ability of central and regional based road networks management units to manage the road and bridge assets for which they are responsible. The project's emphasis on transparency and accountability will impact on governance in all areas.

1.7.3 Project Economic Evaluation

An economic evaluation has been undertaken of almost all civil road work components. Nearly all projects proposed for inclusion in WINRIP have an EIRR greater than 15%: this being the normal minimum required. The few projects/corridor links which do not meet the

3

Lampung Barat, Pasaman, Pasaman Barat, Agam, Mokomuko, Tapanuli Tengah, Pesisir Selatan, Padang Pariaman, Tanggamus, Bengkulu Selatan, Bengkulu Utara, Lampat Barat.

4

2010 population estimated using the 2000 population census and an annual population growth rate of 1.136%

15% EIRR standard are justified by additional criteria, including broader socio-economic and development benefits. Many road sub-projects have EIRRs well above the minimum indicating urgency for implementation for economic efficiency. Annex 3 provides details of the economic evaluation for the road works, the largest component of the project. Economic evaluations have not been carried out for bridge works. These works have been selected for reasons of necessity to replace ailing existing bridges or provide bridge capacity compatible with the associated road works.

1.8

Environmental and Social Safeguards

1.8.1 Environmental Safeguards

GoI environmental safeguards for WINRIP are based on the Environment Impact Assessment System (AMDAL) as mandated by various laws and regulations. Annex 4 details the Environmental and Social Management Framework (ESMF) / Environmental and Social Safeguards (ESS) adopted for WINRIP.

All proposed WINRIP subprojects are subject to environmental impact screening (Figure A4-1, Annex 4) to identify one of three treatments: i) basic environmental clauses, ii) an environmental mitigation and monitoring plan (UKL/UPL) report or iii) a full EIA (AMDAL). Processes ii) and iii) must include an examination of potential impacts on the biophysical, socio-cultural and built environment,. The extent of the social impact in terms of land acquisition and resettlement has an impact on an ANDAL only when land acquisition extends to more than 30 hectares outside the RoW for inter-urban roads, 10 hectares for medium size cities and 5 hectares for big size cities. In such cases a full AMDAL is triggered.

Mitigation and monitoring measures must be provided for all impacts not complying with GoI regulations and standards.

Projects which are identifed as potentially generating significant environmental impacts require a full Environmental Assessment (AMDAL). This large field study will identify whether the project as designed can proceed, and the mitigation measures needed to be included. Projects triggering an AMDAL require referral to the World Bank, and additional study may be required to satisfy their requirements.

1.8.2 Joint Application of GoI and World Bank Environment Safeguards

All sub-projects will be screened according to the World Bank exclusion and referral procedures and, if cleared, be subject to the GoI screening steps defined in Figures A.4-1 and A4.2. The World Bank clearing process will be invoked only for projects that require full environmental assessment and for which World Bank funding assistance is directly involved. For all projects clearing the World Bank screening process and not requiring any additional environmental studies, based on Figures A.4.1 and A4.2, a set of Standard Operational Procedures (SOPs) / Standard Environmental Clauses (SECs) will be included in the bid/contract documents. For some works, a further set of Special Environmental Clauses (SpECs) may be added to emphasize potentially problematic conditions that warranted the UKL/UPL review. For these subprojects, the UKL/UPL report will specify the Environmental Mitigation and Monitoring Plans and the SECs to be embodied in the works contract.

1.8.3 Social Safeguards

The GOI and the World Bank have agreed to apply the Work Bank’s OP 4.12 and based on that a Land Acquisition and Resettlement Planning Framework (LARF) has been prepared. The LARF defines conditions under which project-affected-people and households are identified and categorized, how compensation is established and distributed, and how follow-up monitoring is to be undertaken. Current GoI regulations (Presidential Proclamation No. 65 2006; Perpres No 65/2006) regarding land acquisition and compensation will be used in cases where the Framework provides less specific instructions and where Indonesian laws must be applied.

The WINRIP process as defined in the LARF requires that either a full Land Acquisition and Resettlement Plan (LARAP) or an Abbreviated LARAP (A_LARAP) be completed whenever there are people who lose their property or fixed assets. Specifically, if ≥ 40 households or ≥ 200 people are affected, and if any minority or vulnerable people are affected a LARAP is needed. If < 40 households or < 200 people are affected an SLARAP is to be undertaken5. In the event that land acquisition takes place for any subproject within 2 years of the start of any proposed WINRIP LARAP exercise, all relevant data on land acquisition must be provided to DGH and a Tracer Study conducted. This includes a description of the process applied, its schedule, compensation process and entitlement data, amount of land acquired, location and number of HH or individuals compensated, the amounts provided and a complete list of all those compensated (usually available in tabular form). The CTC, on behalf of DGH will then conduct a “tracer study”, including interviewing a sample of project-affected-people (PAPs) to independently certify for the Government of Indonesia and the World Bank that the LARAP process was completed fairly and credibly.

All A_LARAPs, while prepared by the DSC, will have primarily Kabupaten-level involvement. For LARAPs the provincial BAPPEDA’s and related local governments where the subprojects are located will be directly involved in implementing this process, and in forming a Land Acquisition Committee (LAC) as defined in Perpres No. 36/2005, which will govern all entitlement and grievance issues, plus oversee the compensation. It is likely that a local NGO or university will be involved as independent compliance monitors.

Should any proposed WINRIP subprojects involve construction along existing national roads and bridges in areas where indigenous people live and where either land or fixed assets are at risk, an Indigenous People’s Development Plan will be prepared, as defined in the World Bank Framework. Guidance will be sought from the Indonesian Department of Social Affairs (Kementerian Sosial) and all relevant GoI laws and regulations will be referenced.

1.8.4 Environmental and Social Safeguards Due Diligence

All project-specific environmental and social studies completed as part of the safeguards process will be subject to a due diligence audit by the CTC, with output submitted to Government of Indonesia for onward submission to the World Bank, as part of the overall project approvals process. Projects will not move forward to implementation until both environmental and social safeguard requirements have been met.

5

1.8.5 Health and Safety

The Project will involve a number of construction workers who will be living in base camps along the project corridors. To mitigate the risk of HIV/AIDS transmission, the construction contracts include clauses requiring contractors to allow their workers to attend education sessions where HIV/AIDS awareness brochures and condoms will be distributed. This is a standard provision in the Standard Bidding Documents used for the works and agreed between Multilateral Development Banks and FIDIC. This is a small targeted activity, using existing materials, where the DGH will invite the relevant local health department and/or non-governmental organizations to provide services such as an initial information session, and one or two follow up meetings during contract execution. This activity will be carried out and financed through the contracts – Design and Supervision Consultant (DSC) - and will be targeted to Works all contracts. DGH coordinates on this aspect with the Ministry of Health. DGH will contract with an “approved service provider” to provide the prevention service under the project. This will be monitored by DGH/PMU with the assistance of the DGH/environmental and Road Safety Sub Directorate (DTA). The cost of this is included as “provisional sum” in DSC contract.

2.

INSTITUTIONAL

The institutional arrangements for implementation and management of WINRIP will be adapted and improved from that for EIRTP-1, and on going program SRIP, which was designed for National and Provincial programs. The overall Project Organisation is shown in

Figure 2.1, and particular aspects are reviewed in this section.

2.1

Organisations Responsible for Project Implementation

An inter-agency Steering Committee chaired by BAPPENAS’ Deputy for Production, Trade and Infrastructure and including representatives from the Ministry of Finance (MoF), and Ministry of Public Works (MPW) is responsible for facilitation of coordination among the Ministries for the purposes of Project implementation. DGH within MPW is the Executing Agency (EA) for the Project. The Steering Committee will have a Secretariat chaired by the Director of Transportation, Bappenas with members appointed from the implementing agency within the Directorate General of Highways as well as the Bureau of Planning and International Cooperation of the Secretariat General, Ministry of Public Works.

The Central Government working group consists of DGH as the Executing Agency and the Bureau of Planning and International Cooperation of the Secretariat General, representing the Ministry of Public Works. DGH is represented by the Directorate of Planning, Directorate of Technical Affairs, and the Directorate of Implementation Affairs Region I and the Balai (Implementation Regional Office)..

The project organisation for implementation of civil works in Non-Metropolitan areas is shown in Figure 2.1.

2.1. PROJECT ORGANIZATION STRUCTURE

DIRECTORATE OF IMPLEMENTATION

REGION I, DGH DIRECTORATE

OF PLANNING, DGH DIRECTORATE

OF TECHNICAL AFFAIRS, DGH

WESTERN INDONESIA ROAD IMPROVEMENT PROJECT

(WINRIP)

PMU

DINAS

WORLD

BANK GOVERNOR

CTC DSC

(Engineer)

SATKER/PPK

Civil Work

SATKER

Design Supervision

BALAI

Regional Office

Coordination Command

MINISTRY OF FINANCE BAPPENAS

MINISTRY OF PUBLIC WORKS

DIRECTORATE GENERAL OF HIGHWAYS EXECUTING AGENCY

The proposed roles and responsibilities of government agencies and implementation support services for WINRIP implementation are summarised in Table 2.1.

Table 2.1: Summary of Roles and Responsibilities for WINRIP Implementation

Agency/Position Role Responsibilities

Minister of Public Works

Oversee Executing Agency

Approve contracts over Rp. 50 billion Oversee budgets and evaluate progress of Loan absorption (through Biro PKLN) Director General

of Highways (DGH)

Executing Agency Approve contracts up to Rp. 50 billion Approve contract variations involving price increases

Issue Project Management Manual DGH Directorate

of Planning (Dit Bipram)

Planning, programming of subprojects, packaging Manage PMU

Manage procurement, implementation of CTC

Budget for all Project activities

Establish, direct and supervise the Project Management Unit (PMU)

Manage CTC contract (financial) through Bipram’s Work Unit (Satker)

Manage procurement of PMU equipment DGH Directorate

of Technical Affairs (Dit Bintek)

Establish technical standards

Approve designs for Non-Metropolitan roads / bridges

Manage technical audit

Manage environmental aspects for all road / bridge works

Approve design standards, standard bidding documents and specifications for all road / bridge works

Approve designs for Non-Metropolitan roads/bridges

Manage procurement of steel bridge trusses

Supervise road safety component DGH Directorate

of

Implementation Affairs Region I (Dit Binlak Wilayah I) Managing, controlling, monitoring and evaluation the implementation for consultant and TA DSC

Manage and controlling the implementation of Works and TA through Balai.

Approve technical justification to Subdit for Bitpran. Regional Implementation Agencies (Balai Pelaksanaan) Manage procurement, implementation of DSC Oversee implementation of road and bridge works in Non- Metropolitan areas

Manage DSC services (technical)

Manage DSC services (financial) through Dit. Binlak Wilayah 1’s Work Unit (Satker) Assist Director General in civil works contract matters

Ensure that agreed standards and procedures are applied, conduct quality assurance of works and environmental and social safeguards

Agency/Position Role Responsibilities

Specific Work Units (SNVT) for Construction (SatKer Pembangunan Provinsi or Satker Pembangunan Metropolitan)

Manage procurement and implementation of works

Administer civil works contracts as the

Employer (implementing unit for civil works)

Responsible to ensure quality of technical and financial implementation by acting as the Employer under civil works contracts with responsibility including: manage bidding process; evaluate bids; award and sign contract; arrange permits; inform Contractor of financing; appoint the Engineer; approve Variation Orders that increase cost or extend time; arrange payments; take over the site; be entitled to terminate Contract.

Design & Supervision Unit (Satker P2JN) and related SNVT

Liaison for Technical audit

Liaise between Dit Bintek, CTC and specific works unit for technical audit

Provide testing facilities for technical audit under Dit Bintek

Project

Management Unit (PMU)

Secretariat (channel of communications) between IBRD and GOI, and between all GOI units implementing Project components

Ensure effective implementation of the ACAP

Monitor project status and all related commitments

Prepare Financial Monitoring Reports Keep Project Management Manual updated and keep implementing units aware of their responsibilities

Manage CTC services (technical) Manage effective implementation of provisions specified in ACAP

Provincial Public Works Agencies

Liaison with Governor Synchronise planning of all National road works in the Province

Assist Director General / Directors / Balai as required

Coordinate with other concerned agencies, local governments and communities to support preparation and implementation of works

Within the Directorate General of Highways, the Directorate of Planning (Direktorat Bina Program = Dit Bipram) is responsible for planning, programming and budgeting of works on National roads including land acquisition costs.

The Directorate of Planning (DoP) of DGH as the lead Implementing Agency (IA) for the Project will form a Project Management Unit (PMU-WINRIP). PMU-WINRIP will be chaired by the Director of Planning in DGH. The PMU-WINRIP will be responsible for coordination of all WINRIP activities, and the Director General of Highways is ultimately responsible for oversight of all procurement

Standards for technical design, bid documents, specifications and quality control for all works will be authorised by the Directorate of Technical Affairs - DTA (Direktorat Bina Teknik, Bintek) of DGH through its Sub-Directorate of Road Engineering (Sub Dit Teknik Jalan) and Bridge Engineering (Sub Dit Teknik Jembatan) will supervise the design of civil

works by consultants. Urban works adopt Bintek standards for design, bid documents, specifications and quality control.

Standards and procedures for environmental management and monitoring for all works will be prepared by the Sub-Directorate of Environmental Engineering and Road Safety (Sub. Dit. Teknik Lingkungandan keselamatan Jalan) of the Directorate of Technical Affairs (Direktorat Bina Teknik) of DGH. Any land acquisition to be funded by central government for urban roads is managed by the Sub-Directorate of Land Acquisition (Sub. Dit. Pengadaan Lahan) in the Directorate of Freeways and Urban Roads. For non-urban roads, any land acquisition is managed by the respective Work Unit (SatKer) and RS.

In the controlling and coordinating as well as evaluation and monitoring the physical implementation of Works and Technical Assistance in particular supervision are the responsibility of Directorate of Implementing Affairs – DIA – Region, hence the Region 1 of Sumatera.

The Directorate General of Highway has an ad-ministrative unit located in each region called “Balai”. The Balai assigns a “Satker” (project manager) at the provincial level to handle all packages in that province. Satkers will also assign a Pelaksana Kegiatan (sub-project manager) named “Pejabat Pembuat Komitmen (PPK)” for each package. Balai are responsible for national road project implementation and, in particular, also assign a separate project manager for design of National road works, called Perencanaan Pengawasan Jalan dan Jembatan Nasional (P2JN). P2JN report to the respective Directorate within DGH. The Balai through the project managers are responsible to facilitate and assign project tasks to the relevant Provincial and Kabupaten public works departments (as needed). In relation to procurement process, each “Satker” will appoint working group procurement committee (POKJA) for works. These procurement committees should comply with the Presidential Decree of Republic of Indonesia No. 54/2010 and for this Project will also Procurement Guidelines and Consultant Guideline, as well as the Anti Corruption Action Plan.

The Director General of Highways is assisted by the Regional Implementation Agencies (Balai Besar Pelaksanaan Jalan Nasional (BBPJN) : Balai 1 that covers the northern part of Sumatera is located in Medan. Balai 2 that covers the western and central part of Sumatera is located in Padang, and Balai 3 that covers the southern part of Sumatera is located in Palembang.

The DSC will be managed by the Regional Implementation Agency (Balai Besar Pelaksanaan Jalan Nasional) located in Padang, and responsible for North Sumatera, West Sumatera, Bengkulu and Lampung,

Training is the responsibility of Personnel and Administration Division of the DGH Secretariat. Financial administration is the responsibility of each agency allocated a budget, overseen by DGH Secretariat’s Finance Division. Loan accounting and financial monitoring is the responsibility of the PMU. The financial management arrangements are further described in Section 3.3 of this PIP.

2.2

Appointment and Delegation of Authority of the Engineer

Under WINRIP, the Team Leader of the Design and Supervision Consultant (DSC) team will be appointed by DGH (as the Employer) to be the Engineer for all civil works. The Standard

Bidding Documents require the Engineer to be named in the Contract Data for each contract.

The DSC Team Leader as the Engineer for each Contract will delegate their authority in writing to a Chief Supervision Engineer (CSE) and advise DGH in writing of this delegation. Each civil works contract under WINRIP will be the responsibility of a nominated CSE. DGH will inform the respective Regional Implementation Agency (Balai) and the Head of the Work Unit and the Project Manager of this delegation. To ensure quality, the Engineer’s duties under the contract include approving variations (subject also to DGH approval), authorisation of payments, issuance of completion certificates, as well as providing decisions in contractual matters and taking action relating to disputes, etc.

2.3

Project Management and Staffing

2.3.1 Project Management Unit (PMU-WINRIP)

Project management will be coordinated through a Project Management Unit (PMU-WINRIP) which will be established before Loan Effectiveness by a decree of the Director General of Highways.

The PMU-WINRIP will be responsible for day-to-day management and implementation of the Project. It will be chaired ex-officio by the Director of Planning (Bipram) in DGH. The Executive Head of the PMU shall be a government official with sufficient project experience to provide for the efficient functioning of the PMU. The PMU shall be provided at all times with adequate funds and other resources, and staffed by qualified and experienced personnel in adequate numbers, as shall be necessary to accomplish its functions, responsibilities and objectives. The responsibilities, structure and staffing of the PMU-WINRIP and a description of the equipment and incremental operating costs are described in Annex 5 to this PIP.

The PMU will be supported by consultants, Core Team Consultants (CTC) and the Project Preparation Consultants (PPC) until the services of the latter are finished. The activities of the CTC are summarized in Annex 2. PMU will have the responsibility to oversee the implementation of the Anti-Corruption Action Plan (duties of PMU in Annex 5).

2.3.2 Project Management Manual

A comprehensive Project Management Manual (PMM) is prepared that will describe all requirements and procedures that must be followed by all parties, covering such areas as:

• Procurement regulations, procedures and requirements;

• The Financial Management Plan, including budgeting, disbursement, accounting and reporting of project finances, and auditing;

• Project Implementation Management Information and reporting systems and procedures, including the financial management information system (FMIS);

• Provisions of the Anti-Corruption Action Plan;

• The Environmental and Social Safeguards (ESS)

Because of the large number of separate agencies, project managers and procurement committees involved, a training program will be carried out prior to and during project implementation, as described in Annex 9.

The PMM is being prepared in English, and will be translated into Bahasa Indonesia prior to its dissemination.

2.4

Roles of Other Institutions

A significant number of other institutions will participate in and contribute to the project. For ease of presentation, these are summarised in the table below.

Table 2.2 : Roles and Responsibilities of Other Institutions

Agency Role Responsibilities

Badan Perencanaan Nasional (National Development Planning Agency – BAPPENAS)

Chair of Steering Committee

National investment strategy

Coordinate GoI policies in relation to Project Annual budget preparation

Ministry of Finance (MoF) DG Budgets DG Treasury

DG Debt Management

Budgeting Accounting

Budget and Treasury policy Annual budget preparation Budget execution and reporting

Loan Negotiations and Loan Repayments

Bank Indonesia Disbursement

processing

Disbursement processing Operation of Special Account Supreme Audit Agency (BPK)

Inspectorate General (IG) of MPW Audit

The roles of the two agencies in financial audit is explained in Section 3.3.5 and in technical audit in Section 3.4.5.

2.5

Coordinating Mechanisms

Every six months there will be a meeting between IBRD, MPW and the MOF to review measures taken in response to key audit report findings (see ACAP, Annex 11).

It will be the responsibility of the Steering Committee to coordinate central government ministries and agencies. For day-to-day implementation, the Steering Committee will appoint staff to maintain coordination between the Steering Committee, the PMU and the other institutions outside MPW.

Coordination within DGH will be facilitated by the Head of the related DGH Regional Implementation Agency (Balai). The Balai will monitor the timeliness and accuracy of the periodic reporting of project performance and financial data from each project, and assist to overcome any problems. Similarly, the Regional Office will provide necessary assistance to ensure proper coordination and reporting between the DSC and the PMU and its CTC.

3.

PROJECT ADMINISTRATION

3.1

Monitoring and Reporting Arrangements

A major project management function of the PMU and its consultants will be to monitor the overall performance of the project and its implementation. A number of separate monitoring and reporting tasks can be identified:

• Physical progress of implementation of the project components

• Financial performance (and comparison where appropriate with corresponding physical achievements)

• Compliance with prescribed procedures including contract administration

• Achievement of overall project objectives.

These monitoring and reporting arrangements will be enumerated in detail in the PMM. For financial and audit aspects, Section 3.3 provides details. A separate Project Monitoring and Evaluation program will be undertaken under the direction of IBRD, as described in Section 5.

The following intermediate and final progress reports will summarise all actions and outputs:

i. Financial Monitoring Reports (FMR). A quarterly Financial Monitoring Report (FMR) will be prepared by DGH/PMU and submitted to IBRD. The FMR will monitor and report all aspects of the financial performance of the project, including:

• Financial expenditure under each of the civil works contracts;

• Financial management including projected sources and application of funds for the three month period following the reporting period so to allow for timely replenishment of the Special Account.

ii. Project Progress Reports (PPRs) . Monthly PPRs and submitted to IBRD by PMU. The PPRs will monitor and report progress, identify delays and provide plans to overcome them, on a number of aspects to be agreed, including:

• Progress with procurement and pre-contract preparation;

• Physical progress in project implementation for each civil works contract;

• Details of any delays in the processing of invoices (see Annex 8);

• Overall progress against the planned implementation schedule.

iii. Monthly Reports of Consulting Services. All Consultants will prepare and submit monthly progress reports during their assignments. These will be submitted to IBRD by the PMU.

iv. Technical and Final Reports of Consultants. Copies of all technical and Final Reports produced by Consultants will be submitted to IBRD by the PMU.

v. Annual Progress Report on the Project. An Annual Progress Report summarising all aspects of project implementation over the preceding 12 months, and detailing project implementation plans for the coming year, is to be prepared by DGH/PMU and submitted to IBRD.

vi. Project Implementation Completion Report. Within six months of the closing date of the Loan, the DGH/PMU shall submit to IBRD an Implementation Completion Report in a format to be agreed.

3.2

Procurement Management

3.2.1 Procurement Management and Plan

The project will involve procurement of:

• Civil works, and

• Consultant services.

MPW’s Semi E-Procurement system will be used for the procurement of all consultancy and civil works contracts. Prior to the commencement of procurement under WINRIP, MPW will ensure that enhancements to the Semi E-Procurement system are in place in accordance with the Anti-Corruption Action Plan (ACAP)(Annex 11).

DGH will use an integrity pact for all WINRIP procurement exercises (See ACAP, Annex 11).

An Annual Procurement Plan, to be approved by IBRD, shall specify details of all packages. Any deviation from this Procurement Plan will require the written agreement of IBRD. Further details regarding procurement are provided in Annex 6 and 7.

3.2.2 Procurement Procedures

For the procurement of Civil Works, will use Pre-Qualification Bidding for 16 ICB packages and Post-Qualification for 5 NCB packages all will be Prior Review. Based on criteria to be agreed between IBRD and DGH before procurement commences. World Bank procurement procedures shall be followed for WINRIP.

General and additional requirements are outlined in Annex 6, Annex 7 and Annex 11. i) General Requirement

The general procurement requirements are:

• The Loan Agreement

• The World Bank published “Guidelines for Procurement under IBRD Loans and IDA Credits, edition May 2004 revised May 2010” (the Guidelines) - for works and goods.

• The World Bank “Guidelines for the Selection and Employment of Consultants by World Bank Borrowers, edition May 2004 revised May 2010”

• Procedures for any contract under National Competitive Bidding are outlined in the Loan Agreement

• The Project Management Manual (PMM) for WINRIP

• Requirements under the Anti-Corruption Action Plan

ii) Additional Requirements for Procurement of ICB and NCB 1). Bank Prior Review, Approval and “No Objection”

The World Bank will undertake Prior Review of all procurements (Table 3.1), to support issuance of No Objection Letters (NOLs) at each stage of the procurement process. The stages for Prior Review and/or issuance of NOLs for Civil Works, Goods and Consultancy Services procurement are detailed in Annex 6

Procurement of works, goods and services must be carried out within the procedures set out in the Anti-Corruption Action Plan (see Para 3.2.4 below). The documents which must be submitted to the Bank, in the case of prior review, before a NOL is issued, at each stage of civil works procurement

Table 3.1: Procurement Thresholds Prior Review

Thresholds (US$)

Procurement Method Thresholds (US$)

ICB NCB Shopping QCBS QBS CQS Least Cost

SSS

Goods 500,000 ≥1,000,000 <1,000,000 <50,000 Works 5,000,000 ≥10

Million

<10 million

N/A

Consulting 100,000 for firm

SSS: All

default TBD <200,000 TBD TBD

2). Advertising (ICB)

i. a General Procurement Notice (for procurement by ICB) in the World Bank Client Connection (CC), and in the UN Development Business on line. PMU will responsible to upload this information to World Bank CC;

ii. an advertisement as Specific Procurement Notice (SPN) in at least one newspaper of general circulation in the Employer’s country and in the official gazette, or in an electronic portal, access if any. PMU will responsible to upload this information to World Bank CC;

iii. an advertisement as Specific Procurement Notice (SPN) in the World Bank Client Connection and in the UN Development Business, and/or well-known technical magazines. PMU will responsible to upload this information to World Bank CC; and

iv. a letter addressed to contractors who, following the publication of the General Procurement Notice, have expressed interest in bidding for the Works. Procurement Committee will responsible to undertake this action supported by the PMU.

3). Preferences (ICB )

i. Domestic Bidders shall not receive a margin of preference in bid evaluation. No preference of any kind shall be given to national bidders; and

ii. Regulations issued by a sectoral ministry, provincial regulations and local regulations which restrict national competitive bidding procedures to a class of contractors or a class of suppliers shall not be applicable to procurement procedures under the Loan Agreement.

4). Standard Bidding Documents

Standard Bidding Document have been agreed and will apply to all 21 Works Contracts. Bidding documents for civil works will be the MDB/FIDIC Harmonised Standard Bidding Documents (SBD), edition May 2004 revised May 2010.

The “ruling language” and the “language for communications” as defined in the SBD will be English. Materials in Indonesian explaining the SBD are being prepared, to support training, and will be marked as “not valid as Bidding or Contract Documents”.

Consultant services contracts will be procured in accordance with the “Consulting Services Manual edition May 2004 revised May 2010”, including World Bank’s standard Request for Proposals, and standard contract formats.

5₎. Electronic Procurement (e-Procurement)

Electronic “Semi:” e-Procurement will be applied for all procurement for Works and Consultant services. Once the system and the legalization of electronic signature becomes available, then full e-Procurement will be used.

6). Registration (ICB )

i. Bidding shall not be restricted to pre-registered firms and shall not be a condition for participation in the bidding process.

ii. Where registration is required required prior to award of contract, bidders shall be allowed reasonable time to complete the registration process. Bidders shall not be denied registration for reasons unrelated to their capability and resources to successfully perform the contract; this shall be verified through post qualification.

iii. It is required to “log in” to use the e-Procurement system.

7). Joint Ventures (ICB)

In the case of a Joint Venture, one of the partners shall be nominated as being in charge, and this authorization shall be evidenced by submitting a power of attorney signed by legally authorized signatories of all the partners. The partner in charge shall be authorized to incur liabilities and receive instructions for and on behalf of any and all partners of the joint venture, and the entire execution of the Contract, including payment, shall be done exclusively with the partner in charge. A bidder declared the lowest evaluated responsive bidder shall not be required to form a joint venture or to sub-contract part of the supply of goods as a condition of award of the contract.

8). Bid Security (ICB)

Bid security shall be in the form of a bank guarantee from a reputable bank. It shall

be in an amount equivalent to at least 2% (Two percent) of the Total Bid Price, including Value Added Tax.

9). Bid Opening and Bid Evaluation (ICB)

i. Bids shall be opened in public, immediately after the deadline for submission of bids and in the presence of the Bidders Representatives. ii. When the number of responsive bids is less than three, re-bidding shall not

be carried out. All bids shall not be rejected and new bids solicited without the prior approval of the Bank

iii. Evaluation of Bids shall be made in strict adherence to the criteria declared in the bidding documents and contracts shall be awarded to the lowest evaluated, responsive bidder.

iv. Bidders shall not be eliminated from the detailed evaluation on the basis of minor, non-substantial deviations.

v. No Bidder shall be rejected merely on the basis of a comparison with the owner’s estimate and budget ceiling.

10). Award of Contract (ICB)

i. In the case that the bidder, who has offered the lowest evaluated bid prices for several contracts, the evaluation shall include an assessment of the bidders capacity to meet the aggregated requirements regarding:

•Financial situation (including cash flow);

•Experience;

•Current contract commitments;

•Equipment to be allocated; and

•Personnel to be fielded.

ii. For the purpose of Post-qualification, the bidder who has offered the lowest evaluated bid price shall submit the most up to date Qualification’s Information.

11). Pre Qualification and Post Qualification

Whether Pre-Qualification or Post-Qualification have been set as in Procurement Plan (annex 6).

For post qualification bids, successful contractors will have to satisfy established qualification requirements. The criteria to be met shall be set out in the bid document and if the successful bidder does not meet them his bid will be rejected. In such an event, DGH will make a similar determination for the next lowest evaluated bidder.

3.2.3 Procurement Agencies i. Civil Works

Procurement for civil works will be undertaken by DGH, through Working Group Procurement Team Committees (POKJA) to be appointed in each involved Province, under the Work Unit for Road Construction (SatKer Pembangunan) of Balai, and with procurement support to be provided from CTC when available. Whereas these units were previously responsible to the Head of the Provincial Works Agency, they are now responsible to the Head of the related Regional Bina Marga Office (Balai), monitored and supervised by DIA Region I and hence more clearly under the authority of the Director General of Highways.

ii. Consultant Services

Consultant services for the CTC, DSC, and Other Consultants will be procured by a Procurement Committee ,POKJA Dit Bipram for CTC, Balai BBPJN 2 West Sumatera for DSC . and Dit Bintek for Capacity Building for DGH Enviromental/Risk Mitigation and Road Safety Unit.

An outline Terms of Reference for the CTC and the DSC are included in Annex 2.

3.3

Financial Management Plan

The Project Management Manual will be prepared and include defined processes to ensure fiduciary safeguards are applied to budgeting, disbursements, accounting, contract administration, financial reporting and monitoring of all expenditures under the Project is undertaken appropriately. It will also integrate the existing financial accounting and

reporting systems used by Government and IBRD. The plan is described in more detail in

Annex 8.

3.3.1 Existing systems

i. Government

All Government projects must be budgeted, implemented and reported through the existing government systems which are based on Ministry of Finance systems. These are described in Annex 8.

ii. IBRD

IBRD will keep records of loan disbursements and cumulative loan drawdown and will send statements of account to the MOF, copied to PMU, at agreed intervals. The PMM will include safeguards to ensure that these statements are reconciled with the Government records.

3.3.2 Budgeting and Funds availability

GOI budgets include all costs disbursed by government, including those funded from foreign Loans and Grants. In order to keep a tight rein on expenditure, budgeting is carried out on a strictly annual basis, with no provision made for multi-year funding allocations even for long terms projects.

The PMM will detail that the PMU will prepare and submit Work Plans and applications for budget allocations in accordance with the budget preparation timetable so that the allocations made in the final budget (DIPA) should reflect the true funding needs of the project. The PMM will also provide for project management to prepare for IBRD forecasts of loan drawdown as or when required. 3.3.3 Disbursement of loan funds

i. Disbursement Plan

Based on the Project Implementation Schedule in Annex 12, a Disbursement Plan has been prepared to estimate the disbursement of funds during each six-month period beginning in July 2012, shown in Annex 8. The amount required to cover disbursements during the first six months is estimated to be US$ 18.78 million. The maximum amount required in any six-month period during the Project period is estimated to be US$ 88.17 million.

ii. Channels

There are three channels, described further in Annex 8, through which funds from a loan can flow:

• Special Account

• Reimbursement by GOI by IBRD, a subset of the Special Account

• Direct Payment

It is proposed that for large packages on WINRIP will adopt the similar disbursement procedure as SRIP by Direct Payment while smaller contract i.e. consulting services NCB and Incremental Operating Cost (IOC) will use Special Account.

iii. Certification and Payment Procedures

Payments due to contractors under civil works contracts will be certified by the Engineer (defined in Section 3.4.4). Other payments will be certified using procedures as set out in PMM.

3.3.4 Reporting

i. Monthly

A comprehensive monthly report is required. The content is described briefly in

Section 3.1 and will be detailed in the PMM. ii. Quarterly

The primary document for financial control will use an existing format called Financial Monitoring Report (FMR) which has been developed for use with Special Accounts and is currently in use on several projects. Produced quarterly, a principle objective of this report is to provide a forecast of future funding needs that will then trigger a transfer of loan funds from IBRD to the Special Account. The operation of the FMR will be detailed in the PMM.

iii. Periodic Forecasts

During project implementation, periodic forecasts of “Cost to Completion” might/would be prepared. These allow IBRD to check that the loan funds allocated are still sufficient to carry out the project to its latest design and specification. This forecast should also analyze latest expected final cost between the Loan Cost Categories to identify any reallocation of funding which may be required. Timing of the preparation of this forecast is flexible and depends on events.

3.3.5 Audit

WINRIP will be subject to financial audit by an independent auditing firm, procured by IBRD with grant funds (see ACAP, Annex 11). Terms of Reference will be determined by IBRD in consultation with MPW and BPK.

In addition, all contracts are liable to audit by the agencies whose task is to audit at random disbursements from government budgets including those funded from Loans or Grants. These agencies include both external and internal audit:

i. BPK, the external auditor which audits high level activities and semi-government agencies, reporting to parliament (DPR), not semi-government;

ii. The Inspectorate General of the Ministry of Public Works which examines any MPW activity, reporting to the Minister. In addition to routine audits, the Inspectorate General conducts special audits in cases where corruption is suspected, through its Special Audit Division. The Inspectorate General discusses its findings with the public and with all affected parties, including Donors and Lenders.

The annual audit reports shall be furnished to the Bank not later than six months after the end of the government fiscal year (June 30 of the following year). The audit will be conducted in accordance with the Term of Reference for audit acceptable to the Bank. DGH will make the annual audit report of the project available on the MPW website.

3.4. Contract Management 3.4.1. Civil works

i. Work Programmes 1 (WP-1)

There are 21 Works packages to be implemented, comprising WP-1: 4 packages, WP-2: 9 packages, and WP-3: 8 packages. All these 21 packages were well defined during the preparation of the Project, however, there may still be changes based on agreement between the Government of Indonesia (GOI) and World Bank.

For all 4 packages of WP-1, full project preparation has already been undertaken as part of the preparation of WINRIP, including economic evaluation, environmental review, and the preparation of detailed engineering design (DED) and bidding documents. These DED’s and bidding documents have also been reviewed by consultants, and recently updated by GOI in requesting the Bank approval for tender.

The tendering process for WP-1 had begun by late December 2011 by collecting PQ Documents. The contract award planned for 4th quarter 2012.

ii. WP-2 and WP-3

The WP-2 and WP-3 packages will be prepared and finalized by DSC, there are the Detailed Engineering Design and Environmental Safeguard and Social Action Plan (if any). However, there are possibility the DED will be prepared in advance through P2JN on related Balai. The DSC will keep required to check/review and finalized when this condition occure.

All designs will be reviewed and checked in the field as needed by the DTA.

3.4.2 Consultant Services

Consultancy services for Project Implementation (CTC and DSC) and for the Technical Assistance Packages for road sector institutional strengthening will be procured in accordance with World Bank standard procedures; following the “Guidelines for Selection and Employment of Consultants by World Bank Borrowers, edition May 2004, revised 2010”. They will be procured by procurement committees (POKJA) from Directorate of Planning for CTC and Directorate of Implementing Affairs Region 1 for DSC.

3.4.3. Quality Assurance

Under WINRIP, the Team Leader of the Design and Supervision Consultant team will be responsible for quality assurance for all works (Annex 2). Chief Supervision Engineers (CSE) will be responsible for a number of civil works contracts, with authority delegated in writing by the Engineer. They will direct and supervise the Field Supervision Team (FST) for each contract.

The Team Leader of the DSC will prepare and implement a Quality Assurance Plan that will identify measures to ensure the consistent achievement of proper standards of supervision across all contracts and FSTs. This Plan will be implemented in the field by the CSEs, under the supervision of the Team Leader according to procedures that will be specified in the QA Plan.

The CTC will provide additional monitoring and reporting of the implementation and effectiveness of the QA Plan (see Annex 2).

3.4.4. Technical Audit

Technical audit will be undertaken by Inspectorate General (IG) under MPW during implementation of civil works packages to assess to what extent the required quality has been achieved. Technical Audit findings will be used by DGH in assessing the performance of the DSC and the civil works contractors. This information will also be presented at the six monthly meeting of MPW, IBRD and the Ministry of Finance.

3.5.

Training and Workshops

For reasons of efficiency training might be conducted largely in regional centres. Annex 9

provides further details of the proposed Training Program, summarised in the following

Table 3.2.

These activities are apart from the mentoring and training to be provided by the DSC consultants under their TOR, for their own staff and for contractors’ staff.

Table 3.2 : Summary of Training Program

Topic Purpose

Procurement training (including provisions of ACAP)

 Special training in procurement for members of Procurement Committees

 Detailed provisions of ACAP Training in Project Management  _{Required civil service training} Refresher Training in Project

Management

 Feedback to project management staff from wider experience Application of PMM (including other

provisions of ACAP)

 Familiarization with Project Management requirements

 Awareness of particular requirements of ACAP Financial Management Reporting

Training (follows on from PMM Training)

 Procedures for monthly data collection, consolidation and reporting, for Procurement, Disbursements, Physical Progress Environmental Management Workshops  Review of results of ESCs (Environmental Special Clauses) Training for Treasurers (Brevet A course)  _{Basic civil service training for financial officers}

These training activities will be made available during the project, to ensure that project preparation, procurement and implementation is adequately supported. The above number of trainees has been estimated without identifying candidates. If job-holders have previously undergone the relevant training, and additional training is not required, these trainee numbers and possibly the course topics may not be achieved. PMU will monitor and report training related to WINRIP in the Project Progress Reports (PPRs).

3.5.1 Procurement Training

The training of all project managers and procurement committees in the procurement procedures required to be used under WINRIP is crucial. This training program is on the critical path for procurement, as indicated in the Project Implementation Schedule reviewed in Section 4.1, and it will need to be prepared and delivered as soon as possible to ensure that procurement of WP 1 contractors is not delayed..

Experienced staff of DGH will act as trainers, alongside CTC and DSC staff, and Advisors.

3.5.2 Training in Project Management

Project Managers in the SatKer Units at National / Provincial level are required to have successfully completed a special training program before being appointed. These training programs are provided annually by DGH.

annex 11 acap_final 240211

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Enhanced Disclosure and Transparency

Medium

Salient information is not available for both internal and external stakeholders, which hinders effective project monitoring.

website of MPW and made available to the public as a part of the public disclosure policy of the project. The Procurement Plan will be updated annually.

3. MPW will publish a quarterly newsletter on the official website of MPW including information concerning the list of contracts, implementation progress, project-related workshops and the number, typology and status of complaints. MPW will send the quarterly newsletter to the civil society forum in each project province in hardcopy or through an electric mailing system. 4. MPW will make all bidding documents, short-list of consultants and requests for proposals (this

provision does not include actual bids and proposals) issued in accordance with the procurement provisions of the loan agreement to any member of public promptly upon request, subject to payment of a reasonable fee for producing bidding documents and request for proposals. Such documents will continue to be made available until a year after completion of the contract entered into for the goods, works or services in question.

5. In line with the World Bank Procurement Guidelines, MPW will publish in UNDB on-line, dgMarket, on MPW website within two weeks of contract award (after Bank’s no objection) the following information; (a) name of each bidder who submitted a bid, (b) bid prices as read out at the bid opening; (c) name and evaluated prices of each bid; (d) name of bidders whose bids were rejected and the reasons for rejection; and (e) name of the winning bidders and the prices, as well as the duration and summary scope of the contract awarded. MPW will also make available, promptly upon request by any person or company, a list of all contracts awarded in the three months

preceding the date of such request including the name of the contractor/ supplier/ consultant, the contract amount, the number of bidders/proposals, the procurement method and the purpose of the contract.

6. MPW will make publicly available promptly after receipt of all final audit reports (financial or otherwise including qualified audit reports) prepared in accordance with the loan agreement and all formal responses of the government in relation to such reports. MPW will also post this on the MPW official website within one month after the report is accepted as final.

7. MPW will monitor financial, technical and physical progress of the project by an IT system (integrated SiPP) as publicly accessible project monitoring system.

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Table A8.1: Corruption Mapping Matrix

Risk Area Level of Risk

Opportunity for weak

Governance Mitigation Actions

Civil Society Oversight

oversight leads to less demand for project accountability.

openings and other key procurement steps. Community Representative Observers (CROs) will be invited from local universities or other selected independent institutions, and will sign the

attendance list for the procurement/selection process. Guidelines on appropriate procedures will be provided in the PMM.

9. MPW will establish a Third Party Monitoring (TPM) mechanism whereby the media and civil society groups can become involved in monitoring the progress of the project including implementation. This mechanism will include regular sharing of information with the media. 10. MPW will hold Annual Accountability Meetings to enhance accountability and sharing of project

information. The first of these meetings will be held at the province level before procurement of contractors or service providers, so that any civil society and community representatives can be selected in a transparent manner. The agenda of each meeting will be widely distributed among interest parties. Enhanced Complaints Handling Mechanism Medium

Issues are not reported, complaints are not addressed, and fears of recriminations for reporting corrupt or fraudulent conduct leads to discourage complaint.

11. An enhanced complaints handling mechanism, which includes maintaining project complaint log and filing to monitor status of follow- up of each complaint, will be established by the MPW. This mechanism will include provision for follow up investigations of substantial complaints by the Inspectorate General or third party audit to ensure independency and reliability of the system.

a. All complaints received will be acknowledged to the complainant by the Project Implementation Unit (PIU) within seven (7) days of receipt with a copy to PMU, DGRI and the World Bank. Bid-related complaints received during bid evaluation period will be responded after the contract award.

b. All complaints handling component will be included in the MPW website, and will be updated on a monthly basis.

c. The information concerning the alternative conduits for complaints (telephone hotline, dedicated email address and PO Box) will be widely disseminated.

d. Strict procedures to ensure anonymity of informants will be enforced whenever necessary.

e. Recording and appropriate referral of all incoming complaints will be undertaken by MPW with each case generating an automatic, standard format report to the Bank.

Complaints which deem possible serious infringements may be subject to further investigation by the Bank.

Mitigating Collusion, Forgery and Fraud Risks

High

From the past records, there are high risks of collusion, kickbacks

and bribes, overpayment and poor

delivery of contracts.

clarifications, (d) minutes of bid opening, (e) information of contract award. Other requirements can be added after no objection from the Bank.

13. There will be no pre-bid meetings for civil works bidding. All specifications will be defined in the bidding documents, and all clarifications will be sought through written correspondence and replies with all the bidders.

14. MPW, through CTC, will analyze key indicators of submitted bids to track unreasonable unit pricing and indication of collusion, and prepare a short technical report for each group of bidding (the bidding packages simultaneously invited) and share with the Bank.

15. Contracts will be awarded within original bid validity period. Any extension of bid validity period from the second time or for cumulatively greater than four (4) weeks will require Bank’s no objection. The Bank will not provide no objection to any extension beyond eight weeks.

16. Guidelines for preparation of specifications/selection criteria in the bidding documents and request for proposals will be prepared to ensure compliance with the Bank Guidelines.

17. MPW will use FIDIC arrangements with the independent supervision consultant having responsibility as the “Engineer” in the works contracts.

18. MPW will establish criteria for nominating procurement committees. Each Project Implementation Unit will include a specified procurement officer and financial management officer.

19. MPW will establish procedures to maintain proper project and procurement filing including filing of advertisements, bidding documents/request for proposals, clarifications/addenda to bidding document/request for proposals, minutes of bid opening, evaluation reports, contract award and final contract documents, and also for regular review of accounting reports including all supporting documents (i.e. travel report, receipts, etc.)

20. MPW will conduct regular interim audits by third parties, which will include review of procurement process and results.

Sanctions and

Remedies Medium

Weak Sanctions and Remedies does not

prevent future corruption

21. MPW will establish the remedial actions and sanctions for cases of fraud and corruption that are reported and for which evidence is found. This will include sanctions to staff proven to be involved in such cases.

22. In all project contracts, evidence of fraud, corruption, collusion and coercive practices will result in termination of the relevant contract, possibly with additional penalties imposed, such as fines,

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Table A8.1: Corruption Mapping Matrix

Risk Area Level of Risk

Opportunity for weak

Governance Mitigation Actions

blacklisting, etc. in accordance with Bank and/or Government regulations, and may result in suspension of disbursement of funds with respect to such contract. Any entity which is found to have misused funds may be excluded from subsequent funding. Information regarding such cases, where lessons are leaned and funds are retrieved, will be widely disseminated.

23. Disbursement to any given contract/location can be suspended or stopped completely if cases of corruption are not dealt with effectively.

ANNEX 12 ImpSched_UPDATED060312.Vers4 18/09/2012/3:23 PM

Feasibility Studies Mar09 Oct09 8 Environmental Screening Mar09 Dec09 10 Draft PIP, PMM and ACAP Nov.09 Dec.10 14 WP-1 Final Engineering Design Jul09 Aug.10 2 WP-1 Approvals from BinTek May10 Dec.10 8

weeks 1 2 3 4 5 6 7 8 9 _{10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52} LOAN PREPARATION PERIOD Feb.11 Dec.11 44

PROJECT LOAN AGREEMENT Feb.11 Dec.11 44

Prepare Loan Agreement Feb.11 Dec.11 44 Finalize PIP, PAP and PMM Oct 11 Feb 12 20 Negotiate and sign Loan Agreement (signed 14 Dec 2011) Apr 11 Dec 11 36

INITIATE WP-1 PROCUREMENT Jan.11 Aug.12 80

Establish PPU and PMU Jan.11 Feb 12 56 ç ç

Establish Procurement Committees Nov 11 Des.11 8 WP-1 tendering and award Des11 Aug.12 36

PROCURE IMPLEMENTATION SUPPORT July11 July12 52

Prepare EOIs for CTC, DSC and other TA as necessary May11 July11 12

EOI period July11 Aug.12 56 ç

Selection CTC/DSC July11 July12 52 ç ç ç ç ç ç ç ç ç

weeks LOAN PERIOD

PROCURE IMPLEMENTATION SUPPORT July11 June16 260

Mobilize consultants (CTC and DSC) July12 June17 260

WP-2/3 PROJECT PREPARATION July11 Dec14 182

Completion of WP-1 tendering Dec11 Aug12 36 WP-2/3 AMDAL and land acquisition Jul11 Dec.14 182

WP-2 designs Sept12 Apr13 32

WP-3 designs Mar13 Sep13 28

WP-2/3 PROCUREMENT Mar13 Apr14 56

WP-2 Approvals, NOLs, tendering and award Mar13 Oct13 32 WP-3 Approvals, NOLs, tendering and award Jun13 Apr14 44

WINRIP IMPLEMENTATION Sep12 Mar16 186

WP-1 implementation Oct12 Sep14 96 WP-2 implementation Des13 Des15 96

WP-3 implementation May14 Jun16 96 LCD

effective date March 2012, Loan Clossing Date December 2017

S O N D 2017

J F M A J J A S O N D J F M A J J

Nov

J A S O N D J O N

2016

A

LOAN PREPARATION

Start Finish Duration

2011

Jan Feb March April May

J

Dec

PROJECT IMPLEMENTATION

Start Finish Duration

2011 2012 2013 2014 2015

June July August Sept Oct