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Tanahu Hydropower Project (RRP NEP 43281)

Project Number: 43281 28 January 2013

Nepal: Tanahu Hydropower Project

Project Administration Manual

Contents

ABBREVIATIONS

I. PROJECT DESCRIPTION

II. IMPLEMENTATION PLANS

A. Project Readiness Activities

B. Overall Project Implementation Plan C. Major Packaging of the Project

III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Implementation Organizations – Roles and Responsibilities

B. Key Persons Involved in Facilitation and Implementation

C. Project Organization Structure

IV. COSTS AND FINANCING

A1. Allocation and Withdrawal of ADB ADF Loan Proceeds

A2. Allocation and Withdrawal of ADB ADF Hard Term Loan Proceeds

A3. Allocation and Withdrawal of EIB Loan Proceeds

A4. Allocation and Withdrawal of ADFD Loan Proceeds

B. Detailed Cost Estimates by Financier C. Detailed Cost Estimates by Output/Component D. Detailed Cost Estimates by Year E. Detailed Contract and Disbursement S-curve F. Fund Flow Diagram

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

B. Disbursement

C. Accounting

D. Auditing

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting

B. Procurement of Goods, Works and Consulting Services

C. Procurement Plan

D. Consultant's Terms of Reference

VII. SAFEGUARDS

VIII. GENDER AND SOCIAL DIMENSIONS

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION

A. Project Design and Monitoring Framework

B. Evaluation C. Reporting

D. Stakeholder Communication Strategy

X. ANTICORRUPTION POLICY

XI. ACCOUNTABILITY MECHANISM

XII. RECORD OF PAM CHANGES

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 Government and Asian Development Bank (ADB) policies and procedures. 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 executing agencies are wholly responsible for the implementation of ADB financed projects, as agreed jointly between the Government and ADB, and in accordance with Government and ADB’s policies and procedures. ADB staff is responsible to support implementation including compliance by executing agencies of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.

3. At Loan Negotiations the Government and ADB shall agree to the PAM and ensure consistency with the Loan Agreements for ADF resources. Such agreements shall be reflected in the minutes of the Loan Negotiations. In the event of any discrepancy or contradiction between the PAM and the Loan Agreement, the provisions of the Loan Agreement shall prevail.

4. After ADB Board approval of the project's report and recommendations of the President (RRP) changes

in implementation arrangements are subject to agreement and approval pursuant to relevant Government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.

Abbreviations

ADB = Asian Development Bank ADF = Asian Development Fund ADFD = Abu Dhabi Fund for Development CDC = compensation determination committee CDS = community development strategy CDTA = capacity development technical assistance EIA = environmental impact assessment EIB = European Investment Bank EMP = environmental management plan GESI = gender equality and social inclusion action plan ICB = international competitive bidding IEE = initial environmental examination IPPF = indigenous people planning framework NCB = national competitive bidding NGO = nongovernment organization PAM = project administration manual PIU = project implementation unit POE = panel of experts QCBS = quality- and cost based selection RIPP = resettlement and indigenous peoples plan RP = resettlement framework RRP = report and recommendation of the President to the Board SOE = statement of expenditure SPS = Safeguard Policy Statement TOR = terms of reference VDC = village development committee

I. PROJECT DESCRIPTION

1. The government of Nepal declared a national power crisis in 2008. The country has been suffering an acute power shortage, particularly in the winter dry season (November-April). Kathmandu has experienced blackouts of up to 14-18 hours every day in the dry season. Annual peak demand has been growing by 10% and the power deficit has been expanding rapidly. Because of constant power shortage, the customers have increasingly relied on diesel-based self power generators, which are expensive and polluting. The cost of diesel has doubled over since 2008.1 Tanahu is part the solution to tackle energy security, especially in Katmandu. The country’s overall energy strategy includes projects like Tanahu (which focuses mainly on urban areas), but also special schemes targeting energy security in rural areas. In the medium term, Nepal is also expected to develop energy export projects. Tanahu will be a medium-sized hydropower plant (140 MW) with water storage to make power supply available year-round and meet the country’s peak demand in particular for the dry season. To promote the project, the Tanahu Hydropower Limited (THL) was established. The project will also support transmission facilities, some rural electrification, reforms and the restructuring of the national utility – Nepal Electricity Agency (NEA). 2. The impact will be expanded access to clean and sustainable energy in Nepal. Its outcome will be increased efficiency and reliable supply of hydropower energy. 3. The outputs will be (i) a 140 MW hydropower plant and related transmission system—37 km, 220 kilovolts (kV)—made operational; (ii) rural electrification increased (covering 17,636 households);2 (iii) community development program in the project area implemented;3 (iv) NEA restructured; (v) other sector reforms undertaken; and (vi) an equity sales scheme for hydropower development initiated. The prospective sale of an equity stake in THL will be subject to market conditions and the execution of transactions. These outputs will be supported by the project coupled with a capacity development TA.4 4. A detailed project description is in Appendix 1.

1 While the diesel import remained at around 300 million liters during 2001 to 2007, it was increased to over 600

million liters in 2010. The present diesel price was also increased from Rs.53/liter to Rs. 97/liter. 2 Includes 17 VDCs of Majhkot, Kotdarbar, Rishing Ranipokhari, Sabhung Bhagawatipur, Kahu Shivapur, Baidi,

Bhirkot, Chhipchhipe, Kota, Ramjakot, Chhimkeshwari, Deurali, Dharampani, Gajarkot, Surdhara Thiring, Kihun, and, Arunodaya.

3 Includes 8 VDCs of Chhang, Majhkot, Bhimad, Jamune Bhanjyang, Kotdarbar, Rishing Ranipokhari, Sabhung

Bhagawatipur, and Kahu Shivapur, and 1 municipality of Byas. 4 The last three outputs will mainly be supported by the TA.

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II. IMPLEMENTATION PLANS

A. Project Readiness Activities

Mon Year

Schedule Date

Project Processing Milestones

Procurement Activities

Project Supervision Consultant (PSC)

Access road/bridge subcomponent

Headworks Powerhouse and Equipment

Responsible by:

ADB/THL/NEA ADB/THL NEA/THL ADB/THL JICA/THL

Sep 2010

02 ﾓApproval of Detailed Engineering Study (Grant) and PPTA

Mar 2012

25 ﾓIncorporation of THL

Jun 2012

25 ﾓInvite bids

Aug 2012

10 13-27

ﾓADB and JICA Joint FFM Minutes of

Discussion and Preliminary PAM

ﾓBid submission

Sep 2012

27

Oct 2012

23

31

ﾓ1st Management Review Meeting

ﾓContract sign

Jan 2013

18 25 31

ﾓ2nd MRM ﾓLoan Negotiations

ﾓShortlist and draft RFP approved

ﾓCommence works

Feb 2013

21 ﾓBoard Consideration/Approval

ﾓRFP Issuance

Mar 2013

31

ﾓSubmission of Proposals

Apr 2013

10

17

18 30

ﾓLoan Signing

ﾓApproval of Technical Evaluation ﾓFinancial Proposal open ﾓApproval of Financial Evaluation and Final Ranking

May 2013

06

13

17

30

ﾓLoan Effectiveness

ﾓEA commence to contract negotiation ﾓSubmission of Negotiated Contract ﾓADB’s Approval of Negotiated Contract ﾓContract Signing

Jun 2013

04 18 30

ﾓNotice to proceed ﾓMobilization

ﾓSubmittal of Draft PQ to ADB

Jul 2013

15 ﾓApproval of Draft PQ by ADB

Aug 2013

01

ﾓPQ Issuance

Sep 2013

27 30

ﾓPQ Submission ﾓDraft Bidding Documents (DBD)Submission

Oct 2013

31 ﾓSubmition of Draft PQ to JICA

Nov

3

Mon Year

Schedule Date

Project Processing Milestones

Procurement Activities

Project Supervision Consultant (PSC)

Access road/bridge subcomponent

Headworks Powerhouse and Equipment

Responsible by:

ADB/THL/NEA ADB/THL NEA/THL ADB/THL JICA/THL

2013 29 ﾓADB’s Approval of DBD

ﾓApproval of Draft PQ by JICA

Dec 2013

01 15

ﾓSubmission of Prequalified list

ﾓPQ Issuance

Jan 2014

02

15

22

31

ﾓADB’s Approval of PQ list ﾓBidding Documents Issuance

ﾓDBD Submission ﾓPQ Submission JICA’s Approval of DBD

Mar 2014

15

31

ﾓCompletion of Land Acquisition

ﾓSubmission of Prequalified list Approval of Prequalified list and Bidding Documents

Apr 2014

01

16

ﾓSubmission of Bids

ﾓBidding Documents Issuance

Jun 2014

30 ﾓSubmission of Bids

Aug 2014

15 ﾓSubmission of BER ﾓJICA’s Concurrence

Sep 2014

30 ﾓSubmission of TBER

Oct 2014

15

ﾓADB’s Approval of BER

Nov 2014

07

ﾓContract Signing

Dec 2014

15 ﾓCommencement of Contract

ﾓSubmission of FBER

Jan 2015

15 ﾓJICA’s Concurrence

Mar 2015

15

31

ﾓSubmission of Negotiated Contract ﾓJICA’s Concurrence

Apr 2015

07 28

ﾓContract Signing ﾓL/C Open

ADB = Asian Development Bank, BER = bid evaluation report, DBD = draft bidding document, EA = executing agency, FBER = financial bid evaluation report, FFM = fact finding mission, JICA = Japan International Cooperation agency, MRM = management review meeting, NEA = Nepal Electricity Authority, PPTA = project preparatory technical assistance, PQ = prequalification, RFP = request for proposal, TBER = technical bid evaluation report.

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B. Overall Project Implementation Schedule

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

Physical Component

Part A. 140MW Tanahu HPP

TF CA CW CSite Development

Land Acquisition

TP PQ TF CA CW Completion CHeadworks

TP PQ TF CA CW Commisioning (including testing) CWaterway, Powerhouse and E&M

EOI RFP CA MProject Supervision Consultant

EOI RFP CA M Completion CConsulting Services for CDS

EOI MSocial Safeguards Monitoring Consult.

EOI MEMP Monitoring Consultants

TP TF CA CW Completion C

Part B. T/L and RE

Reviews

Project Completion Report

2019 2020

Sources: Nepal Electricity Authority (NEA), Tanahu Hydropower Limited (THL), and PPTA Consultants

PROJECT IMPLEMENTATION SCHEDULE

C = Completion/Commissioning; CA = Contract Award; CW = Commencement of Work; EOI = Expression of Interest; RFP = Request For Proposals; M = Mobilization; PQ = Prequalification; TF = Tender Float; TP: Tender Preparation

201820172013 201520142012 2016

The Bidding Schedule for (i) Headworks and (ii) Waterway, Power House and Equipments is in Appendix 2. The Construction schedule is in Appendix 3.

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C. Major Packaging of the Project

A Procurement

No. Scope of Work Cost

1

$ mil Source

1

$ mil Nature of Procurement Implementation Period

2

1 Preparatory works: Site Development (THL)

Access roads, permanent bridges, construction power supply, campus and office for THL and Consultants.

9 GoN Per government guidelines. Design by GoN.

Jun 2012- Aug 2014 Construction from Nov 2012

2 Hydropower (1): Headworks (THL)

A concrete gravity dam or roller compact concrete dam subject to proposals of bidders, of 140m in height, 175m in crest length and approximately 800,000m3 in volume.

127

Joint cofinancing: ADB: 49; ADFD: 25; EIB: 53

Per ADB's guidelines; ICB; Works contract based on BOQ including prequalification; bidding documents preparation by PPTA Consultants, finalization by Supervision Consultants.

Aug 2013 - Jun 2020 Construction from Jan 2015

3 Hydropower (2): Waterway, Power house and related Equipment (THL)

a) underground power house of 27 m wide × 46 m high × 97 m long; b) waterway of approximately 1,500m in length; c) 2*70 MW turbine and generator units; d) spillway and sediment flushing equipments

162 Parallel cofinancing: JICA

Per JICA's guidelines. Design+build contract inlcuding prequalification. Bidding documents preparation by PPTA Consultants, finalization by Supervision Consultant.

Sep 2013 - Oct 2020 Construction from May 2015

4 Transmission line and Rural Electrification (NEA)

a) transmission line of 220 kV of 37 km long; b) the new 220kV Bharatpur substation; c) two new 33/11 kV substations; d) 33kV distribution lines 48 km long, 11kV distribution lines 344 km long and 400 V distribution lines 450 km long.

23 ADB

Per ADB's guidelines; ICB; Turnkey contract without prequalification; Bidding documents preparation and finalization by NEA

Jan 2015 - Apr 2020 Construction from Jan 2016

5 Excavation (THL) 1 ADB

Per ADB's guidelines; NCB; Works contract based on BOQ without prequalification; Bidding documents preparation and finalization by PPTA Consultants.

Feb 2013 - Dec 2013 Construction from Jul 2013

6

B Consulting Services (THL)

No. Scope of Work Cost

1

$ mil Source

1

$ mil Nature of Procurement Implementation Period

2

1 Project Supervision 17.9 ADB QCBS 90:10 Dec 2012 - Oct 2020 Mobilization from Aug 2013

2 Community Development Strategy 3.3 ADB QCBS 90:10 (from NGO/firm) Jun 2013- Jun 2020 Mobilization from Mar 2014

3 Rock Mechanical Test 1.9 ADB QCBS 90:10 Feb 2013 - Jun 2014 Mobilization from Sep 2013

4 Social and Environmental Safeguard Mitigation and Monitoring

2.9 ADB Individuals (from NGO/firm) Apr 2013 - Dec 2020

5 Panel of Experts for Monitoring and Evaluation 1.0 ADB Individuals (from NGO/firm) Apr 2013 - Dec 2020

C Others

No. Scope of Work Cost* $ mil

Funds* $ mil

Nature of Procurement Implementation

Period**

1 Land Acquisition and Resettlement 30

ADB: 26 (for THL); GON: 4 (for NEA)

Disbursement on reimbursement method after verification by monitoring consultant from NGO/civil society/firm

Jun 2013 - Mar 2014

2 Environment Mitigation Plan 21 GON Environmental safeguard mitigation and monitoring consultant from NGO/civil society/firm

Jun 2013 - Oct 2020

3 Administration Costs 17 GON

4 Taxes and Duties 18 GON

5 Contingencies 58 ADB: 19; JICA: 22; EIB: 10; ADFD: 5;

6 Financing Charges During Implementation 14 ADB: 4.8; JICA: 0.04; EIB: 7.3; GoN (for ADFD): 2.1

1 Rounded off.

2 Starting from prequalification/bidding documents/EOI floating to project completion. Bidding schedule for Hydropower (1) and (2) is in Appendix 2, the overall construction

schedule is in Appendix 3. ADB = Asian Development Bank, ADFD = Abu Dhabi Fund for Development, BOQ = bill and quantity, EIB = European Investment Bank, GoN = government of Nepal, ICB = international JICA = Japan International Cooperation agency, NGO = non governmental organization, PPTA = project preparatory technical assistance, QCBS = quality- and cost-base selection,.

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III. PROJECT SUPERVISION ARRANGEMENTS

A. Project Implementation Organizations – Roles and Responsibilities

Project implementation organizations

Management Roles and Responsibilities

Oversight Body Steering committee: Chair: secretary, Ministry of Energy Members: joint secretary, Ministry of finance; managing director, NEA; general managers (engineering services, grid development, distribution and consumer services), NEA; managing director, THL.

Executing Agencies: Tanahu Hydropower Limited (THL)

1. Nepal Electricity Authority (NEA)

2.

THL, as the special purpose vehicle (SPV) to develop

and implement the project, with assistances from a specialist firm to be engaged in accordance with ADB’s Guidelines on the Use of Consultants, to be responsible for the day-to-day project implementation supervision activities for Tanahu Hydropower component.

Responsible for the execution of the Transmission Line component and Rural Electrification component. The Project Implementation Units (PIU) established in NEA will be responsible for the day-to-day implementation of the Transmission Line and Rural Electrification components.

ADB To conduct regular project reviews and facilitate the implementation of the project

B. Key Persons Involved in Facilitation and Implementation

Ministry of Finance Madhu Kumar Marasini

Joint Secretary Telephone: Email:

Ministry of Energy Sunil Bahadur Malla

Joint Secretary Telephone: Email:

NEA

Rameshwar Yadav Managing Director Telephone: +977 14153052 / 14153067 Email: [email protected]

Kanhaiya Manandhar Director of Transmission Line Division Telephone: +977 9851029848 Email: [email protected]

Gagan Manandhar Contact Person of Tanahu-Bharatpur 220KV D/C TL

mailto:[email protected]


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Telephone: +977 14153174/9851004414 Email: [email protected]

Prakash Chandra Shresha Project Manager of Rural Electrification Telephone: +977 61466401/9851042226 Email:

THL Mahesh P. Acharya

Managing Director Telephone: +977 16615311/16616887 Email: [email protected]

ADB Division Director Yongping Zhai

Director, Energy Division Telephone No.: +63 26325976 Email: [email protected]

Mission Leader Kaoru Ogino

Principal Energy Specialist Telephone No.: +63 26325479 Email: [email protected]

C. Project Organization Structure

5. The THL (Organization Chart in Appendix 4 and Staff Schedule in Appendix 5) will be the executing agency (EA) of the Tanahu hydropower component, and NEA (Organization Chart in Appendix 6) will be the EA of transmission and rural electrification components. For the latter components, the Project Implementation Units (PIUs) will be established in the Department of Grid Development and Department of Distribution Consumer Services (West) within NEA. The THL and NEA’s PIUs have the detailed responsibilities as (i) overall coordination, overall project management and monitoring (ii) annual budget preparation and monitoring utilization of loan proceeds; (iii) progress reporting, including reports on cost management and project impact; and (iv) ensuring compliance with loan covenants.

Executing Agencies

EA Responsibility

THL Hydropower plant

NEA Transmission and rural electrification

6. On behalf of THL, ADB will select a specialist firm with extensive experience and track record with the supervision and management of similar hydropower projects, including the civil works and actual plant erection and commissioning, in consultation with THL. The firm in question will act as an independent firm who will work for THL, but also report to the co-financiers and THL and ADB. The work will combine supervision with technical support to THL, particularly on reservoir sedimentation risk. This is critical to the success of the project, just before and after the plant enters its commercial or operational phase. This service will be provided the same supervision consultant company. This ensures continuity, and detailed knowledge of the exact on-site conditions. 7. Another important task is the management of land acquisition and resettlement. NGOs will





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be recruited to work alongside the supervision consultants to help the government and THL with this work. To help promote social and environmental mitigation programs, some individual consultants will also be recruited. Another NGO or consulting firm will help the government and THL implement the community development strategy (CDS).

Project Implementation Chart

8. THL was established as a special purpose vehicle for the project. While it is a subsidiary of NEA, THL has been incorporated as a separate legal entity under the Companies Act of Nepal and registered as a legal entity distinct from NEA. In the loan and projects agreements, ADB, the government, NEA and THL have agreed on a number of corporate governance reforms to promote the independence and autonomy of THL. To ensure management capability, the supervision consulting firm, will help THL staff with overall project management. It will train staff on operational and commercial matters. Comprehensive corporate policies at THL for financial management, procurement, human resources management, safeguards and corporate governance codes will be developed through a CDTA attached to the project. The government, NEA, and THL will ensure fairness and transparency and put in place the right control risks for the project. 9. One special feature of the project is to explore opportunities for private sector participation in the project. The Government and ADB will discuss either a minority or majority stake in the company. ADB might even assist the process through a transaction advisory service.

Ministry of Finance

Government of Nepal

Ministry of Energy

Government of Nepal

EA: NEA (transmission and rural electrification)

Asian Development Bank

(ADB)

EA: THL (hydropower plant)

1. Supervision firm (project management)

Panel of experts

2. Individual/NGO (safeguard monitoring /mitigation) 3. Anchor NGO/firm (community development)

3.

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IV. COSTS AND FINANCING

10. Project cost. The total project cost is estimated at $505 million including taxes, duties, interest charges during implementation and contingencies.5 The investment plan is as below:

Project Investment Plan ($ million)

Item Amount

A. Base cost a

1. Hydropower plant – civil works, and plant and equipment 288 2. Transmission system 15

3. Rural electrification 8 4. Land acquisition and resettlement 30 5. Environmental management 21 6. Other

b 46

7. project management and community program 25 Subtotal (A) 433 B. Contingencies 58 C. Financing charges During Implementation 14 Total (A+B+C) 505

a 2012 prices.

b Preparatory and overhead costs including taxes and duties to be finance by the government. Source: Asian Development Bank, Nepal Electricity Authority, and Tanahu Hydropower Limited.

11. Cofinancing. ADB proposed to finance $150 million from ADF resources.6 JICA is expected to provide concessional loan, amounting to ¥15,137 million (equivalent to $184 million at the prevailing exchange rate) at the ―Minimal Interest Rate Initiative for low-income LDCs (MIRAI Initiative).7 The European Investment Bank (EIB) is expected to provide loan of $70 million and the Abu Dhabi Fund for Development (ADFD) is expected to provide $30 million.8 The remaining cost will be funded by the counterpart fund from the government. While JICA is expected to finance the hydropower plant’s equipment and powerhouse in parallel, ADFD and EIB are expected to jointly finance the hydropower plant’s headwork with ADB.9 The government will make available all counterpart funds required for the timely and effective completion of the project, either through budgetary allocations or through other arrangements acceptable to ADB. For effective coordination among the cofinanciers, ADB will sign a procedural agreement with JICA and similar arrangements with ADFD and EIB for collaborative cofinancing to ensure mutual cooperation, coordination, and information exchange after each cofinancier approves the project. The financing plan is as shown below:

5 THL will require $470 million for the hydropower plant component and NEA will do $35 million for transmission and

rural electrification components. 6 The resources compromises (i) ADF loan of $ 120 million, and (ii) hard term ADF loan of $ 30 million. Under the

ADB guidelines, the hard term ADF loan will meet the criteria for high revenue earning projects that can earn foreign currency revenue and service foreign currency debt.

7 Interest rate of 0.01% per year; repayment period of 40 years including grace period of 10 years; and untied

conditions for procurement. 8 For loan from EIB, the interest rate is tentatively assumed as 3.08% with repayment period of 25 years including

grace period of 5 years. For loan from ADFD, the interest rate is tentatively assumed as 2.0% with repayment period of 20 years including grace period of 5 years. The final terms are subject to agreement by EIB and ADFD each.

9 The joint cofinancing from ADFD and EIB will not be administered by ADB. The documents will be signed as

quickly as possible, but in any event, by no later than the issue of any final bidding documents in respect of any contract to be cofinanced by ADB under the project. THL’s debt will be sourced from ADB and JICA finance, and its equity will be from NEA where the funding sources will be ADB, ADFD, EIB and the government.

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Financing Plan

Source Amount Share of ($ million) Total (%)

Asian Development Bank (ADB) 150 30 Asian Development Fund (regular term loan) 120 24 Asian Development Fund (hard-term loan) 30 6 Abu Dhabi Fund for Development (ADFD) 30 6 European Investment Bank (EIB) 70 14 Japan International Cooperation Agency (JICA)

184 36

Government of Nepal (GON)/Nepal Electricity Authority (NEA) 71 14 Total 505 100

Source: Asian Development Bank estimates.

12. Financing items. Each of the major financing items and their major financing sources are as follows:

Major Financing Items and Funding Sources

Packages Major sources 1. Hydropower plant - Headworks ADB, EIB, and ADFD 2. Hydropower plant – Equipment, powerhouse and waterway JICA 3. Transmission system ADB 4. Rural electrification ADB 4. Land acquisition and resettlement

a GON /(ADB)

5. Environmental management b GON

6. Other c GON

7. project management and community program ADB a

GON will settle payments for land acquisition and resettlement. ADB can reimburse the THL’s costs besides NEA’s costs when satisfactory to ADB. b

While tree plating cost will be financed by GON/NEA, costs of fish hatchery and consultancy costs related to environmental mitigation and monitoring will be financed by ADB. c

While the preparatory site development and administration costs are financed by GON/NEA. ADB will finance part of adit excavation and consulting services including rock mechanical tests and project supervision contract.

13. Relending arrangements. The government and NEA will enter into subsidiary agreements pursuant to which it will relend the loan proceeds of each cofinancier to NEA. NEA and THL will enter into subsidiary financing agreements pursuant to which NEA will onlend part of the loan proceeds allocated to the hydropower plant and the community program to THL and contribute the remainder to THL’s equity in accordance with the debt:equity arrangements set out in the table below. The terms for relending and onlending shall follow the provisions set out in Section 3.01(c) of the loan agreements between the government and ADB. THL will claim loan proceeds through the government to ADB and JICA and inform NEA of it. For NEA’s transmission and rural electrification components, the loan proceeds of ADB will be claimed and utilized by NEA.

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Financing Sources for THL and NEA

Item Amount ($ million)

1. Hydropower Plant for THL 470

(Debt: Equity = 60:40)

Debt (Total) through GON/NEA 282

ADB a 98

JICA 184

Equity (Total) through GON/NEA 188

ADB 22

ADFD 30

EIB 70

GON 66

2. Transmission and Rural Electrification for NEA 35

Debt (Total) through GON 35

ADB 30

GON 5

Total (=1 + 2) 505 a

Includes ADF hard-term loan ($30 million) and ADF regular term loan ($68 million). ADB = Asian Development Bank, ADFD = Abu Dhabi Fund for Development, EIB = European Investment Bank, JICA = Japan International Cooperation Agency, GON = government of Nepal, NEA = Nepal Electricity Authority.

14. Land acquisition and resettlement. The costs of land acquisition and resettlement for THL’s hydropower plant reach $26.7 million and for NEA’s transmission and rural electrification is $3.3 million, totaling $30 million for both. For THL, the costs mainly constitute compensation for loss of assets, fees for registration and disposal site lease, resettlement assistance, income restoration, and monitoring and evaluation.10 Only THL’s expenditures for land acquisition and resettlement costs are eligible for ADB financing through reimbursement, if appropriate procedures are followed in executing them (i.e. to ADB satisfaction). To assess their eligibility, due diligence was undertaken to confirm (i) their expected productive value, (ii) the suitability of land market conditions, (iii) the adequacy of administrative arrangements and fund channeling, (iv) the risk profile of the transaction, and (v) the soundness of the monitoring and evaluation arrangements. ADB is so far satisfied with the quality of the due diligence and the process followed. 15. ADB will only finance THL’s land acquisition and resettlement costs that are directly related to the project and that are incurred in accordance with the social safeguards documentation developed for the project and cleared by ADB. The land acquisition will create direct and indirect economic benefits through additional power generation, local employment opportunities, and community development. Because of the country’s acute power shortage, the project’s power supply will widely impact the country’s economic growth. The project also includes the community development, rural electrification, and social development programs with special attention to vulnerable persons, contributing to poverty reduction in the project area. 16. On 20 May 2010, the government agreed on land acquisition for the project. This received cabinet approval. The detailed legal framework, value methodology, and process for land acquisition and compensation are defined in a draft Resettlement and Indigenous Peoples Plan (RIPP). As per the Land Acquisition Act, the compensation determination committee (CDC) has been established mainly to (i) determine appropriate value of acquired land through

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The detail is given in the draft Resettlement and Indigenous People Plan.

13

negotiated settlement, (ii) negotiate the current market value of land, and (iii) probe appropriateness of land-for-land and cash-for-land compensation modalities. The Land Revenue Act also ensures land registration and transfer of titles, and the Land Reform Act Amendment prescribes that in case the state acquires land which is being cultivated by a tenant, both the tenant and the landlord will each be entitled to 50% of the total compensation paid to the land. Based on these regulatory frameworks, negotiated settlement on compensation for land acquisition for the project was adopted to assess land and asset valuation for the purpose of the project. Based on surveys and meetings with the community members and representatives of the project affected households, the consensus has been arrived for asset valuation, making it transparent with CDC’s involvement. The consultations and negotiations were held in public with groups of project affected persons and agreed on compensation rates for different types of land and property categories. Thus, negotiations for most of the land required for the project have already been conducted and the remaining activities are expected to be done on that basis soon. Upon the project financial closure, THL will finalize the process by requesting CDC to announce and publish the final notice for land acquisition. The affected households will then be invited to collect forms for their compensation. 17. The compensation for acquired land is generally paid in cash.11 As described in the RIPP, the process for channeling the fund for compensation will follow the Land Acquisition Act. CDC under the chairmanship of the Chief District Officer will determine the timetable of compensation payments and the payments will be deposited in the district office of Tanahu. The government will be required to settle these payments through its own budget. The payment and receipt process and record will be monitored and certified by experts from NGOs/civil society organizations that will assist in monitoring the processes of land acquisition and payment. Only after verification that land has been acquired in accordance with the processes and requirements set out in this PAM, RIPP, ADB’s Safeguard Policy Statement (2009), ADB will reimburse the government/THL for such expenditures incurred. Most of resettlement impacts are related to the project site development such as construction of access roads, camping and disposal sites. Since these areas are in part of project preparatory work before starting the main construction of facilities, the resettlement processes are expected to be implemented intensively at the early stage of project implementation. 18. THL promoted the above processes before discussing ADB’s involvement in funding these costs. For the purposes, THL also established the Environment and Social Management Unit (ESMU). Significant portion of land acquisition was already negotiated and made consensus with affected communities for seeking compensation negotiated; risks of price manipulation or inflation are unlikely to happen. However, if compensation payments are unduly delayed, the affected households might demand for an upward revision of the rates to reflect the market conditions. Under such circumstances, there is high probability that they would renegotiate the rates of compensation. Therefore, it is necessary to start the land acquisition process with the government’s resources as early as possible. Based on this, ADB’s consultancy support will help expedite the process of proper resettlement implementation and mitigate the risk relating to delays. ESMU will further be supported by a supervision firm which will help overall project management to strengthen THL’s implementation capacity under ADB financed consultancy services. 19. The project will have the support of experts from NGOs/civil society organizations. They will be monitoring and evaluating the resettlement and payment processes under ADB financed

11

The affected persons opted for cash compensation for both physical and economic displacement. Given no one opted for land-for-land compensation, the project will not have relocation sites.

14

consulting services.12 In accordance with the RIPP, the experts will monitor if the absence of legal title to land should not be a bar for resettlement, and if vulnerable groups such as indigenous peoples, landless, women, especially women-headed households, poverty groups disabled and senior persons are entitled to special benefit and assistance packages in addition to compensation and resettlement. Since the PPTA established comprehensive database for affected households, the experts will record resettlement information including the valuation, compensation payments, receipts and dates, assess their compliance with RIPP, SPS, and PAM before and after land acquisition and resettlement, and submit progress reports to ADB. In case of any disputes, grievance redress mechanisms are provisioned in detail in the RIPP and an independent panel of experts (PoE) will also monitor and evaluate the resettlement processes and results. Should ADB, the experts and PoE confirm any irregularity on particular areas in the resettlement process, ADB will consider suspending reimbursements of the costs until the matter has been settled to the satisfaction of ADB. 20. The allocation of withdrawal of loan proceeds, the detailed cost estimates, the contract and disbursement s-curve, and the ADB fund flow diagram are provided in the following tables:

A1. Allocation and Withdrawal of ADB ADF Loan Proceeds

CATEGORY ADB FINANCING BASIS

No. Item

Amount Allocated for ADB ADF Loan US$ million Percentage and Basis for

Withdrawal from the Loan Account

Category Subcategory

1 Headworks 23.9 18.9% of total expenditure claimed*

2 Project Preparatory Works 1.3

2A Adit Excavation 0.9 100% of total expenditure claimed*

2B Equipment/Vehicle 0.4 100% of total expenditure claimed*

3 Transmission line and RE 22.7 100% of total expenditure claimed*

4 Consulting Services 27.0

4A Project Management Consultant

17.9 100% of total expenditure claimed*

4B Supporting for Community Development Program


4C Rock Mechanical Test 1.9 100% of total expenditure claimed*

4D Supporting for Safeguard Monitoring


5

Land Acquisition and Resettlement Compensation for Tanahu Hydropower Plant


6 Financing Charges 4.0 100% of total amount due

7 Unallocated 14.8

8 Total 120.0

* Exclusive of all duties and taxes imposed within the territory of the Borrower.

12

TOR is given Appendix 13.

15

A2. Allocation and Withdrawal of ADB ADF Hard Term Loan Proceeds

CATEGORY ADB FINANCING BASIS

Number Item

Amount Allocated for ADB ADF Hard-term Loan US$

million Percentage and Basis for

Withdrawal from the Loan Account




3 Unallocated 4.7

4 Total 30.0


A3. Allocation and Withdrawal of EIB Loan Proceeds

CATEGORY FINANCING BASIS

Number Item

Amount Allocated for EIB Loan US$ million Percentage and Basis for Withdrawal

from the Loan Account


1 Headworks 52.8 41.7 % of total expenditure claimed*


3 Unallocated 9.9

4 Total 70.0


A4. Allocation and Withdrawal of ADFD Loan Proceeds

CATEGORY FINANCING BASIS

Number Item

Amount Allocated for ADFD Loan US$ million Percentage and Basis for Withdrawal

from the Loan Account



2 Unallocated 4.7

3 Total 30.0


16

C. Detailed Cost Estimates by Financers

Item

($ million)

Total Cost

ADF Loan ADF Hardterm JICA Loan EIB Loan ADFD GON

Amount % of Cost Category


Amount

% of Cost

Category



Amount

% of Cost

Category

A. Investment Costsa

1 Headworks 126.5 23.9 18.9% 24.5 19.4% 0.0 0.0% 52.8 41.7% 25.3 20.0% 0.0 0.0%

2 Waterway, Powerhouse & EM 161.9 0.0 0.0% 0.0 0.0% 161.9 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

3 Environment 20.8 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 20.8 100.0%

4 Social Safeguards

a.Social Safeguards for Tanahu 26.3 26.3 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

b.Social Safeguard for T/L 2.2 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 2.2 100.0%

c.Social Safeguard for RE 1.1 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 1.1 100.0%

5 Transmission 14.6 14.6 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

6 Rural Electrification 8.1 8.1 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

7 Project Preparatory Works

a.Adit Excavation 0.9 0.9 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

b.Access Road and Bridge 8.8 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 8.8 100.0%

c.Equipment/Vehicles 0.4 0.4 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

8 Consultants

a. Project Management 17.9 17.9 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

b.CDS 3.3 3.3 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

c.Rock Test 1.9 1.9 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

d.Safeguards Monitoring(inc PoE) 3.9 3.9 100.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%

9 Taxes and Dutiesb 17.6 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 17.6 100.0%

Subtotal (A) 416.2 101.2 24.3% 24.5 5.9% 161.9 38.9% 52.8 12.7% 25.3 6.0% 50.5 12.1%

B. Recurrent Costs

1 Administrative Expenses 17.0 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 17.0 100.0%

Subtotal (B) 17.0 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 17.0 100.0%

Total Base Cost 433.2 101.2 23.4% 24.5 5.6% 161.9 37.4% 52.8 12.2% 25.3 5.8% 67.5 15.6%

C. Contingencies: 57.5 14.8 25.7% 4.7 8.0% 21.8 37.8% 9.9 17.3% 4.7 8.3% 1.7 2.9%

D. Financing Charges in Imple.d

1 Interest During Implementation 14.2 4.0 27.9% 0.8 5.9% 0.0 0.3% 7.3 51.4% 0.0 0.0% 2.1 14.5%

2 Commitment Charges - - - - - - - - - - - -

Subtotal (D) 14.2 4.0 27.9% 0.8 5.9% 0.0 0.3% 7.3 51.4% 0.0 0.0% 2.1 14.5%

Total Project Cost (A+B+C+D) 505.0 120.0 23.8% 30.0 5.9% 183.7 36.4% 70.0 13.9% 30.0 5.9% 71.3 14.1%

17

D. Detailed Cost Estimates by Outputs/Components

Item

($ million)

Total Cost

Part A:Tanahu Hydropower

Part B: Transmission Part C: Rural Electrification

Amount % Amount % Amount %

A. Investment Costsa

1 Headworks 126.5 126.5 100.0% 0.0 0.0% 0.0 0.0%

2 Waterway,Powerhouse & Equipment 161.9 161.9 100.0% 0.0 0.0% 0.0 0.0%

3 Environment 20.8 19.2 92.4% 1.6 7.5% 0.0 0.1%

4 Social Safeguards 29.6 26.3 88.8% 2.2 7.4% 1.1 3.8%

5 Transmission 14.6 0.0 0.0% 14.6 100.0% 0.0 0.0%

6 Rural Electrification 8.1 0.0 0.0% 0.0 0.0% 8.1 100.0%

7 Project Preparatory Works 10.1 10.1 100.0% 0.0 0.0% 0.0 0.0%

8 Consultants 27.1 27.1 100.0% 0.0 0.0% 0.0 0.0%

9 Taxes and Dutiesb 17.6 16.2 91.7% 0.3 1.4% 1.2 6.8%

Subtotal (A) 416.2 387.2 93.0% 18.6 4.5% 10.5 2.5%

B. Recurrent Costs

1 Administrative Expenses 17.0 17.0 100.0% 0.0 0.0% 0.0 0.0%

Subtotal (B) 17.0 17.0 100.0% 0.0 0.0% 0.0 0.0%

Total Base Cost 433.2 404.2 93.3% 18.6 4.3% 10.5 2.4%

C. Contingencies

1 Physicalc 18.8 18.1 96.2% 0.5 2.5% 0.2 1.3%

2 Priced 38.7 34.0 87.7% 2.2 5.8% 2.5 6.5%

Subtotal (C) 57.5 52.8 90.5% 2.7 4.7% 2.7

4.8%

D. Financing Charges During Implementatione

1 Interest During Implementation 14.2 13.7 96.2% 0.3 2.2% 0.2 1.6%

2 Commitment Charges

Subtotal (D) 14.2 13.7 96.2% 0.3 2.2% 0.2 1.6%

Total Project Cost (A+B+C+D) 505.0 470.0 93.0% 21.6 4.3% 13.4 2.7%

18

E. Detailed Cost Estimates by Year

Item

($ million)

ADB (ADF)F Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

A. Investment Costs

1 Headworks 48.5 0.0 0.0 10.0 6.0 7.0 8.0 9.0 8.5

2 Social Mitigation 26.3 23.0 3.4 0.0 0.0 0.0 0.0 0.0 0.0

3 Transmission 14.6 0.0 0.0 0.0 0.0 3.1 5.5 4.0 1.9

4 Rural Electrification 8.1 0.0 0.0 1.4 1.4 1.4 1.4 1.4 1.4

5 Preparatory Expenses 1.2 1.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0

6 Consultants

a. Project Management 17.9 1.9 1.9 1.9 2.2 2.3 2.5 3.2 2.0

b. CDS 3.3 0.0 0.3 0.5 0.5 0.5 0.5 0.5 0.5

c. Rock Test 1.9 1.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0

d. Safeguards Monitoring 3.9 0.0 0.4 0.6 0.6 0.6 0.6 0.6 0.6

Subtotal (A) 125.7 28.0 6.0 14.4 10.7 14.8 18.4 18.6 14.9

Total Base Cost 125.7 28.0 6.0 14.4 10.7 14.8 18.4 18.6 14.9

B. Contingencies 19.5 0.0 0.0 2.0 3.0 4.0 4.0 4.0 2.4

C. Financing Charges During Imple. 4.8 0.2 0.3 0.5 0.6 0.7 0.7 0.8 1.0

D. Total Project Cost (A+B+C) 150.0 28.2 6.3 16.9 14.3 19.5 23.1 23.4 18.3

% Total Project Cost 100% 18.8% 4.2% 11.3% 9.5% 13.0% 15.4% 15.6% 12.2%

19

E. Contract and Disbursement S-curve

Figure E.1: Contract Award and Disbursement

F. Fund Flow Diagram

Direct Payment Procedure

Ministry of Finance

(Ministry of Energy)

NEA / THL

Asian Development Bank

Document Flow

Legend:

Turnkey Contractors/Suppliers

Fund Flow

Supplier’s Bank

Commitment Procedure

Reimbursement and SOE Procedure

20

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

21. NEA is an autonomous body corporate under the Nepal Electricity Authority (NEA) Act, 1984. The financial management of NEA was reviewed using ADB’s financial management assessment questionnaire and interviews. The responses by NEA to the questionnaire revealed that NEA has defined policies and procedures in place for accounting, budgeting, and auditing activities. NEA has implemented externally financed projects from ADB, World Bank, and bilateral agencies from China, Denmark (DANIDA), France, Germany (KfW), India, Japan (JICA), Korea, Norway (NDF), OPEC countries, and other countries.

22. NEA is required to prepare annual audited financial reports under Section 26 and 30 of the NEA Act 1984. As per the annual reports by the statutory auditor, the financial statements comply with the Nepal Accounting Standards and presentation requirements under Companies Act 2063. NEA has provided training on financial accounting, inventory management to staff. Financial accounting, payroll and inventory management training packages are available in NEA. NEA training center has also provided short term accounting training programs especially to the lower level staff.

23. NEA is required to undertake periodic inventories of fixed assets and stocks on a yearly basis through physical inspections. While this is being done for stocks, it is partially being done for fixed assets. NEA has also developed an insurance fund to cover any loss of plant, property, equipment. NEA has an internal audit department that is headed by a qualified accountant who reports to the Managing Director. NEA is implementing a new information technology based financial accounting system under the World Bank funded institutional strengthening program that is ongoing. 24. THL has already been incorporated as a special project company, which has no track records of management of construction and operation activities yet. THL adopts NEA's operating and management practices. Through the course of the project - particularly with the envisaged CDTA support, THL's own governance, accounting and management structure, policies, and systems will be evolved to create a commercial, stand-alone company by 2015.

B. Disbursement

25. The ADB’s financing proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2012, as amended from time to time),1 and detailed arrangements agreed upon between the government and ADB. 26. Pursuant to ADB's Safeguard Policy Statement (2009),2 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set Appendix 5 of the SPS. 27. Before the submission of the first withdrawal application, the NEA/THL/the government should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the NEA/THL/the government, together with the

1 Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf. The main

component of headwork (civil work) will be disbursed by direct payment or reimbursement, While the LC method is not appropriate to civil work, equipment in the transmission and rural electrification component can be done by LC.

2 Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf

http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf

http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf

21

authenticated specimen signatures of each authorized person. For reimbursement procedure, the minimum value per withdrawal application is US$100,000, unless otherwise approved by ADB. The NEA/THL is to consolidate claims to meet this limit for reimbursement account claims. For SOE, the ceiling is $100,000 per payment. Individual payments exceeding the SOE ceiling should be supported by full documentation. SOE records should be maintained and made readily available for review by ADB's disbursement and review mission or upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit. The NEA/THL will be responsible for (i) preparing disbursement projections for each year, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) preparing and sending withdrawal applications. 28. THL’s headworks will be financed by ADB, ADFD, and EIB on a joint basis. For the contract of headworks, THL will make separate withdrawal applications for disbursements to each cofinancier on a pro rata basis, as defined in the arrangements for collaborative cofinancing. THL will claim ADB loan proceeds to ADB through the government and inform NEA of it. For NEA’s transmission and rural electrification components, NEA will claim loan proceeds to ADB. 29. The government will make available adequate budgetary allocation for social and environmental mitigation costs. ADB will reimburse the costs of land acquisition and resettlement required only for THL after their costs are paid by the counterpart fund from the government/NEA, provided that such expenditures are incurred in compliance with all applicable requirements under PAM, RIPP, and ADB’s SPS.

C. Accounting

30. NEA/THL will maintain separate project financial statements and records by funding source for all expenditures incurred on the project. Project financial statements will follow international accounting principles and practices and/or those prescribed by the government's accounting laws and regulations.

D. Auditing

31. NEA/THL will cause the project accounts to be audited in accordance with International Standards on Auditing and/or the government's audit regulations by an auditor acceptable to ADB.3 The audited financial statements, and audit report and management letter will be submitted in the English language to ADB within 6 months of the end of the fiscal year by NEA/THL. The annual audit report will include a separate audit opinion on the use of the proceeds of the ADB loans and compliance with the financial covenants of the Loan Agreements as well as on the use of the procedures for statement of expenditures) and a management letter (which sets out the deficiencies in the internal control of the Project that were identified in the course of the audit, if any). The government and NEA/THL have been made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited financial statements. ADB reserves the right to verify the project's financial statements to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. For revenue generating projects, ADB requires audited financial statements for the executing agencies. ADB shall disclose the annual audited financial statements for the Project and the opinion of the auditors on the financial statements within 30

3 THL will maintain its corporate financial statement instead of the project account since those two accounts are

identical to THL.

22

days of the date of their receipt by posting them on ADB’s website.

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting

32. In order to expedite project implementation, the government has requested advance contracting actions for the all the works, goods and consulting services. The government and the NEA/THL have been advised that approval of advance contracting does not commit ADB to finance the project. B. Procurement of Goods, Works and Consulting Services

33. Procurement. In addition to preparatory works, there will be three major construction packages comprising (i) part A: hydropower’s headworks, (ii) part B: hydropower’s equipment and powerhouse, (iii) part C: transmission and rural electrification. The cost breakdown for procurement packages is in Appendix 7. The part A will be jointly financed by ADB, ADFD, and EIB, and the part B will be separately financed by JICA in a parallel basis. Part C will also be financed by ADB. 34. The procurement under ADB financing will follow international competitive bidding in compliance with ADB Procurement Guidelines (2010, as amended from time to time).4 As a condition for providing cofinancing resources for part A (to be procured as a single contract package financed jointly by ADB), ADFD and EIB, ADFD and EIB require that ADB waives its member country procurement eligibility restrictions, such that countries that are eligible sources of procurement under ADFD-financed or EIB-financed procurement are also eligible sources of procurement in respect this contract package. Therefore, it is proposed that the board approve such a waiver. The part B will follow JICA’s Procurement Guidelines and procured separately under an ICB arrangement. 35. THL, as the newly incorporated company, has no track record on procurement. It will need extensive external support. This will be provided through the supervision firm and other consultants. 36. The project’s construction period is expected to be 7 years including one and half year project site development to build access roads and bridge prior to the main construction works. The government will ensure adequate budgetary allocation to complete the site development on time. The procurement for the site development will be undertaken by THL through national competitive bidding procedures acceptable to ADB. 37. An 18-month procurement plan is summarized in Section C and the consulting services terms of reference are given in Section D. All consulting firms and nongovernment organizations (NGOs) will be recruited using a quality and cost-based selection method in accordance with ADB’s Guidelines on the Use of Consultants (2010, as amended from time to time).

4 While the bidding documents for the package, including any prequalification documents will follow ADB’s standard

bidding and prequalification documents for the part A: hydropower’s headworks, EIB will assist THL with the publication of the procurement notice in the Official Journal of the EU, and may require the executing agency to insert the covenant of integrity in the form attached as an additional document to be submitted by bidders.

23

C. Procurement Plan

Basic Data

Project Name Nepal Tanahu Hydropower Project Country Nepal Executing Agency Nepal Electricity Authority (NEA),

Tanahu Hydropower Ltd. (THL) Financing Amount $150 million Loan Number XXXXXXXXXXX Date of First Procurement Plan 02 June 2012 Date of this Procurement Plan 28 January 2013

A. Process Thresholds, Review, and 18-Month Procurement Plan

1. Project Procurement Thresholds

38. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to the procurement of goods, works and consulting services.

Procurement of Goods, Works, and Consulting Services

Procurement Method Threshold Procurement of Works and Goods

International Competitive Bidding (ICB) for Works At least $1,000,000 International Competitive Bidding for Goods At least $500,000 National Competitive Bidding (NCB) for Works Beneath that stated for ICB, Works National Competitive Bidding for Goods Beneath that stated for ICB, Goods Shopping for Works Below $100,000 Shopping for Goods Below $100,000

2. ADB Prior or Post Review

39. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the Project.

Procurement Method Prior or Post Comments

Procurement of Works and Goods

ICB (goods) Prior ICB (works) Prior ICB (Plant/ Turnkey) Prior NCB (works) Post

Recruitment of Consulting Firms

Quality and Cost Based Selection (QCBS) Prior ADB’s assistance for Project Management Consultant selection

Recruitment of Individual Consultants Prior

3. Goods and Works Contracts Estimated to Cost More Than $1 Million

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

24

General Description

Contract Value

(US$ mil)

Procurement Method

Prequalification of Bidders

(Y/N)

Advertisement Date

(Quarter)

Comments

A1 Construction of Headworks

132.0 ICB (Works) Y 3rd

Quarter 13

Funded by ADB, EIB, ADFD and

GON A2: Waterway, Powerhouse and related Equipment

166.4 JICA’s

guidelines Y 3

rd Quarter 13

Funded by JICA and

GON A3: Access Road and Bridge

10.0 Government’s

guidelines N 2

nd Quarter 13

Funded by GON

A4: Adit Excavation 0.9 NCB (Works) N 1st Quarter 13

Funded by ADB

4. Consulting Services Contracts Estimated to Cost More Than $ 100,000

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

General Description Contract

Value (US$ mil)

Recruitment Method

Advertisement Date

(quarter/year)

International or National Assignment

Comments

Project Supervision Consulting Services for Tanahu HPP

17.9 QCBS 90:10

1st Quarter 13 International

Funded by ADB

Consulting Services for Community Development

3.3 QCBS 90:10

2nd

Quarter 13 International /national

Funded by ADB

Consulting Service for Rock Mechanical Test

1.9 QCBS 90:10

3rd

Quarter 13 International Funded by ADB

Social safeguards Monitoring and Implementation

0.4 Individuals 2nd


Funded by ADB

Environment management Implementation

2.5 Individuals 2nd


Funded by ADB

Panel of Experts (POE)

1.0 Individuals 2nd

Quarter 13 International Funded by ADB

5. Goods and Works Contracts Estimated to Cost Less than $1 Million and

Consulting Services Contracts Less than $100,000 42. The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

General Description Value of

Contracts (cumulative, $ mil)

Number of Contracts

Procurement / Recruitment

Method Comments

Vehicles 0.4 several Shopping Environmental Service

Equipments 0.2 several Shopping

25

B. Indicative List of Packages Required Under the Project

43. The following table provides an indicative list of all procurement (goods, works, and consulting services) over the life of the Project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

Contract Item

Estimated Value

Domestic Procurement Comments

No. ($ mil) Preference Mode

Procurement

Part A Hydropower Structure

A-1 Construction of Headworks

132.0 N ICB ADB, EIB

ADFD, and GON

A-2 Waterway, Powerhouse and related Equipment

166.4 N JICA’s

guidelines JICA and

GON

A-3 Access Roads/ Bridge 10.0 N GON’s

guidelines GON

A-4 Adit Excavation 0.9 N NCB ADB and GON

Part B

Transmission Line and Associated substation and Rural Electrification

24.2 Y ICB ADB and GON

Subtotal: Procurement 333.5

Contract Item

Estimated Value

Recruitment Type of Comments

No. ($ mil) Method Proposal

Consulting Services

A-a Project Supervision Consulting services for Tanahu HPP

17.9 QCBS 90:10

FTP ADB

A-b Consulting Services for Community Development

3.3 QCBS 90:10

FTP ADB

A-c Consulting Service for Rock Mechanical Test

1.9 QCBS 90:10

FTP ADB

A-d Social Safeguards Monitoring and Implementation Support

0.4 Individual ADB

A-e Environmental Management Plan and Implementation Support

2.5 Individual ADB

A-f Panel of Experts 1.0 Individual ADB

Subtotal: Consulting Services 27.0

Total Cost: 360.5

26

C. National Competitive Bidding (NCB Annex)

44. National competitive bidding (NCB) shall be in accordance with that described as "by inviting bids and a national level" as set forth in "The Public Procurement Act, 2007" (PPA), "The Public Procurement Regulations, 2007" (PPR), and/or ―The NEA Financial Administration Regulations, 2068‖, as applicable, and subject to the following:

(i) The first NCB document for both goods and works procurement shall be reviewed and approved by ADB prior to issue. These will be used for all NCB procurement under the project. The document shall include qualification and evaluation criteria and ADB's right to audit and inspect in accordance with para 1.14 of ADB's Procurement Guidelines. No other criteria other than that described in the bidding document may be used to determine the lowest evaluated responsive bidder and no form of domestic preference may be employed. A positive assessment of a bidder's qualifications to perform a contract will be a pre-requisite to an award.

(ii) All qualified ADB member bidders and ADB member produced goods, services and works shall be eligible. Registration and licensing shall be permitted only as a condition of contract award and not participation in bidding. No award may be withdrawn for failure to obtain tax registration; license or fulfill any similar requirement without ADB's prior concurrence. No bidder will be held ineligible based on provision 63 of the PPA without ADB prior concurrence.

(iii) Invitations to bid shall be advertised in at least one widely circulated national daily newspaper or freely accessible, nationally-known website allowing a minimum of twenty-eight (28) days for the preparation and submission of bids. Invitations for bids for contracts estimated at $500,000 or more for goods and $1,000,000 or more for civil works shall be advertised on ADB’s website. No restriction will be placed on the sale of bidding documents.

(iv) The approved Standing List of a Procuring Entity prepared in accordance with the law shall only be accepted to supplement an advertised open pre-qualification exercise for the specific contract provided that those on the standing list meet the qualification criteria.

(v) Bids shall be opened at a single location immediately after the deadline for submission. Multiple locations for submission and opening are not acceptable.

(vi) Government-owned enterprises in Nepal shall be eligible to participate only if they meet the conditions of para 1.8 (c) of the Procurement Guidelines.

(vii) Extension of bid validity of more than 4 weeks beyond the original validity shall not be allowed without the prior concurrence of ADB.

(viii) Cancellation of bidding and re-bidding shall not be carried out without the prior concurrence of ADB.

(ix) Percentage variations from rates fixed by a district rate fixation committee shall not be used for the purpose of evaluating bids.

45. In the event of a conflict between these provisions and the law, these provisions shall prevail.

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D. Consultant's Terms of Reference

46. The outline Terms of Reference for (i) project supervision, (ii) community development strategy, (iii) CDTA to be attached to ADB loans, (iv) rock mechanical test, (v) panel of experts, and (vi) monitoring and supporting of land acquisition and resettlement are in Appendix 8, 9, 10, 11, 12 and 13, respectively. The TOR for environmental monitoring and implementation support is included in the EMP.

VII. SAFEGUARDS

47. The project is classified as A for involuntary resettlement (IR), indigenous peoples (IP) and environment. In accordance with ADB’s Safeguard Policy Statement (2009), a resettlement framework and an indigenous peoples planning framework have been formulated.5 Both IR and IP impacts of the project have been addressed in a draft resettlement and indigenous peoples plan (RIPP) which combined IR with IP planning issues and mitigation actions. The government approved an environmental impact assessment (EIA) and initial environmental examination (IEE) for the hydropower and transmission components in 2009 and 2010 respectively. To comply with ADB requirements, their environmental addendum and a separate IEE for rural electrification were also prepared based on additional environmental surveys and information. The environmental management plan (EMP) includes a wide range of activities for quality monitoring, physical mitigation schemes, and biological mitigation programs for aquatic and terrestrial faunas, flora, and hydrological impacts in both upstream and downstream. 48. As the EAs of the project, the NEA/THL will ensure the timely and adequate implementation of EMP and RIPP for each component of the project, and will ensure that all activities comply with the applicable national and local environmental laws and regulations, in addition to ADB’s Safeguard Policy Statement (2009). In the event a sub component requires modifications to its design or configuration prior or during project construction, NEA/THL will ensure to prepare and update the EIA, IEE, EMP and RIPP accordingly, and will submit these documents to ADB for approval and clearance. NEA/THL will ensure that all construction-based contracts are implemented in an environmentally and socially sustainable and responsible manner. Contracts shall include provisions that comply with host country employment laws and ADB guidance on labor standards, including fair wages; reasonable occupational health and safety standards in the workplace; the provision of acceptable working conditions and practices; the prohibition of forced and compulsory labor and of child labor; equal opportunity, gender inclusive and pro-poor employment targets; equal pay for equal work; the deterrence of discriminatory practices on the basis of sex, ethnicity or caste; public awareness and sensitization of the risks and prevention of the spread of HIV/AIDS; and any requirements described in EIA, IEE, EMP, RIPP, and a gender equality and social inclusion action plan. NEA/THL will be responsible to ensure these measures, which monitoring will be reported to ADB in the project progress reports if any issues. 49. Environmental safeguards. The mitigation measures will be incorporated into the contractor’s contract documents. NEA/THL will monitor, audit, and report to ADB on the implementation of the EMP for each component quarterly during construction and annually during operation. Summary appraisal reports will be submitted to ADB subsequent to the NEA/THL’s approval.

5 The resettlement and indigenous planning requirements will guide social safeguard planning documents required

for the transmission and rural electrification components.

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50. Safeguard consultants/experts will be contracted to develop/update and implement the various environmental programs with local agencies and NGOs as needed to provide planning, supervision, and advisory services.6 51. The contractor shall prepare and submit quarterly progress reports in conformance with the EMP to THL/NEA and shall indicate when, how and at what cost the contractors plan to satisfy the requirements as per detailed design. The construction schedules shall detail the resources to be provided or utilized and any related sub contracting proposed. 52. Social safeguards. NEA/THL and its contractors will be responsible for designing and implementing culturally acceptable and sensitive measures to manage and address significant community, health, safety, and labor issues, in consultation with locally affected peoples, and in accordance with national laws and ADB safeguard requirements. 53. Involuntary resettlement activities, and those associated with impacts to indigenous peoples, will be implemented in accordance with host country laws and regulations and ADB safeguard policy requirements, including loan provisions and covenants as stated herein. Implementation of activities is the sole responsibility of NEA/THL and shall be closely monitored by the responsible party. Performance shall be reported back to the ADB on a quarterly basis. During this process, NEA/THL will ensure to improve or at least restore the quality of life of all displaced and affected persons. 54. Where construction works require large numbers of workers, especially migratory (from areas other than the host community), NEA/THL will impart HIV/AIDS awareness campaigns to prevent and control its spread to others during the duration of construction works. Campaigns will include information disclosure of the risks and methods of prevention to women and girls in the local community. The project will not hire child workers for any project related activities and NEA/THL will ensure that workers are not bonded or forced laborers. 55. To enhance THL’s and NEA’s corporate governance and project implementation capacity, the CDTA will further help THL establish commercially-oriented corporate policies and practices for procurement, human resources, financial management, and information systems.7 The project has also provisioned for an independent panel of experts (POE) for the project review and feedback particularly on dam safety and social and environmental safeguards. POE members will be selected in 2013 as early as possible.

VIII. GENDER AND SOCIAL DIMENSIONS

56. Based on social and poverty survey and assessment carried out in the project area, the community development strategy (CDS) is designed to increase the involvement of socioeconomically vulnerable persons including women, children, and socially excluded groups. CDS aims to enhance livelihood and improve quality of life of communities residing in the project area affected with direct adverse impacts. As social corporate responsibilities separate

6 These activities will include (a) fisheries management program including the fish hatchery and fish habitat

management program for the Seti and Madi rivers; (b) compensatory afforestation program including nursery and seedling development and replanting program; (c) watershed management plan including erosion control and pollution abatement in the catchment area; (d) wildlife conservation and awareness program; (e) water quality assessment and management plan; (f) river safety program; (g) public communications plan; (h) construction environmental management plan. Implementation of these major plans and programs will need consultation with ADB. 7 THL will strengthen its own man power following its staffing plan.

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from compensation, THL will implement CDS with emphasis on education, health, gender development, inclusion of socially excluded groups, and local economic development and livelihood promotion through consultancy engagement with an anchor NGO/consulting firm with field-based partner NGOs.8 Along with CDS, a gender equality and social inclusion action plan (GESI) will be implemented to empower and increase women’s participation, roles and status in their families and communities; the project is classified as effective gender mainstreaming.9 Besides CDS and GESI, rural electrification will be benefited from the project to households of the project and its neighboring areas in the district. NEA will provide a scheme where poor rural households will be permitted to pay connection fees in installments with the criteria to be set for NEA’s corporate social safeguard policy 57. GESI has been prepared for the project and the NEA/THL will be responsible for overseeing the timely and appropriate implementation of the GESI and any other technical assistance that may be mobilized for the project to optimize social and gender benefits. All consultative and participatory processes will be socially and gender inclusive, ensure timely disclosure of information, be factually accurate, and provide a platform for open, fair and transparent dialogue and communication. Implementation of consultation and participatory approaches will be the responsibility of the NEA/THL and the project implementation and monitoring units. Results from the consultation and participation process will inform project development and will be monitored on a periodic basis and reported back to ADB as and when required. The GESI will enable poor women and men’s participation in the energy sector projects, through the provision of technical and skills training increase employment opportunities and energy-related livelihood and entrepreneurial activities. The NEA/THL will receive capacity development on how to improve gender equity and community participation in the project. Training will aim to pilot and replicate a resource for the energy sector in Nepal. NEA/THL shall ensure that implementation of core labor standards and dissemination of information on sexually transmitted diseases including HIV/AIDS to employees and local communities surrounding the facilities is closely monitored, and progress is reported to ADB periodically. The participation of locally affected people, particularly poor female-headed households will be given special priority during project implementation. A gender-mainstreamed project performance monitoring system (PPMS) will monitor GESI implementation and assess social and gender impacts of the project. Reporting on the GESI will be annually based during implementation. 58. The project is classified as ―Effective Gender Mainstreaming (EGM)‖ category according to ADB’s Guidelines for Gender Mainstreaming. The GESI seeks to empower women by increasing awareness of their rights, knowledge and economic development through access to energy based resources, opportunities, and services. The GESI is provided below:

8 The programs will emphasize awareness, accessibility, empowerment, employability, vocational skill enhancement,

or micro enterprise development in a participatory approach. After implementation of the project focused CDS, the community development and benefit sharing will sustainably be continued through royalty allocation from the project revenue to VDCs, which scheme is regulated in the Local Self-governance Act.

9 Refer to the Gender Equality and Social Inclusion Action Plan; and Summary Poverty Reduction and Social

Strategy.

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GENDER EQUALITY AND SOCIAL INCLUSION ACTION PLAN (GESIAP) 1

Outputs Activities and Targets Timeline Responsible

Output I: Hydropower plant and transmission system made operational

1.1 Participatory and meaningful consultation, information sharing and grievance redressal

Three broad-based participatory and socially inclusive consultations2 on GESI and CDS goals, objectives, and status in each VDC as defined in the project area (PA)3 and at different stages of implementation (6 years). Target:4 participation of minimum 1,000 peoples; 60% women/socially excluded persons5

(SEP)

Gender Equity Awareness Consultations on gender equality, empowerment, legal entitlements and rights of girls/women. Target: 1,000 people; 50% women and 50% men

Grievances from women and SEP are to be collected and recorded separately by women mobilizers. Target: 18 qualified woman representative/community mobilizers to be hired locally to carry out this task. Each must have good ability to interact and communicate

Year 1–6 Project planning, preparation and construction phases Year 1 begins after the recruitment of the service provider (late 2013 – early 2014)

Activities funded under Community Development Strategy (CDS) EA/Anchor/Field level Service Provider6

1.2 Facilitating access to local jobs, and creating gender and socially inclusive workplaces

Prepare an inventory of (i) local people interested/available to work on the project (ii) their existing skill levels and (iii) required training needs in the PA. Target: 700 men/300 women

Skilled and unskilled employment opportunities in the PA.7 Target: 1,000 local jobs; 30% women Collect/monitor/evaluate sex disaggregated data on the local workforce. Target: 6 indicators: (i)

gender, (ii) job function, (iii) education and skills level, (iv) hourly pay/monthly wages, (v) duration of employment, (vi) training received

Work sites to have segregated toilet facilities for women. Target: 1 toilet for every 35 workers8

Year 1–6 Project planning, preparation and construction phases

Activities funded under civil work contracts EA/Anchor/Field level Service Provider

1.3 Restoring livelihoods affected by resettlement with new skills training

Life and financial management skills training to be provided to displaced households (HH), including all physically displaced HH and female-headed HH (FHH)9, some living below the poverty line. Target: 758 HH; at least 70% will have joint participation man/woman

Vocational training provided to eligible HH on new skills supporting project jobs/opportunities. Training opportunities and potential trainees will be identified following needs assessment carried out across the project area. Target: 1,000 persons; 60% woman/SEP (600)

Year 1–6 Project planning, preparation and construction phases

Activities funded under CDS and Resettlement Plan (RP). EA/Anchor/Field level Service Provider

Output II: Rural electrification increased10

2.1 Increased access to electricity and creation of energy

Additional 17,63611 households electrified through the rural electrification scheme. Target: benefiting approximately 100,00012 persons; of which there are an including 50,000 women13 and estimated 1,700 FHH14.

Year 4-6 Activities funded under NEA rural electrification program.

1 Most GESI outputs will be funded under the Community Development Strategy (CDS). Output 1.3 relates to activities in support of resettlement and livelihood restoration activities, as outlined in

the project Resettlement Plan (RP). 2 The objective of the consultations will be to disseminate information and engender interest and participation of community members in the implementation of CDS and GESI activities. 3 For CDS and GESI purposes, eligible peoples and households are those found inside the project area (PA), comprised of 24 wards spanning across eight village development committees (VDCs)

and one municipality within Tanahu District. At least 3,732 HH will be eligible to benefit from CDS/GESI activities. 4 The target reflects the minimum number of peoples that the project will aim to benefit, in line with CDS objectives and budgets. 5 SEP - Socially excluded persons are defined as those suffering the effects of marginalization within or outside their community due to their ethnicity, religion, gender, caste, disability, health,

education or socio-economic status. For the purpose of this project, this specifically includes Dalit, Janajati, disabled and any marginalized group who is politically, socially or economically excluded, including girls/women.

6 The CDS activities will be carried out by an anchor national NGO/Firm, known as the service provider, who in turn will hire local NGO partners. 7 For the purpose of this project, local peoples shall be defined as those who can show formal and legitimate proof of being from or permanently residing in the PA at the time of hire. THL will

decide what constitutes as ―formal and legitimate‖ proof of residence. 8 According to the US Department of Labor, Occupational Health and Safety Administration (OSHA), an indicative ratio is one toilet facility per every 20 workers. 9 FHH include single, widowed, and deserted women. 10 The rural electrification component will enable over 17,000 rural households to gain access to electricity. Benefits will be funded under the NEA program.

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Outputs Activities and Targets Timeline Responsible

based livelihoods

Eligible households taking up connections under the RE scheme shall be given access to micro-finance assistance for enterprise development. Target: 1,000 persons; 60% women/SEP (600) at the PA

Financial and administration skills training and market assistance will also be provided as part of the initiative. Target: 1,000 persons; 60% women/SEP (600) at the PA

EA/Anchor/Field level Service Provider

Output III: Community development program in the project area implemented

3.1 Social and gender inclusive community development: through creation of opportunities and enhancement of skills, income generation, education, and health

Assess baseline conditions and livelihood benefit opportunities in the PA at the onset of community development planning and implementation process. Target: minimum 750 HH to be surveyed for baseline studies; 3,732 HH (including 12,000 women) to be benefited upon evaluation

Training on informal cottage industry skills and opportunities, including sewing, arts and crafts, veterinary services, agro-forestry, etc. as relevant. Target: 1,000 people; 60% women/SEP

Micro Enterprise Development training and financial support through seed capital. Target: min. 1,000 persons; 60% women/SEP

Support the formation/affiliation to ―skills and knowledge-based‖ community groups (e.g., SHGs, CSOs, CBOs) supporting (i) health, (ii) agriculture, (iii) cottage industries and micro-enterprises, (iv) access to markets, etc. Target: minimum 9 groups, 1 in each VDC/eligible municipality. Participation should be promoted to achieve as much critical mass as possible

Establishment/training and promotion of self help groups (SHG) for credit and savings activities across each AA (8). Target: 40 SHGs (across each of the VDC’s/eligible municipality), 100% women

Establish campaigns to raise awareness about basic health, safety, hygiene and nutrition issues, with a special focus on improving the quality of life of girls/women (pre/post maternal care), infants, the elderly and the poor. Target: 1,000 persons; 60% girls/women

Conduct literacy campaigns and carry out programs to increase people’s access to education. Target: 1,000 eligible persons; 60% girls/women/SEP

Monitor and evaluate the results of the implementation of the CDS, by documenting challenges, opportunities, successes, recommendations and lessons learnt. Include social and gender inclusive indicators to report on

Year 1-6 Activities are to be defined at the onset of CD activities during year 1

Activities funded under CDS. EA/Anchor/Field level Service Provider

Output V: Other sector reforms undertaken

5.1 Project management, monitoring and evaluation

Data disaggregated by sex, caste, and ethnicity, specific parameters (outputs/outcomes), and indicators established at the onset of implementation, monitored against baseline conditions and reported on an annual basis, focusing on improvements to quality of life parameters

THL’s comprehensive corporate policies, using commercial principles and informed by GESI considerations (including assessments on resettlement and activities focused on women’s entitlements to compensation and livelihood benefits) established by 2015

Year 2 - 6 Activities funded under RP and CDS. EA/Anchor/Field level Service Provider

11 According to baseline collected for the hydropower project, it is assumed the average household has 6 members. The estimated number of eligible beneficiaries (under the CDS and/or the RE

component) is calculated by multiplying the total number of households by 6. 12 The figure is calculated by multiplying the estimated number of electrified households by the estimated number of persons per household. 13

Based on poverty and social assessment for the project, the primary beneficiary from electricity use is targeted on women over studying and working population. 14 Based on baseline collected on the HEP project, approximately 10% of the population surveyed is FHH, per the definition used herein in footnote 9.

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IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION

A. Project Design and Monitoring Framework

DESIGN AND MONITORING FRAMEWORK

Design Summary Performance Targets and Indicators with Baselines

Data Sources and Reporting

Mechanisms Assumptions and Risks Impact Assumptions

Expanded access to clean and sustainable energy in Nepal

Hydropower generation capacity increased to 2,000 MW by 2023 (2012 baseline: 706 MW)

NEA’s annual report

An enabling regulatory environment is given to ensure a viable power industry, including a tariff-setting policy. Users of diesel-based generators shift to clean energy sources.

Risks

An undue security situation occurs.

On-grid access to electricity increased to 70% of households by 2023 (2011 baseline: 34%) Fossil fuel imports reduced by 50% by cutting dependence on diesel generators by 2023 (2011 baseline: 531 MW equivalent)

NEA’s annual report Nepal Oil Corporation’s assessment report

National carbon dioxide (CO2) emissions reduced by an additional 99,766 tons (t) per year by 2023 a


Outcome Assumptions

Increased efficiency and supply of reliable hydropower energy

Increase in hydropower capacity available year-round to 246 MW in 2020 (2012 baseline: 92 MW) Increase in additional electricity generation of 588 GWh/year from the Tanahu hydropower plant in 2020



Adequate overall transmission system capacity is available to supply power from the Tanahu hydropower plant The government's policy on and commitment to rapid hydropower development continues.

Winter’s power shortage alleviated by 2020 (from the load shedding of 14–18 hours a day in 2011 to less than 10 hours in 2020)


Outputs Assumptions

1. Hydropower plant and transmission system made operational

140 MW hydropower plant constructed by 2020 37 km transmission line and a 220 kV substation constructed to evacuate the plant’s power by 2020

THL’s quarterly progress reports THL’s quarterly progress reports

Timely availability of cofinancing from ADFD, EIB, and JICA Government mobilizes counterpart funds on time. Autonomous regulator’s position is assured for ETFC.

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Design Summary Performance Targets and Indicators with Baselines

Data Sources and Reporting

Mechanisms Assumptions and Risks 2. Rural electrification

increased

Skilled and unskilled work opportunities with 1,000 new jobs created (30% women) At least 17,636 households connected to power supply by 2020 (including 50,000 women)

THL’s quarterly progress reports NEA’s quarterly progress reports

Risks Prices of construction materials increase more than provisioned. Natural disaster and geological conditions during implementation cause unexpected construction delays.

3. Community development program in the project area implemented

4. NEA restructured 5. Other sector

reforms undertaken 6. Equity sales scheme for hydropower development initiated

3,732 households benefited from community development strategy programs by 2020 (including 12,000 women) NEA’s financial restructuring plan implemented by 2014 Possible spin-off and/or restructuring of selected NEA assets by 2015 NEA’s management program developed by 2015 Revised tariff regulations and cost recovery mechanism for distribution, transmission, and generation issued by 2015 THL’s corporate policies informed by gender equality and social inclusion action plan considerations, established by 2014 A divestment program for THL, including the sale of equity in THL, prepared by 2016

THL’s quarterly progress reports TA quarterly progress report for NEA TA quarterly progress report for NEA TA quarterly progress report for NEA TA quarterly progress report for ETFC or regulator TA quarterly progress report for THL TA quarterly progress report for THL

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Activities with Milestones Inputs

1. Hydropower plant and transmission system made operational 1.1. Procure 140 MW hydropower plant: bid floated by 2013 and

contract awards made by 2014 1.2. Acquire land and prepare the site, including access roads, by 2014 1.3. Procure 220 kV transmission line: bid floated by 2014 and contract

awarded by 2015 1.4. Commission 140 MW hydropower plant by 2020 1.5. Commission 37 km of 220 kV transmission line by 2020

2. Rural electrification increased 2.1. Procure rural electrification investment packages by 2015 2.2. Complete rural electrification system investments by 2020

3. Community development program in the project area implemented

3.1. Recruit consultant to help with community program by 2013 3.2. Implement training and/or consultations for livelihood program in

place by 2014

4. Nepal Electricity Authority restructured 4.1. Recruit consultant by 2013 4.2. Obtain the government’s approval to implement NEA financial

restructuring plan by July 2014 4.3. Finalize the spin-off and/or restructuring plan of selected NEA

assets by July 2015 4.4. Finalize institutional restructuring plan of NEA by July 2015

5. Other sector reforms undertaken 5.1. Obtain the government’s approval of a revised tariff regime by July

2015 5.2. Finalize ETFC’s and NEA’s training for tariff setting by July 2015 5.3. Define a THL commercial and operational plan by July 2014 5.4. Finalize THL’s human resources plan by July 2014 5.5. Finalize NEA’s and THL’s corporate policies and guidelines for

gender and socially inclusive community development, benefit sharing, and safeguards by July 2014

5.6. Implement THL and NEA staff training on contract management, monitoring and reporting, and communications with stakeholders by July 2014

6. Equity sale scheme for hydropower development initiated 6.1. Prepare draft equity sale scheme for THL by 2015 6.2. Test the market for prospective THL equity sale by 2016

Loans

ADB: $150 million ADFD: $30 million EIB: $70 million JICA: $184 million


Hydropower plant 288 Transmission system 15 Rural electrification 8 Land acquisition and resettlement

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Project management and community development

25

Others (preparatory works) 3 Contingencies 56 Financing charges during implementation

12

Government of Nepal: $71 million


Land acquisition and resettlement

3

Environmental mitigation plan

21

Others (preparatory and overhead costs, taxes and duties)

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Contingencies 2 Financing charges during implementation

2

Technical Assistance

Japan Fund for Poverty Reduction: $1.5 million

The government will provide counterpart support in the form of in-kind contributions.

ADB = Asian Development Bank, ADFD = Abu Dhabi fund for Development, CDTA = capacity development technical assistance, CDS = community development strategy, DOED = Department of Electricity Development, EIB = European Development Bank, ETFC = Electricity Tariff Fixation Commission, GESI = gender and social inclusion action plan, JICA = Japan International Cooperation Agency, JFPR = Japan Fund for Poverty Reduction, NEA = Nepal Electricity Authority, PPP = public and private partnership, THL = Tanahu Hydropower Limited. a Taking into account the energy mixture of Nepal’s grid, the grid emission factor of 169.67 tCO2/GWh is assumed as a baseline.

Source: Asian Development Bank. 59. Project performance monitoring. NEA/THL will undertake overall monitoring of the project in terms of progress. ADB, the government and NEA/THL will conduct semiannual reviews throughout the implementation of the project. The review will monitor the (i) project output quality, (ii) implementation arrangements, (iii) implementation progress, and (iv) disbursements. Performance will be monitored based on indicators and targets stipulated in the design and monitoring framework.

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60. Compliance monitoring. In addition to the standard assurances, compliance with the specific assurances will be monitored. They will be based on the financing agreement and project agreement as well as consulting services, procurement and disbursement guidelines. For safeguard compliance, experts from NGOs/civil society organizations will be engaged as needed to provide planning, supervision, and advisory services. The EA will also engage an independent POE for the project. All consultants to be supported by ADB finance will be recruited according to ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). The procurement of goods, related services, and works finance by ADB will follow procedures outlined in the ADB's Procurement Guidelines (2010 as amended from time to time).36 The ADB financing proceeds will be disbursed in accordance with ADB's Loan Disbursement Handbook (2012, as amended from time to time) while each cofinancing proceeds will be disbursed in accordance with each cofinancier’s disbursement guideline.

B. Evaluation

61. ADB will field regular review missions every six months at the minimum to review status of contract awards, disbursements, physical progress, and implementation of the environmental management plan and resettlement plans. Within 6 months of physical completion of the project, NEA/THL will submit the project completion report (PCR) to ADB. Subsequently, ADB will field a mission to finalize the PCR.

Table 1: Evaluation Methodology Evaluation Activity Purpose Methodology Who responsible

and involved Review Mission Review the progress of

the project and provide guidance to facilitate implementation

Site visits and meetings with NEA/THL officials, contractors, consultants at least twice a year

ADB/NEA/THL

Mid Term Review Comprehensive review of the project

Conducted in two years from the financing effective date, to assess the project’s achievements and progress against the project implementation schedule in order to identify any difficulties or constraints encountered in implementing the project and to make adjustments, if necessary, for the remaining project implementation period.

ADB/NEA/THL

Project completion report

Evaluate the overall output of the project and its relevance and suitability

Site visit and meetings with NEA officials, contractors, consultants

ADB/NEA/THL

ADB = Asian Development Bank, NEA = Nepal Electricity Authority, THL = Tanahu Hydropower Limited

C. Reporting

62. NEA/THL will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) quarterly monitoring reports on safeguards implementation (i.e., environmental management plan, resettlement and indigenous peoples plan) during construction and annually during operation; and (iii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated procurement plan, and (d) updated implementation plan for next 12 months; and

36

Refer to para 35 incase the procurement is financed by ADB, ADFD, and EIB.

36

(iv) a project completion report within 6 months of physical completion of the project. To ensure projects continue to be both viable and sustainable, project accounts and the financial statements, together with the associated auditor's report, should be adequately reviewed.

D. Stakeholder Communication Strategy

63. The Stakeholder Communications Strategy is described in the following table. NEA/THL will post all relevant information on their websites. The website will include at minimum information regarding the bidding process, bidders, contract awards, use of funds disbursed under the project and physical progress.

Table 2: Stakeholder Communication Strategy

Project information to be communicated

Means of Communication

Responsibility Audience Frequency

Report and Recommendation of the President (RRP) with linked documents

ADB website ADB ADB, Government of Nepal, Development Partners, Civil Society, Individuals

Once

Project information while planning/ designing

Discussions and stakeholder consultations

NEA/THL Project beneficiaries

Regular intervals during planning and design

Status of implementation during construction

Boards at site NEA/ Contractors Project beneficiaries

All the time at construction sites

Project Performance Reports and Project Information Documents

ADB website ADB ADB, Government of Nepal Development Partners, Civil Society, Individuals

Quarterly

Safeguards Monitoring during Implementation (i.e., Environmental and Social Monitoring Report)

ADB website ADB and NEA/THL ADB, Government of Nepal, Development Partners, Civil Society, Individuals

Quarterly during construction, and annually during operation

Updated and final version of combined resettlement plan and indigenous peoples plan

ADB website ADB and NEA/THL ADB, Project stakeholders, civil society, development partners, NGOs

Once

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Project information to be communicated

Means of Communication

Responsibility Audience Frequency

Monthly progress reports

Website of EA NEA/THL ADB, Government of Nepal Development Partners, Civil Society, Individuals

Monthly

Project completion report

ADB website ADB ADB, Government of Nepal Development Partners, Civil Society, Individuals

Once

ADB = Asian Development Bank, NEA = Nepal Electricity Authority, THL = Tanahu Hydropower Limited

X. ANTICORRUPTION POLICY

64. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project. All contracts financed by ADB will include provisions specifying the right of ADB to investigate (with any audit through the government’s authorized auditor) and examine the records and accounts of NEA/THL; and all project contractors, suppliers, consultants, other service providers, individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activities and may not be awarded any contracts under the project. To support these efforts, relevant provisions are included in the financing and project agreements and the bidding documents for the project. 65. The government of Nepal and NEA/THL will ensure that (i) the project is carried out in compliance with all applicable Nepal anticorruption regulations and ADB’s Anticorruption Policy, including cooperating fully with any investigation by ADB directly or indirectly of any alleged corrupt, fraudulent, collusive, or coercive practices relating to the project; and (ii) all relevant staff actively participate in training in Nepal's anticorruption regulations and ADB’s Anticorruption Policy. 66. In accordance with ADB requirements, an assessment in the areas of public financial management, procurement, and anticorruption was undertaken. Certain governance, fiduciary, and anticorruption safeguards have been incorporated into the project to mitigate the risk of diversion of funds and to enhance and strengthen governance, accountability, and transparency. In particular, such transparency and accountability measures include (i) establishment of a publicly accessible project website within the existing NEA website and THL’s website wherein the government will disclose key project-related information including on costs, safeguards, and procurement; and (ii) establishment of a grievance redress mechanism satisfactory to ADB for receiving and resolving stakeholder complaints. 67. The government, through NEA/THL, will ensure that a section of its website is dedicated to the project in the first year of project implementation, and that it will disclose details of the project, including the audited project financial accounts; project progress; and procurement activities including the publishing of short-lists, invitations for bid, and contract awards.

38

XI. ACCOUNTABILITY MECHANISM

68. People who are, or may in the future be, adversely affected by the project may address complaints to ADB, or request the review of ADB's compliance under the Accountability Mechanism.

XII. RECORD OF PAM CHANGES 69. To be inserted as and when any changes are necessary and agreed by both sides.

39

Appendices: Appendix-1: Detailed Project Description Appendix-2: Bidding Schedule for Major Construction Packages Appendix-3: Construction Schedule Appendix-4: Organization Chart of THL Appendix-5: Staffing Plan of THL Appendix-6: Organization Chart of NEA Appendix-7: Cost Breakdown for Procurement Packages Appendix-8: TOR for Project Supervision Consultant Appendix-9: TOR for Community Development Strategy Appendix-10: TOR for CDTA: Support for Sustainable Energy management and Reforms Appendix-11: TOR for Rock Mechanical Test Appendix-12: TOR for Panel of Experts Appendix-13: TOR for Supporting and Monitoring of Land Acquisition and Resettlement

Appendix 1

A1-1

DETAILED PROJECT DESCRIPTION

1. The Tanahu Hydropower Project (140 MW) locates on Seti river, Damauli in the Tanahu District, Nepal (Map in Annex-1). The Project is to provide stable power supply and to cope with increasing power demand in the overall country, thereby contributing to economic development, improvement of civil life, and adaptation to climate change. The detailed effects of the Project include (i) power supply during the peak hours in the dry winters as peak load power sources, (ii) replacement of diesel consumption by a cheaper and cleaner power source, (iii) stabilization of a power supply system through increased controllability and flexibility for power generation and reduced transmission losses due to proximity to the load center, and (iv) introduction of hydropower technology innovations to Nepal with their application to subsequent similar type projects. The physical activities of the Project mainly include:

1. 140MW HYDROPOWER PLANT

2. A medium size hydropower plant (Salient Features in Annex-2) with water storage will be developed to make power supply available year-round and meet the country’s peak demand in particular for the dry season. The Project is envisaged to meet the peak demand during dry season. It will be capable of supplying power for peak times throughout the year and is also capable of supplying power during off-peak times in the rainy season. As a unique feature of the Project, sediment flushing in the beginning of the rainy season will be carried out for 10 days in the initial 10 years and for 40 days in subsequent years, with a view to reducing sediment accumulated in the reservoir and consequentially keeping live storage capacity. It mainly consists of two construction packages:

A. Package 1: Headworks

3. The package includes: a) diversion tunnels and care of river; b) dam and spillway; c) reservoir slope protection; d) access roads around dam; and e) disposal area to store muck produced from headworks civil works.

4. The main specifications of the headworks are a dam of 140 m in height, 175m in crest length and approximately 800,000m3 in volume. The dam is equipped with sediment flushing facilities to discharge sediment deposited in the reservoir. These facilities will consist of two sets of inlet through the base of the dam wall in the middle of the river cross-section, with a sill level of 320 m asl. Three gates will be installed in a conduit that will be fully opened when in operation once the reservoir level is at 345 m asl or lower. The reservoir is emptied once a year and sediment is discharged through sediment flushing conduits embedded in the dam by tractive force of river flow.

B. Package 2: Waterway, Powerhouse and Equipment

5. The package includes: a) civil works for intake; headrace tunnel; headrace surge tank; penstock; draft tunnel and tunnel to draft gate chamber; tailrace tunnel; draft pond and tailrace outlet; underground powerhouse; cable tunnel and outgoing terminal; main access tunnel; access roads to tailrace outlet; disposal area to store muck produced from waterway and power house civil works; b) hydromechanical equipment: spillway gate; sediment flushing facilities; water level lowering facilities; intake gate; steel penstock; draft gates; and tailrace gates; c) Electromechanical equipment: overhead traveling crane; turbine and generators; main transformers; and maintenance flow generating facilities.

Appendix 1

A1-2

6. The main specifications of the underground power house are 27 m wide × 46 m high × 97 m long) waterway of approximately 1,500 m in length.

POWER TRANSMISSION AND RURAL ELECTRIFICATION (Package 3)

7. The new transmission line of the project will represent one of the very important steps for forming a strong 220 kV loop to enhance the power system reliability. The package includes: a) construction of the transmission line of 220 kV, double circuit and 37 km long, from the Tanahu hydropower plant to the new 220kv Bharatpur substation; b) installation of the new 220kv Bharatpur substation facilities to connect the transmission line to the existing network.

8. Rural electrification in Tanahu district is planned by NEA to supply power to people in the project-affected areas and their neighboring areas located in southern and western parts of the Tanahu district, including those not directly affected by the Project. The package includes: a) construction of two new 33/11 kV substations at Dharampani and at Majhkot, and augmentation of Jaruwa and Damauli substations; b) construction of 33kV distribution lines 48 km long, 11kV distribution lines 344 km in length and 400 V distribution lines 450 km long to distribute power to 17 village development committees (VDCs).

PREPARATORY WORKS

9. Preparatory Works include access roads from main roads to project sites, permanent bridge, temporary power supply, and NEA’s camp. The government will finance this component.

COMMUNITY DEVELOPMENT PLAN

10. The community development strategy (CDS) will be implemented for people in the hydropower affected area to recognize benefits from development of the project with long-term engagement. In the CDS, the community development program from various aspects includes education, health, gender development, social inclusion, local economic development and livelihood activities in the hydropower project affected area including 8 VDCs and 1 municipality.

SAFEGUARDS

11. Resettlement is provisioned along land acquisition for the project site and reservoir. Social safeguard activities include compensation and livelihood restoration. Environmental safeguard activities mainly include mitigation and monitoring programs of afforestation and watershed management, fish hatchery, wildlife protection, and river water safety.

Appendix 1

A1-3

Annex-1

Project Site of Tanahu Hydropower Project

Project location

Hydropower Project

Appendix 1

A1-4

Annex-2 Project Salient Features

Item Reservoir Full Supply Level 415.0 m

Minimum Operation Level 378.0 m

Available Depth 37.0 m

Sedimentation Level 320.0 m

Gross Storage Capacity 295.1 × 106 m

3

Effective Storage Capacity during first 10 years; 192.8× 106 m

3

after 11th years; 181.7 × 106 m

3

Dam Type Concrete Gravity Dam

Elevation of Dam Crest 420.0 m

Height of Dam 140.0 m

Length of Dam Crest 175.0 m

Volume of Dam 806 × 103 m

3

Sediment Flushing Facilities

Inlet Sill Elevation 320 m

Gradient of Conduit 1: 15

Upstream Maintenance GateSpan x Height

Slide Type Steel Gate 5 m x 5m

Intermediate Main Gate Span x Height

High Pressure Slide Gate 5 m x 5 m

Downstream Auxiliary Gate Span x Height

High Pressure Slide Gate 5 m x 5.2 m

Spillway Design Flood 7,377 m3/s

Type Chute

Elevation of Overflow Crest EL. 399 m

Width of Overflow Crest 49.5 m

Energy Dissipator Ski Jump

Type of Gate Radial

Size of Gate 16.5 m span x 16.5 m height Intake Number 1

Type Tower Type Intake Headrace Tunnel Number One (1)

Inner Diameter 7.4 m

Total Length 1,162 m Penstock Type Tunnel

Number One (1)

Inner Diameter 7.4 m to 3.1 m

Total Length 175 m Draft Tunnel Length 85.8 m

Tailrace Tunnel Diameter 7.4 m

Length 117 m

Powerhouse Type Underground

Size 27 m wide × 46 m high × 97 m long Development Plan Rated Intake Water level 405.0 m

Tail Water Level 289.2 m

Gross Head Rated; 115.8 m Maximum; 125.8 m

Effective Head Rated; 111.7 m Maximum; 121.55 m

Discharge Rated; 127.4 m3/s

Maximum 131.2 m3/s

Appendix 1

A1-5

Item Number of Unit Two (2)

Install Capacity 140 MW

Peak Time 6 hours

Primary Energy during first 10 years; 266.2 GWh after 11th years;241.4 GWh

Secondary Energy during first 10 years; 319.5 GWh after 11th years; 248.5 GWh

(excluding Generation Facility for Environmental Flow)

Total Energy during first 10 years; 585.7 GWh after 11th years; 489.9 GWh

(excluding Generation Facility for Environmental Flow)

Turbine Type Vertical Shaft, Francis Turbine

Number Two (2)

Maximum/Rated Output 71,800kW/64,700 kW Generator Type Three-phases, Synchronous

Generator

Number Two (2)

Maximum/Rated Output 82,300kVA/74,600kVA

Revolving Speed 300 r/min

Frequency/Voltage 50 Hz/13.2 kV

Power Factor 0.85 lag Main Transformer Type Indoor, special three-phase, Forced-

oil-circulated and forced-water-cooled

Number Two (2)

Maximum/Rated Output 82,300kVA/74,600kVA

Voltage Primary 13.2 kV

Secondary 220 kV Switchyard Type GIS (Gas Insulated Switchyard)

Bus System Double Bus

Number of Lines Connected Two (2) cct Transmission Lines

Voltage 220 kV Transmission Line Length 36.9 km

Type of Transmission Tower Steel lattice tower

Number of Circuit Two (2)

Voltage 220 kV

Conductor Type 380 mm2 × ACSR (Bison)

Generation Facility for Environmental

Flow

Rated Output 1,400 kW

Rated Effective Head 70.9 m

Discharge 2.4 m3/s

Distribution Line Voltage 11 kV or 33kV

Turbine Type Horizontal Type, Francis Turbine

Generator Type Horizontal Type, Three-phase Synchronous Generator

Average Energy During the first 10 years: 14.0GWh

After 11th years: 13.0GWh

Appendix 2

A2-1

Bidding Schedule for Major Construction Packages

No. Procedures Period J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J

(month) 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

A Package 1: Head Works (ADB)

1 Completion of Bidding Documents by PPTA team

2 Preparation of PQ documents 2.0

3 ADB's concurrence of PQ documents 1.0

4 PQ submission period 2.0

5 PQ evaluation by THL and PSC 2.0

6 Review and approval of PQ evaluation by THL board 0.5

7 ADB's concurrence of PQ evaluation 1.0

8 THL's review of bidding documents 1.0

9 PSC's review of bidding documents 2.0

10 Modification of bidding documents by PPTA team 1.0

11 ADB's concurrence of bidding documents 2.0

12 Bidding 3.0

13 Bid evaluation by THL and PSC 3.0

14 Review and approval of bid evaluation by THL board 1.0

15 ADB's concurrence of bid evaluation 2.0

16 Signing of contract by THL 1.0

17 Commencement of contract 1.0

Total

BPackage 2: Waterway, Powerhouse, Relater Equipment (JICA)

1 Completion of Bidding Documents by PPTA team

2 Preparation of PQ documents 1.5

3 JICA's concurrence of PQ documents 1.0

4 PQ submission 2.0

5 PQ evaluation by THL and PSC 1.0

6 Review and approval of PQ evaluation by THL board 0.5

7 JICA's concurrence of PQ evaluation 0.5

8 THL's review of bidding documents 1.0

9 PSC's review of bidding documents 3.0

10 Modification of bidding documents by PPTA team 1.0

11 JICA's concurrence of bidding documents 1.0

12 Bidding 3.0

13 Bid evaluation by THL and PSC (Technical) including approval by board 3.0

14 JICA's concurrence of bid evaluation(Technical) 1.0

15 Bid evaluation by THL and PMC(Finacial) including approval by board 1.5

16 JICA's concurrence of bid evaluation(Financial) 1.0

17 Contract negotiation 1.5

18 Agreement of draft contract by THL and PSC 0.5

19 JICA's concurrence of draft contract 0.5

20 Signing of contract by THL 0.0

21 L/C open, L/com issue 1.0

Total

C Package 3: Transmission Line and Rural Electrification *

PQ = Prequalification; PSC = Project Supervision Consultants; PPTA = Project Preparatory Technical Assistance; THL = Tanahu Hydropower Limited

* Bidding documents for Package 3 will be prepared by NEA in 2nd half of 2014, and floated in 2015.

2013 2014 2015

Description

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

1 2 3 4 5 6 7 8 9 # # # # # # # # 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 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89

1 THL's Preparatory Works 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 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70

Permanent Bridge

Access Road on Dam Right Bank

Access Road on Dam Left Bank

THL's Camp

Land Acquisition for main works

Power Supply System for Construction

2 Package-1 Civil Works of Headworks

2.0 Mobilization & Preparation Contract Effectiveness

Mobilization

Design and Access to Work Fronts

2.1 Diversion Tunnel

(1) Tunnel Excavation 1,178 m River Diversion

(2) Concrete Lining 1,178 m

(3) Grouting Work 1 LS

(4) Upstream Coffer Dam 1 LS

(5) Downstream Coffer Dam 1 LS Completion

(6) Plug Concrete 1 LS

2.2 Dam & Spillway

(1) Excavation ####### m3

(2) Grout Tunnel Excavation 732 m

(3) Curtain Grouting 54,619 m Start of Impounding

(4) Consolidation Grouting 14,347 m

(5) Dam & Spillway Concrete 846,290 m3 (8 months up to FSL)

(6) Sediment Flushing Equipment Installation 1 LS

(7) Water Level Lowering Equipment Installation 1 LS

(8) Environmental Flow Equipment Installation 1 LS

(9) Spillway Gate Installation 1 LS

2.3 Reservoir Slope Protection

(1) Surface Excavation 136,438 m3

(2) Backfilling 24,273 m3

(3) Gabion Mat 158,723 m3

2.4 Access Road

(1) Access Road on dam Left Bank 750 m

(2) Access Road on dam Right Bank 450 m

2.5 Disposal Area

(1) Disposal Area I 115,000 m2

(2) Disposal Area II 110,000 m2

3 Package-2 Waterway, Powerhouse and Related Equipment

3.1 Civil Works

3.1.0 Mobilization/Preparation Contract Effectiveness

Mobilization

Design and Access to Work Fronts

3.1.1 Intake

(1) Open Excavation 366,300 m3

(2) Tunnel Excavation 1 LS

(3) Tunnel Lining and grouting 1 LS

(4) Intake Tower Concrete 28,380 m3

(5) Intake Bridge 1 LS

(6) Gate & Screen Installation 1 LS

3.1.2 Headrace Tunnel

(1) Tunnel Excavation (Ascend) 1,108 m

(2) Tunnel Excavation (Descend) 95 m

(3) Tunnel Lining 1,203 m

(4) Grouting 1,203 m


3.1.3 Penstock

(1) Tunnel and Shaft Excavation 259 m

(2) Steel Liner (with Backfill Concrete) 259 m

(3) Contact Grouting 1 LS

3.1.4 Headrace Surge Tank

(1) Arch Excavation 43 m

(2) Shaft Excavation 67 m

(3) Concrete Lining 67 m

(4) Grouting 67 m

3.1.5 Powerhouse

(1) Excavation 81,700 m3

(2) Concrete 21,500 m3

(3) Architectural Work 1 LS

3.1.6 Draft Gate Chamber

(1) Tunnel Excavation 38 m

(2) Shaft Excavation 48 m

(3) Concrete 48 m

(4) Draft Gate Installation 1 LS

3.1.7 Tailrace Tunnel (including Draft Tunnel)

(1) Tunnel Excavation (Tailrace Tunnel) 190 m

(2) Tunnel Excavation (Draft Tunnel) 147 m


(4) Grouting 337 m


3.1.8 Tailrace Outlet and Draft Pond

(1) Access Road 1 LS

(2) Coffering 1 LS

(3) Open Excavation 39,400 m3



(6) Tailrace Outlet Concrete 147 m

(7) Grouting 1 LS

(8) Gate Installation 1 LS

(9) Removable of Coffer 1 LS

3.1.9 Access Tunnel and Access Adit

(1) Main Access Tunnel

Open Excavation, Portal 34,040 m3

Tunnel Excavation 837 m

Invert Concrete & Lining 837 m

(2) Draft Gate Access Tunnel 241 m

(3) Work Tunnel for Penstock 572 m

(4) Work Tunnel for Headrace Tunnel 522 m

(5) Work Tunnel for Surge Tank Arch Heading 232 m

3.1.10 Outgoing Terminal

(1) Excavation 52,500 m3

(2) Concrete Work of Control Building 1,050 m3

(3) Architectural Work of Control Building 1 LS

3.1.11 Cable Tunnel



3.1.12 Access Road

(1) Access Road on dam Right Bank to Outlet 880 m

3.1.13 Disposal Area

(1) Disposal Area III 80,000 m2

(2) Disposal Area IV 24,000 m2

(3) Disposal Area V 60,000 m2

3.2 Hydromechanical Equipment

3.2.1 Dam & Spillway

(1) Sediment Flushing Equipment Installation 1 LS

(2) Water Level Lowering Equipment Installation 1 LS

(3) Environmental Flow Equipment Installation 1 LS

(4) Spillway Gate Installation 1 LS

3.2.2 Intake

Gate & Screen Installation 1 LS

3.2.3 Penstock

Steel Liner (with Backfill Concrete) 1 LS

3.2.4 Draft Gate

Gate Installation 1 LS

3.2.5 Tailrace Outlet

Gate Installation 1 LS

3.3 Electromechanical Equipment

3.3.1 Overhead Traveling Crane 1 LS

3.3.2 #1 Unit

(1) Draft tube 1 LS

(2) Spiral casing 1 LS

(3) Inlet Valve 1 LS

(4) Runner 1 LS

(5) Stator 1 LS

(6) Rotor 1 LS Wet Test

(7) Whole Assembly, Dry and Wet Tests 1 LS

3.3.3 #2 Unit

(1) Draft tube 1 LS

(2) Spiral casing 1 LS

(3) Inlet Valve 1 LS

(4) Runner 1 LS

(5) Stator 1 LS

(6) Rotor 1 LS Wet Te

(7) Whole Assembly, Dry and Wet Tests 1 LS

3.3.4 Power Plant Equipment 1 LS

3.3.5 Main Transformer 1 LS

3.3.6 Switchyard Equipment 1 LS

3.3.7 Environmental Flow Generation Facility 1 LS

4 Package 3 Transmission line and Rural Electrificat Contract Effectiveness

1 LS

1 LS

Note: Design, Manufacturing and Transportation (including erection period of filed shop for steel penstock)

Installation, Assembly

Installation and/or assembly period of Hydromechanical Equipment indicated in 2.2 and 3.1 Civil Works (Same bars are shown in 3.2 Hydromechanical Equipment)

Land Acquisition

Quantity Unit

2013 201620152014 2020201920182017

Appendix 3

Appendix 4

A4-1

ORGANIZATION STRUCTURE OF THL

Board of Directors

Director 1 (NEA)

Director 2 (NEA)

Chairman (NEA)

Managing Director

Project Manager (PSC)

Independent Director

Director 1

if required Director 1

if required

Head HR and Admin

ED/VP Projects

ED/VP Finance

ED/VP Engineering/Tech

ED/VP O& M

ED/VP Environment, Social & Safety

1 If required, more independent directors or any minority shareholders can be nominated.

Appendix 5

A5-1

STAFFING PLAN OF THL (DURING PROJECT CONSTRUCTION)

No Position No. Joining

1 Managing Director 1 Apr'12

2 Deputy Managing Director/ President (Operations) 1 Jun'13

3 ED / VP (Projects) 1 Jun '13

4 ED / VP (Finance) 1 Jun '13

5 ED / VP (Engineering/Technical) 1 Jun '13

6 ED / VP (Environment, Social, Communication, Land) 1 Jun '13

7 Head (HR & Admn.) 1 Mar'13

8 Company Secretary 1 Jun'12

9 Assistant to Company Secretary 1 Jun'12

10 Civil Engineers 2 Jan'14

11 Electrical Engineer 1 Jan'14

12 Electromechanical Engineer 1 Jan'14

13 Hydromechanical Engineer 1 Jan'14

14 Surveyor (Temporary) 3 Jan'14

15 Inspector (Temporary) 4 Jan'14

16 Finance Officer 1 Mar'13

17 Finance Officer 1 Mar'13

18 HR 1 Mar'13

19 Administration 1 Mar'13

20 IT Engineer 1 Mar'13

21 Procurement 2 Mar'13

a Design Engineer

b Civil Engineer 1 Mar'13

c Civil Engineer 1 Mar'13

d Electromechanical Engineer 1 Mar'13

22 Hydromechanical Engineer 1 Mar'13

a Quality Assurance Engineer

b Civil Engineer 1 Apr'14

c Electromechanical Engineer 1 Apr'14

23 Hydromechanical Engineer 1 Apr'14

24 Environmental Safeguard 1 Mar'13

25 Communication Officer 1 Mar'13

26 Social Safeguard 1 Mar'13 27 Land Officer 1 Mar'13

Sub-Total 39 28 Other Non-Executive & Support Staff 39 Total 78

Appendix 6

A6-1

ORGANIZATION CHART OF NEA

NEA Board

Managing Director

MD’s Secretariat

Corporate Planning &

Monitoring

Department

Loss Control Division IT Department

Kathmandu

Regional

Office

Hetauda

Regional

Office

Biratnagar

Regional

Office

Janakpur

Regional

Office

Planning &

Technical

Service

Department

Distribution &

Consumer Services

GM

Distribution &

Consumer Services

West GM

Generation

Operation &

Maintenance GM

Generation

Construction GM

Transmission &

System Operation

GM

Grid Development

GM

Engineering

Services, GM

Administration

DMD

Finance DMD Internal Audit

DMD

Butwal

Regional

Office

Pokhara

Regional

Office

Nepalgunj

Regional

Office

Attarial

Regional

Office

Planning &

Technical

Service

Department

Large Power

Plant

Operation &

Maintenance

Department

Medium

Power Plant

Operation &

Maintenance

Department

Generation

Construction

Department

Monitoring

& Technical

Department

Grid

Operation

Department

System

Operation

Department

Power Trade

Department

System

Planning

Department

Transmission

Line

Construction

Department,

220 kV & above

Transmission

Line

Construction

Department,

up to 132 kV

Project

Development

Department

Soil, Rock &

Concrete

Laboratory

Environment

& Social Study

Department

Human

Resource

Department

General

Service

Department

Legal

Department

Training

Center

Account

Department

Corporate

Finance

Department

Revenue

Department

Economic

Analysis &

Planning

Department

Internal

Audit

Departmen

t

Appendix 7

A7-1

COST BREAKDOWN FOR PROCUREMENT PACKAGES (Excluding Taxes and Duties)

Total Foreign Local

1 Preparatory Works

1.1 Access Road on Dam Right Bank 1,585,151 0 1,585,151

1.2 Access Road on Dam Left Bank 931,970 0 931,970

1.3 Permanent Bridge 1,358,080 0 1,358,080

1.4 Temporary Power Supply 1,006,179 0 1,006,179

1.5 Camp and Office for NEA & Engineer 3,958,187 0 3,958,187

1.6 Adit Excavation (Funded by ADB) 900,000 0 900,000

Total (Funded by Government) 9,739,567 0 9,739,567

2 Headworks (Package 1)

2.1 Civil Works for Package-1

2.1.1 General Items 9,353,336 6,898,660 2,454,675

2.1.2 Diversion Tunnel & Care of River 12,014,543 9,140,175 2,874,368

2.1.3 Dam & Spillway 94,027,161 62,667,410 31,359,752

2.1.4 Reservoir Slope Protection 8,657,237 6,818,463 1,838,774

2.1.5 Access Road 595,943 400,401 195,542

2.1.6 Disposal Area 1,834,957 1,397,502 437,454

Total for Package 1 (Funded by ADB, EIB, ADFD) 126,483,176 87,322,611 39,160,566

3 Waterway, Powerhouse & Equipment (Package-2)

3.1 Civil Works for Package-2

3.1.1 General Items 6,162,610 4,639,456 1,523,154

3.1.2 Intake 8,643,754 6,822,164 1,821,590

3.1.3 Headrace Tunnel 10,978,929 8,164,143 2,814,786

3.1.4 Headrace Surge Tank 2,758,586 2,108,973 649,613

3.1.5 Penstock 2,861,508 2,078,863 782,645

3.1.6 Draft Tunnel and Gate 2,551,786 1,891,493 660,294

3.1.7 Tailrace Tunnel 1,621,142 1,217,307 403,835

3.1.8 Draft Pond and Tailrace Outlet 1,663,017 1,306,725 356,292

3.1.9 Underground Powerhouse 19,207,944 14,528,354 4,679,591

3.1.10 Cable tunnel and Outgoing Terminal 2,693,391 1,856,013 837,378

3.1.11 Main Access Tunnel 3,222,195 2,311,601 910,594

3.1.12 Access Road 499,189 365,911 133,278

3.1.13 Disposal Area 1,589,816 1,208,323 381,493

Sub-total for P2 Civil Works 64,453,867 48,499,326 15,954,542

3.2 Hydromechanical Equipment

2.2.1 Spillway Equipment 8,264,000 7,437,600 826,400

2.2.2 Water Level Lowering Equipment 5,433,000 4,889,700 543,300

2.2.3 Sediment Flushing Equipment 26,000,000 23,400,000 2,600,000

2.2.4 Intake Equipment 3,431,000 3,087,900 343,100

2.2.5 Environmental/Riparian Flow Equipment 825,000 742,500 82,500

2.2.6 Steel Penstock 1,982,000 1,783,800 198,200

2.2.7 Draft Equipment 687,000 618,300 68,700

2.2.8 Tailrace Equipment 601,000 540,900 60,100

2.2.9 Miscellaneous 473,000 425,700 47,300

Sub-total for P2 Hydromechanical Equipment 47,696,000 42,926,400 4,769,600

3.3 Electromechanical Equipment

3.2.1 Overhed Traveling Crane 1,180,000 1,030,000 150,000

3.2.2 Turbine & Generator 36,790,000 32,110,000 4,680,000

3.2.3 Main Transformer (incl. Switchyard) 8,553,106 7,343,749 1,209,357

3.2.4 River Maintenance Generation Facility 3,220,000 2,910,000 310,000

Sub-total for P2 Electrical Equipment 49,743,106 43,393,749 6,349,357

Total for Package 2 (Funded by JICA) 161,892,973 134,819,475 27,073,499

4 Transmission Line and Rural Electrification

4.1 Transmission Line 8,869,416 7,497,000 1,372,416

4.2 Bharatpur Substation 5,684,000 4,890,200 793,800

4.3 Rural Electrification 8,113,362 0 8,113,362

Total 22,666,778 12,387,200 10,279,578

Amount (USD)No. Item

Appendix 8

A8-1

OUTLINE TERMS OF REFERENCE Project Supervision Consultant

for THL

I. Background The Tanahu Hydropower Project is substantially the first major reservoir type hydropower in Nepal along with sediment flushing system operations which is also the first type in the country. To develop such a new project construction and operations, reputable and experience supervision firm will be recruited. To mitigate complex project construction and operational risks, the presence of the proven project supervision and management capability will be crucial. The firm/association (the firm) will also coordinate and supervise the two construction packages during the construction period, and continue to operate the plan with a sediment flushing system. The firm will be responsible for supporting the Tanahu Hydropower lImited (THL) in project administration, design and engineering services, contracting, management control, procurement and expediting of equipment, materials control, inspection of equipment prior to delivery, shipment, transportation, control of schedule and quality, pre-commissioning and completion, performance-guarantee testing, inventorying spare-parts, training of owner's/plant sub-system operating and maintenance personnel, all financial, human resources and administrative management of the project both during construction and operation phase under the company’s board. The firm should be a hydropower developer/electric utility/any other consulting and engineering firms having adequate international experience of detailed designing, selection, monitoring, supervisions and co-ordination of contractor(s), operation and maintenance of hydropower project. Specific experience in the areas of (i) reservoir or pumped-storage type hydropower development, (ii) effective sediment management (e.g., sediment flushing, desanding), (iii) adaptation of social and environmental safeguards for hydropower projects in accordance with internationally accepted guidelines and practices (such as those of ADB, JICA, and other IFIs), and (iv) training and skill transfer programs to staff recruited locally in any hydropower projects outside the bidder’s country will be advantageous.

II. Terms of Reference for Firm/Association

The outlined terms of reference (ToR) of the project supervision contract consultant (the consultant) during the various stages of the Tanahu Hydropower Project under the Tanahu Hydropower Limited (THL) would include: 1. Overall project supervision and management activities for construction and development

1.1 Support before the selection of the contractor A. Review of design.

Review of detailed and basic designs prepared by the consultant of “Detailed Engineering Study of Upper Seti Hydropower Project”1 (DES Consultants) performed under a grant agreement between the Government of Nepal and Asian Development Bank (ADB) and review prequalification (PQ) documents if any and bidding documents prepared by the consultant of “Preparing Hydropower Development for Energy Crisis” granted by ADB (PPTA Consultants).

B. Project implementation planning.

The consultant shall prepare project implementation schedule of bidding process and construction works with relevant supporting documents within one month after effectiveness of

1 Upper Seti Hydropower Project has been renamed as Tanahu Hydropower Project.

http://en.wikipedia.org/w/index.php?title=Performance-guarantee&action=edit&redlink=1

http://en.wikipedia.org/wiki/Sub-system

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the consultancy contract with THL and submit it to THL for review and approval. If schedule is changed for certain reasons, the consultant shall modify the implementation schedule with clear explanation of reasons which caused changes within one month after such cause is revealed, and submit it to THL.

C. Bid management including contract negotiation. (i) PQ of bidders if any

The consultant shall support THL to: a) Review and finalize PQ documents prepared by PPTA Consultants, b) Prepare the evaluation report.

(ii) Bid and contract for each package The consultant shall assist THL to

a) Review and finalize the draft bidding documents prepared by PPTA Consultants; b) Arrange pre-bid conferences and site visits, c) Prepare answers to bidders’ inquiries and issuing amendment(s) if required, d) Evaluate bids and prepare bid evaluation reports e) Negotiate with prospective bidders for contracts and issue the letter of acceptance.

D. Planning and preparation of strategy documents. The consultant shall plan strategy for contractors under discussions with THL, prepare strategy documents of the contractors and submit them to THL before the award of any contract between THL and the contractors. The documents shall include (i) Confirmation of interactions regarding important subjects such as payment to the

contractors, variation order, claim handling, disputes, etc., under each contract between THL and the contractor,

(ii) Methodology of the consultant’s supervision of the contractors’ design, manufacturing, delivery and construction works,

(iii) Policies of safety during construction stage and (iv) Confirmation of the plans and policies prepared during project preparation stage.

1.2 Support during construction

E. Review and approval of drawings and designs.

The consultant shall review and approve drawings and design documents produced by the contractors. For the civil works, they consist of: (i) Detailed designs of the permanent works, (ii) Shop drawings, (iii) Operation and maintenance manual for any plant and equipment incorporated in the

permanent works, (iv) Documents showing construction method, specifications, data on materials and

construction machines furnished, (v) As-built drawings of the permanent works and (vi) Other drawings and their support documents prepared by the contractor in accordance

with the contract of the said packages. For the equipment and transmission lines, they consist of: (i) Manufacturing drawings and design calculations, (ii) Shop drawings (for work drawings), (iii) Documents showing construction method, specifications, data on materials and

construction machines furnished, (iv) Operation and maintenance manual,

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A8-3

(v) As-built drawings, (vi) Other drawings and their support documents prepared by the contractor in accordance

with the contract of the said packages.

F. Supervision, management and monitoring of construction process. The consultant shall; (i) Establish, at the initial stage of construction works, project management system, which will

incorporate; a) Overall organization with communication and correspondence system, including THL,

the consultant and the contractors. b) Conduct joint meetings to facilitate the project management, which consists of

1) Progress meeting to be held monthly with respective contractors, 2) Interface meeting to be held periodically with attendance of all the contractors, and 3) Other meetings as and when required.

c) Established management system to maintain 1) Correspondence data, 2) Construction drawing data base, 3) Progresses monitoring, 4) Cost control, and 5) Others as deemed necessary.

(ii) Review progress of the works regularly by a) Monitoring performance of the contractors, b) Comparing actual progress with the schedule, and c) Communicating with the contractors to maintain the progress on time. It aims to ensure

that actual completion date of the works should follow the project schedule envisaged at pre-construction stage.

(iii) Establish procedures and methods of reporting system to confirm that every work items being performed by the contractors shall fully comply with specifications.

G. Witness and approval of equipment testing and commissioning.

The consultant shall; (i) Review and approve factory testing procedures and factory test results submitted by the

contractor. (ii) Witness factory testing of major equipment and issue corresponding certificates. (iii) Review factory test inspection reports and certificates submitted by the contractor. (iv) Review and approve commissioning test procedures submitted by the contractor for gates,

valves, electromechanical equipment such as hydraulic turbines, generators etc. for both dry and wet tests.

(v) When the works are ready for inspection and test for substantial completion, a) Prepare a program for inspection and test, b) Examine the works and assure that they are ready for operation, and c) Issue taking-over certificates to the contractors, if the works are satisfactory for

operation or instruct the contractors remedial works and/or further test if they failed the verification test.

H. Supervision of all works including manufacturing/fabrication of equipment at all stages of work

/manufacturing/fabrication process The Consultant shall; (i) Review and approve the contractors’ temporary works, facilities and equipment. (ii) Review and approve the Contractors’ construction methods.

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(iii) Supervise and inspect all construction activities of the contractors so as to ensure compliance with the approved drawings, documents and specifications, and ensure that they are within schedule.

(iv) Regularly review manufacturing schedules and delivery schedules of equipment by the contractor.

(v) Monitor manufacturing progress and works by regular inspections to ensure the compliance to specifications and specified standards.

(vi) Certify the payments to the contractors, after checking and verifying the contractor’s measurements

(vii) Report regularly financial status of the project to THL by a) Reporting the financial result and financial position. b) Actual cash flow position. c) Performing detail variation analysis between estimated / budged position vis–a-vis the

actual position. d) Future requirements & payment schedules. e) Recommending possible measures for reducing expenditure, if any.

(viii) Investigate, inspect and assess requirements from the contractors for extension of time, additional works, payment for additional works, etc.

(ix) Review claims along with its supporting data, evaluate reports on the claim and assist THL in settling the claims or disputes (if any).

(x) Maintain records of construction activities, which will be eventually needed to prepare completion report, operation/maintenance manuals and as-built drawings. They shall include records of: (a) Investigation and monitoring, (b) Drawings, (c) The consultant’s activities, (d) The Contractor’s activities, (e) Payments, (f) Quality control, (g) Progress of works, (h) Safety control, (i) Notable events and (j) Others as required.

I. Quality assurance in conformance with international best practices in regard to engineering

practices, standards/ specifications. The consultant shall review and approve the contractors’ quality assurance programs during design, manufacturing, delivery and construction. The consultant shall ensure the contractor’s compliance to the approved quality assurance program by regular inspections.

J. Support for THL in ensuring adherence to final project design, engineering and schedule. K. Supervise contractors’ activities and enhancing the coordination among them to achieve

timelines, costing and quality standard for developing the project. The consultant should coordinate with the interrelated contractors.

L. Support for THL in ensuring overall financial, human resources, information technology and

administrative functions to develop the project and for fulfilling the desired performance level under contractual arrangement.

M. Support for THL in implementing all safeguard matters encompassing both social and

environmental aspects following the plans and policies prepared during project preparation.

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A8-5

N. Prepare and submit to THL the following reports and documents;

(i) Final PQ and bidding documents (ii) Evaluation reports for prequalification (when required) and bidding (iii) Program for project management system (iv) As-built drawings (v) Operation and maintenance manuals (see 2 A) (vi) Construction completion report (vii) Monthly progress reports (viii) Other documents as reasonably needed

2. Support for THL in Operation (Post Commissioning) of the Project

A. Plant operation planning in detail. The consultant shall prepare operations and maintenance strategy documents including organization and staffing of operation, long-term and mid-term maintenance schedules, schedule and procedures of regular inspections, sediment flushing schedule and procedures, training program for THL staff, recording system on regular basis, accident reporting system and submit them to THL for review and consent. The consultant shall also prepare operation and maintenance manuals of the plant for THL’s staff, in consideration of time intervals for each maintenance activity, and submit it to THL. The strategy documents and operation and maintenance manual shall be finalized not later than one month before the commissioning of the project.

B. Operational and maintenance activities of the plant on regular basis.

Based on the operation and maintenance strategy documents and daily instructions by the NEA’s load dispatching centre, the consultant shall assist THL in operating the plant for the three shifts. The consultant shall train THL’s operation staff through training program as consented in the operation and maintenance strategy documents. The consultant shall gradually transfer their operation and maintenance activities to THL’s staff under THL’s prior consent, so that the THL staff can operate the plant by themselves after the consultancy contract with THL expires. The consultant shall prepare an annual maintenance plan with an estimated budget to optimize cost of maintenance and to achieve long term reliability of operation of the systems and equipment. The maintenance plan shall include the maintenance activities, frequency of maintenance. For overhauling works, the consultant shall prepare the overhaul schedule with budget estimates in the long term schedule. The consultant shall assist THL in conducting maintenance of the plant in accordance with the annual maintenance plan.

C. Monitoring, controlling and reporting operational performance of the project.

The consultant shall establish document management system for reports on operation and maintenance activities. The consultant shall review the daily, weekly, monthly, and annual reports prepared by THL’s staff at the initial operation stage. The consultant shall establish monitoring and control system of operation and maintenance activities, based on the operation and maintenance strategy documents as consented with THL. The consultant shall periodically review efficiency of the said systems and modify as and when required.

D. Quality assurance in conformance with international best practices with respect to engineering

practices, standards and specifications. The consultant shall establish quality assurance system in accordance with the consented operation and maintenance strategy documents. It is recommended that the consultant should apply for quality assurance system ISO 9001. THL and the consultant shall establish operating and control procedures for all units, monitor

Appendix 8

A8-6

performance of all activities concerned, conduct internal audits, correct or prevent non-conformities, and adopt continual improvement actions.

E. Supervise all works pertaining to the operation of the Tanahu Hydropower Plant. The

consultant shall supervise all works conducted based on the annual maintenance plan or overhaul schedule.

F. Ensure adherence to project scheduling.

3. Other activities

A. Assist THL in implementing, monitoring and reporting all safeguard matters encompassing both social and environmental aspects as per the plans and policies prepared during project preparation.

B. Conduct Cost-Benefit analysis of deviations in construction phase from planned design etc.

C. Make proper recording of events leading to delay in construction and operational activities. D. Optimize generation bottlenecks such as availability of water and sedimentation issues. E. Take care of all safety measures both during project construction as well as during operation.

(i) During project construction, the consultant shall (a) Review and approve safety program submitted by the contractors, (b) Establish overall safety control organizations and program and (c) Hold safety meetings regularly with the THL and the contractors

(ii) During operation, the consultant shall (a) Prepare safety program for the operation activities of the plant, (b) Assist THL in establishing safety control measures and conducting the safety program, (c) Assist THL to educate staff on safety control and (d) Hold safety meetings on regular basis.

F. Ensure adherence to all statutory requirements. G. Execute skill transfer programs for THL personnel during both construction and operation

stages (i) The consultant shall prepare skill transfer program corresponding to the professional

expertise of THL personnel, and submit the program three months before the commencement of each stage to THL for their review and consent.

(ii) The consultant shall execute the skill transfer based on the consented program for each stage.

H. Assist in maintaining sound external relations & personnel relations.

I. Report key issues directly to ADB officers in addition to THL during construction stage

including procurements of contracts.

III. Output A. The consultant shall prepare an Inception Report within 6 weeks of commencement, monthly and quarterly progress reports as applicable based on field data and preparation of progress reports in a format and detail acceptable to THL and ADB.

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A8-7

B. Maintain records documenting decisions made at meetings, progress on project implementation, financial records and changes to the contract plans. The consultant will assist ADB / THL in preparing a project completion report and monitoring and evaluation reports as required. All documents and reports would be made available on electronic format to ADB / THL. All reports will be in English language.

IV. Terms of Reference for Each Expert

Tanahu Hydropower Project being the first reservoir based project in Nepal will require specialized skills and relevant international experience in handling such project. As such the International Experts will have to work in co-ordination with THL’s national counterpart experts for the successful execution of the project. The following table details the International Experts and person months required for the project.

Sl No International Position Total person months

1. Project Manager/Team Leader 147

2. Senior Civil Engineer (Dam) 66

3. Senior Civil Engineer (WW & PH) 67

4. Civil Engineer 16

5. Structural Engineer 9

6. Geologist 11

7. Geotechnical Engineer 11

8. Utility Engineer 7

9. Hydromechanical Engineer 50

10. Senior Electromechanical Engineer 28

11. Electromechanical Engineer 29

12. Senior Electrical Engineer 48

13. Electrical Engineer 17

14. Transmission Line Engineer 17

15. Contract Specialist 22

16. Environmental Specialist 35

17. Social Safeguard Specialist 35

18. Finance Expert 18

19. Accountant Expert 18

20. Human Resource Expert 18

Total 669

The consultant team member will consist of twenty engineers/experts for project management activities both during construction stage and during operation and maintenance stage. Three experts Project Manager, Senior Civil Engineer (Dam), and Senior Civil Engineer (Waterway & Powerhouse) shall supervise the activities of both THL staff as well as the consultant team members. For the engineering experts, in-house staff will be preferred. In the light of the detailed Terms of Reference (ToR) for the consultant, each expert’s ToR will include, but not necessarily be limited to, the following tasks. Each expert will perform their tasks in collaboration with their team members. The outlined terms of references for each the experts are as follows:

1. Project Manager

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(a) Both during construction and operation stages will do the following: (i) Work at the project site to control day-to-day operation of the project and report to MD of

THL. (ii) Present to the MD the technical and financial progress and issues (iii) Conduct overall supervision of activities performed by both THL staff and the consultant

team members at the site.

(b) During construction stage In cooperation with Executive Directors/ Vice Presidents, other THL staff and other consultant team members, Project Manager will do the following; (i) Supervise the review of the detailed and basic designs prepared by the consultant of

“Detailed Engineering Study” and review of bidding documents prepared by the consultant of “Preparing Hydropower Development for Energy Crisis: Nepal”, and finalize review results.

(ii) Supervise preparation of the project implementation schedule and its revision, when required, and finalize it under consultation with THL.

(iii) Conduct overall supervision for bid management process. (iv) Supervise preparation of strategy documents of contractors and finalize them under

consultation with THL. (v) Supervise the consultant team members’ activities such as review and approval of drawings

and design documents, supervision, management and monitoring of construction process, witness and approval of equipment testing and commissioning, supervision of all works of contractors, quality assurance, and supervising contractors’ activities and enhancing coordination among them.

(vi) Supervise the consultant team members’ support for THL in ensuring adherence to final project design, engineering and schedule.

(vii) Supervise the consultant team members’ support for THL in ensuring financial, human resources, information technology, and administrative functions.

(viii) Supervise the consultant team members’ support for THL in implementing all safeguard matters encompassing both social and environmental aspects following the plans and policies prepared during project preparation.

(ix) Supervise preparation of reports and documents specified in ToR for the Firm/Association I.1.N.

(c) During operation stage

In cooperation with Executive Directors/ Vice Presidents, other THL staff and other consultant team members, Project Manager will do the following (i) Supervise preparation of operation and maintenance strategy documents and finalize them

under consultation with THL. (ii) Supervise the consultant team members’ support for THL in conducting operation and

maintenance and supervise the consultant team members’ training activities for THL staff. (iii) Supervise establishment of document management system for reports on operation and

maintenance activities. (iv) Supervise establishment of quality assurance system. (v) Manage the consultant team members’ supervision of works pertaining to operation of the

Tanahu Hydropower Plant. (vi) Ensuring adherence to project schedule.

(d) Specific jobs

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(i) Supervise the consultant team members’ assisting THL in implementing all safeguard matters encompassing both social and environmental aspects as per the plans and policies prepared during project preparation.

(ii) Supervise Cost-Benefit analysis of deviations in construction phase from planned design etc. (iii) Supervise proper recording of events leading to delay in construction and operational

activities. (iv) Optimize generation bottleneck of availability of water and sedimentation issues. (v) Take care of all safety measures during construction and operation. (vi) Ensure adherence to all statutory requirements. (vii) Supervise the execution of skill transfer programs for THL personnel during both

construction and operation stages. (viii) Assist in maintaining sound external relations and personnel relations. (ix) Maintain records documenting decisions made at meetings, progress of project

implementation and changes to contract plans. (x) Report key issues directly to ADB officers during construction stage.

2. Senior Civil Engineer (Dam)

The expert will do the following as Executive Director/Vice President (Project): (a) During construction stage

(i) Review bidding documents from the viewpoint of construction prepared by the consultant of “Preparing Hydropower Development for Energy Crisis: Nepal”.

(ii) Prepare the project implementation schedule in cooperation with other team members. (iii) Support THL in running the entire bid management process of civil works from the viewpoint

of construction. (iv) Support THL in planning and preparation of strategy documents of contractors regarding civil

works. (v) Supervise the consultant team’s support to THL in supervision, management and monitoring

of construction process and support THL in supervision, management and monitoring of construction process of civil works.

(vi) Supervise the consultant team’s support to THL in witnessing and approving equipment testing and commissioning.

(vii) Supervise all civil works and supervise the consultant team’s supervision activities. (viii) Support THL in ensuring adherence to schedule of civil works. (ix) Supervise contractors’ activities and enhance the coordination among contractors. (x) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (xi) Record events leading to delay in construction activities. (xii) Take care of all safety measures during construction. (xiii) Execute skill transfer programs for THL personnel during construction stage. (xiv) Assist in maintaining sound external relations and personnel relations. (xv) Maintain records documenting decisions made at meetings, progress of project

implementation and changes to contract plans. 3. Senior Civil Engineer (Waterway and Powerhouse)

The expert will do the following as Executive Director/Vice President (Engineering/Technology): (a) During construction stage

(i) Review the detailed and basic design of civil structures prepared by the consultant of

“Detailed Engineering Study” and review bidding documents of civil works prepared by the consultant of “Preparing Hydropower Development for Energy Crisis: Nepal”.

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(ii) Assist Project Manager in preparing the project implementation schedule in cooperation with other team members.

(iii) Support THL in running the entire bid management process for construction works. (iv) Support THL in planning and preparation of strategy documents of the contract regarding

civil works from the viewpoint of design. (v) Review and approve drawings and design documents of civil works produced by contractors. (vi) Establish project management system and reporting system for supervision, management

and monitoring of construction process by using information technology. (vii) Review quality assurance program of civil works during design and construction. (viii) Support THL in ensuring adherence to final project design, engineering. (ix) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (x) Record events leading to delay in construction. (xi) Execute skill transfer programs for THL personnel during construction stage. (xii) Assist in maintaining sound external relations and personnel relations. (xiii) Maintain records documenting decisions made at meetings, progress of project

implementation and changes to contract plans.

4. Civil Engineer (a) During Operation stage

(i) Assist Project Manager in preparing operation and maintenance strategy documents from

the viewpoint of civil engineering. (ii) Assist THL in conducting maintenance of the civil structures. (iii) Establish document management system for reports on operation and maintenance activities

for civil works. (iv) Establish quality assurance system. (v) Supervise civil works pertaining to operation of the Tanahu Hydropower Plant. (vi) Ensure adherence to project schedule. (vii) Record events leading to delay in operational activities. (viii) Optimize generation bottleneck of availability of water and sediment flushing issues. (ix) Ensure safety measures during operation. (x) Execute skill transfer programs for THL personnel during operation stage. (xi) Assist in maintaining sound external relations and personnel relations.

5. Structural Engineer (a) During construction stage

(i) Review drawings and design documents of civil structures produced by the contractors, in

particular those for detailed design. (ii) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (iii) Execute skill transfer programs for THL personnel during operation stage. (iv) Assist in maintaining sound external relations and personnel relations.

6. Geologist (a) During construction stage

(i) Assist other engineers in reviewing of the design prepared by the consultant of “Detailed

Engineering Study” from the geological viewpoint.

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(ii) Review geological investigation plan proposed by the contractors for detailed design for civil structures, if any.

(iii) Review drawings and design documents produced by the contractors and assist other engineers in reviewing drawings and design documents of civil structures produced by the contractors, from the geological viewpoint.

(iv) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (v) Execute skill transfer programs for THL personnel during construction stage. (vi) Assist in maintaining sound external relations and personnel relations.

7. Geotechnical Engineer (a) During construction stage

(i) Review drawings and design documents of civil structures produced by the contractors, in

particular those for detailed design. (ii) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (iii) Execute skill transfer programs for THL personnel during construction stage. (iv) Assist in maintaining sound external relations and personnel relations.

8. Utility Engineer (a) During construction stage

(i) Review the technical part of bidding documents on utility works prepared by the consultant of

“Preparing Hydropower Development for Energy Crisis: Nepal”. (ii) Review drawings and design documents of utility works produced by the contractors. (iii) Supervise all works of utility works. (iv) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (v) Execute skill transfer programs for THL personnel during construction stage. (vi) Assist in maintaining sound external relations and personnel relations.

9. Hydromechanical Engineer (a) During construction stage

(i) Review the basic and detailed design of hydromechanical equipment such as spillway gates,

intake gate, draft gates, sediment flushing facilities, water level lowering equipment, penstock liner, etc. prepared by the consultant of “Detailed Engineering Study” and review of bidding documents for the above equipment prepared by the consultant of “Preparing Hydropower Development for Energy Crisis: Nepal”.

(ii) Assist Project Manager in preparing the project implementation schedule in cooperation with other engineers.

(iii) Support THL in running the entire bid management process for construction works of the hydromechanical equipment.

(iv) Support THL in planning and preparation of strategy documents of the contractors, regarding hydromechanical equipment.

(v) Review drawings and design documents of the hydromechanical equipment produced by the contractor.

(vi) Support THL in supervision, management and monitoring of construction process regarding hydromechanical equipment.

(vii) Support THL in witnessing and approving equipment testing and commissioning of hydromechanical equipment.

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(viii) Supervise all works of hydromechanical equipment. (ix) Review the contractor’s quality assurance program of hydromechanical equipment during

design, manufacturing, delivery and construction. (x) Support THL in ensuring adherence to final project design, engineering and schedule of

hydromechanical equipment. (xi) Supervise the contractor’s activities and enhance the coordination among contractors. (xii) Prepare reports and documents specified in ToR for Firm/Association I.1.N.

(b) During operation stage


the viewpoint of hydromechanical engineering. (ii) Assist THL in conduct operation and maintenance of hydromechanical equipment. (iii) Establish document management system for reports on operation and maintenance activities

for hydromechanical equipment. (iv) Establish quality assurance system for hydromechanical equipment. (v) Supervise works pertaining to operation of the Tanahu Hydropower Plant. (vi) Ensure adherence to project schedule.

(c) Specific jobs

(i) Record events leading to delay in construction and operational activities. (ii) Optimize generation bottleneck of availability of water and sedimentation issues. (iii) Ensure adoption of all safety measures during construction and operation. (iv) Execute skill transfer programs for THL personnel during both construction and operation

stages. (v) Assist in maintaining sound external relations and personnel relations. (vi) Maintain records documenting decisions made at meetings, progress of project

implementation and changes to contract plans regarding hydromechanical equipment.

10. Senior Electromechanical Engineer (a) During operation stage


the viewpoint of electromechanical engineering. (ii) Assist THL in conduct operation and maintenance of electromechanical equipment. (iii) Establish document management system for reports on operation and maintenance activities

for electromechanical equipment. (iv) Establish quality assurance system of electromechanical equipment. (v) Supervise works pertaining to operation of the Tanahu Hydropower Plant. (vi) Ensure adherence to project schedule. (vii) Record events leading to delay in operational activities. (viii) Optimize generation bottleneck of availability of water and sedimentation issues. (ix) Ensure adoption of all safety measures during operation. (x) Execute skill transfer programs for THL personnel during operation. (xi) Assist in maintaining sound external relations and personnel relations.

11. Electromechanical Engineer (a) During construction stage

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(i) Review the basic design of electromechanical equipment such as hydraulic turbine and related equipment prepared by the consultant of “Detailed Engineering Study” and review bidding documents for the above equipment prepared by the consultant of “Preparing Hydropower Development for Energy Crisis: Nepal”.


(iii) Support THL in running the entire bid management process for construction works of the electromechanical equipment.

(iv) Support THL in planning and preparation of strategy documents of contractors, regarding electromechanical equipment.

(v) Review drawings and design documents of the electromechanical equipment produced by the contractor.

(vi) Support THL in supervision, management and monitoring of construction process of electromechanical equipment.

(vii) Support THL in witnessing and approving equipment testing and commissioning of electromechanical equipment.

(viii) Supervise all works of electromechanical equipment. (ix) Review the contractor’s quality assurance program of electromechanical equipment during

design, manufacturing, delivery and construction. (x) Support THL in ensuring adherence to final project design, engineering and schedule of

electromechanical equipment. (xi) Supervise the contractor’s activities and enhance the coordination among contractors. (xii) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (xiii) Record events leading to delay in construction and operational activities. (xiv) Ensure adoption of all safety measures during construction stage. (xv) Execute skill transfer programs for THL personnel during both construction and operation

stages. (xvi) Assist in maintaining sound external relations and personnel relations. (xvii) Maintain records documenting decisions made at meetings, progress of project

implementation and changes to contract plans regarding electromechanical equipment. 12. Senior Electrical Engineer

(a) During operation stage


the viewpoint of electrical engineering. (ii) Assist THL in conduct operation and maintenance of electrical equipment. (iii) Establish document management system for reports on operation and maintenance activities

for electrical equipment. (iv) Establish quality assurance system for electrical equipment. (v) Supervise works pertaining to operation of the Tanahu Hydropower Plant. (vi) Ensure adherence to project schedule. (vii) Record events leading to delay in operational activities. (viii) Optimize generation bottleneck of availability of water and sedimentation issues. (ix) Ensure adoption of all safety measures during operation stage. (x) Execute skill transfer programs for THL personnel during operation stage. (xi) Assist in maintaining sound external relations and personnel relations.

13. Electrical Engineer

(a) During construction stage

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(i) Review the basic design of electrical equipment such as generator, main transformer,

switchgear and related equipment prepared by the consultant of “Detailed Engineering Study” and review bidding documents for the above equipment prepared by the consultant of “Preparing Hydropower Development for Energy Crisis: Nepal”.


(iii) Support THL in running the entire bid management process for construction works of the electrical equipment.

(iv) Support THL in planning and preparation of strategy documents of contract regarding electrical equipment.

(v) Review drawings and design documents of the electrical equipment produced by the contractor.

(vi) Support THL in supervision, management and monitoring of construction process of electrical equipment.

(vii) Support THL in witnessing and approving equipment testing and commissioning of electrical equipment.

(viii) Supervise all works of electrical equipment. (ix) Review contractor’s quality assurance program of electrical equipment during design,

manufacturing, delivery and construction. (x) Support THL in ensuring adherence to final project design, engineering and schedule of

electrical equipment. (xi) Supervise the contractor’s activities and enhance the coordination among contractors. (xii) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (xiii) Record events leading to delay in construction activities. (xiv) Ensure adoption of all safety measures during construction. (xv) Execute skill transfer programs for THL personnel during construction stage. (xvi) Assist in maintaining sound external relations and personnel relations. (xvii) Maintain records documenting decisions made at meetings, progress of project

implementation and changes to contract plans regarding electrical equipment.

14. Transmission Line Engineer


(i) Review the basic design of transmission line and a new substation in Bharatpur prepared by the consultant of “Detailed Engineering Study” and review bidding documents for the transmission line and substation prepared by the consultant of “Preparing Hydropower Development for Energy Crisis: Nepal”.


(iii) Support THL in running the entire bid management process for construction works of the transmission line and substation.

(iv) Support THL in planning and preparation of strategy documents of the contractor, regarding transmission line and substation.

(v) Review drawings and design documents of the transmission line produced by the contractor.

(vi) Support THL in supervision, management and monitoring of construction process of transmission line and substation.

(vii) Support THL in witnessing and approving equipment testing and commissioning of transmission line and substation.

(viii) Supervise all works of transmission line and substation.

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(ix) Review the contractor’s quality assurance program of transmission line and substation during design, manufacturing, delivery and construction.

(x) Support THL in ensuring adherence to final project design, engineering and schedule of the transmission line and substation.

(xi) Supervise contractor’s activities and enhance the coordination among contractors. (xii) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (xiii) Record events leading to delay in construction activities. (xiv) Ensure adoption of all safety measures during construction. (xv) Execute skill transfer programs for THL personnel during construction stage. (xvi) Assist in maintaining sound external relations and personnel relations. (xvii) Maintain records documenting decisions made at meetings, progress of project

implementation and changes to contract plans regarding transmission line and substation. 15. Contract Specialist (a) During construction stage

(i) Review bidding documents from the contractual viewpoint prepared by the consultant of

“Preparing Hydropower Development for Energy Crisis: Nepal”. (ii) Support THL in running the entire bid management process through selection and

negotiation of each contract package from the contractual viewpoint. (iii) Supervise all works of construction works from the contractual viewpoint. (iv) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (v) Record events leading to delay in construction activities. (vi) Execute skill transfer programs for THL personnel during construction stage. (vii) Assist in maintaining sound external relations and personnel relations. (viii) Maintain records documenting decisions made at meetings, progress of project

implementation and changes to contract plans. 16. Environmental Specialist (a) During construction stage

(i) Support THL in planning and preparation of strategy documents. (ii) Assist THL in implementing all safeguard matters encompassing environmental aspects

following the plans and policies prepared during project preparation. (iii) Prepare reports and documents specified in ToR for Firm/Association I.1.N.


(i) Prepare operation and maintenance strategy documents from the viewpoint of environmental

safeguards.

(c) Specific jobs

(i) Assist THL in implementing, monitoring and reporting all safeguard matters encompassing environmental aspect as per the plans and policies prepared during project preparation stage.

(ii) Execute skill transfer programs for THL personnel during both construction and operation stages.

(iii) Assist in maintaining sound external relations and personnel relations.

17. Social Safeguard Specialist

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(i) Support THL in planning and preparation of strategy documents. (ii) Assist THL in implementing all safeguard matters encompassing social aspects following the

plans and policies prepared during project preparation. (iii) Prepare reports and documents specified in ToR for Firm/Association I.1.N.


(i) Prepare operation and maintenance strategy documents from the viewpoint of social

safeguards.

(c) Specific jobs

(i) Assist THL in implementing, monitoring and reporting all safeguard matters encompassing social aspect as per the plans and policies prepared during project preparation stage.

(ii) Execute skill transfer programs for THL personnel during both construction and operation stages.

(iii) Assist in maintaining sound external relations and personnel relations.

18. Finance Expert

(a) During construction stage (i) Assist in financial analysis of the project. (ii) Assist in preparation and finalization of the annual budget and quarterly review reports (iii) Ensure provision of adequate resources for various activities of the department (iv) Ensure approval of departmental budget. (v) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (vi) Execute skill transfer programs for THL personnel during construction stage.

19. Accountant


(i) Ensure that accounting policies, guidelines for recording financial transaction, prudent accounting principles (as approved by the higher authorities) and accounting standards applicable to accounts as per statutory requirements of company law are implemented.

(ii) Assist in preparation and review of final accounts. (iii) Assist in framing policies to minimize tax liabilities, compliance to tax laws and in case of tax

litigations. (iv) Take appropriate measures to strengthen the Cost Accounting function THL (v) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (vi) Assist in taking corrective measures on the basis of the findings of the Statutory and Internal

Audits. (vii) Ensure adherence to all statutory requirements. (viii) Execute skill transfer programs for THL personnel during construction stage.

20. Human Resource Expert


(i) Assist in formulation of Corporate HR Policies.

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(ii) Ensures adherence to approved administration, personnel and manpower development norms, rules, regulations and policies.

(iii) Assist in monitoring, processing & co-ordination of activities related to performance evaluation.

(iv) Assist in conduct of job evaluation studies. (v) Assist in conduct of salary surveys; compilation and analysis of economic indicators;

development of salary scales. (vi) Assist in administration of employee benefits and various type of loans. (vii) Assist in development of career path plans. (viii) Assist in Identification of training needs and co-ordination of training activities. (ix) Assist in maintenance & update of training records and statistics. (x) Ensures the performance of administrative and office services. (xi) Prepare reports and documents specified in ToR for Firm/Association I.1.N. (xii) Ensure adherence to all statutory requirements. (xiii) Execute skill transfer programs for THL personnel.

V. Tenure of the Contract

1. The consultant will be appointed for a period as mentioned below:

1 year of pre-construction stage, 6 years of construction stage and 5 years of operation stage

2. On successful completion of five years of operation, the contract may be further renewed.

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OUTLINE TERMS OF REFERENCE

Community Development Strategy for THL

A. Background 1. Nepal Power system is heavily dependent on the run-of-river projects and hence faces acute power shortages during the dry season (mainly winter season). On the other hand, there is peak production during the summer when the country experiences high rainfall. Given this background, the Government of Nepal decided to approve the National Energy Crisis Fixation Program 2065 (2008/09). Where the Tanahu Hydropower Project (140 MW) was identified as one of the most critical projects. 2. The project will be located on the Seti River near Damauli City, the district capital of Tanahu District. The reservoir-based project would have an installed capacity of 140MW. It will extend to about 25 km upstream submerging low-lying lands along the Seti River. The main-affected areas of the project consist of 24 ward across 8 village development committees (VDCs) and one Municipality viz. Chhang, Majhkot, Bhimad, Jamune, Kot Durbar, Rishing Ranipokhari, Savumbhagawati and Kahun Shivapur VDCs and the Vyas Municipality. 3. The construction and implementation of the project would directly and indirectly impact the lives of the people creating challenges and will also bring in opportunities for the community. Thus, the Community Development Strategy (CDS) aims to identify strategic interventions to improve the life of the people living in the project area of influence. It is a commitment of the Tanahu Hydropower Limited (THL) towards facilitating evelopment of the impacted community. 4. CDS intends to guide the implementing agencies to develop an implementation plan for strategic interventions and achieve the key objective outlined in the document. It provides a framework to engage community on a participatory basis and empower them to continue the activities under the guidance of THL. The document lays special emphasis on the gender empowerment and the social inclusion of the excluded groups to ensure an inclusive growth for the community. 5. The key objective of CDS is to enhance socio-economic development of the project influence area through intervention in key program areas viz. education, health, maximizing benefits from infrastructure development, vocational training and skill development, social inclusion and gender empowerment for enhanced livelihood and well being of the community. B. Implementation Arrangements 6. THL will engage consulting services with a service provider, anchor NGO/firm for execution of the CDS. The service provider will also provide technical and management support in implementing the CDS in the project area and provide necessary technical and management support for the same. It will be required to facilitate the process of identification and prioritization of communities’ need, develop strategic linkages, mobilize resources to effectively plan and implement the program for the construction period. It would also be required to partner/ form consortium with 3 to 4 field NGOs having presence in the targeted VDCs and municipality to undertake this assignment. The service provider will build the capacity of THL, local communities, and community base organizations to implement community development programs and sustain it in the long run. The field NGOs will be expected to ensure participation of institutions, groups and individuals from amongst the key primary and secondary stakeholders. They will undertake the micro planning covering the key program areas to address the challenges of the people in the PA and explore the opportunities of the people with close guidance and supervision of the anchor NGO/ Firm. The consulting services will be

Appendix 9

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implemented over 6 years from March 2014 to June 2020. ADB will engage a consulting firm or consortium of firms using its quality- and cost-based selection procedures in accordance with the Guidelines on the Use of Consultants (2010, as amended from time to time). Equipment financed by the services will be procured under ADB’s Procurement Guidelines (2010, as amended from time to time). C. Key Responsibilities of the Service Provider 7. The overall responsibilities of the anchor NGO/firm will include the following:

(i) Formulate detailed community development plans based on the CDS. (ii) Coordinate and manage all operational and technical issues related to the field NGOs. (iii) Develop a framework for conducting the micro-planning exercise in the PA and develop the

implementation plan with support of the field NGO and take the approval of THL for the same. (iv) Update the community development plan annually through a participatory approach. (v) Build the capacity of the field NGO in various areas such as, participatory planning, micro level

project management, community mobilization and empowerment, other programmatic areas viz. education, health, livelihood and gender and development, social inclusion etc.

(vi) Empower field NGOs to conduct training and capacity building programs for community based groups, local institutions on a range of issues.

(vii) Coordinate and develop linkages with the government at the national, district and VDC level in facilitating development by playing a complementary and supplementary role to strengthen government programs.

(viii) Coordinate with THL and facilitate linkages between the local contractors and sub contractors and local groups to maximize benefits from the project.

(ix) Networking and advocacy at the national, district and the level of local governance. (x) Provide guidelines, tools, training manuals and communication tools for field NGOs to

effectively deliver the various project assignments. (xi) Develop tools and manuals for THL to sustain the programs in the long run. (xii) Develop a simple monitoring and evaluation (M&E) framework including a computerized

management information system (MIS) covering all households in the PA for assessing the progress of the program periodically covering all key components.

(xiii) Support THL in establishing the grievance redressal mechanism during CDS implementation to respond to the queries and concerns of the community and target beneficiaries

(xiv) Monitor and support the work of the Field NGOs. (xv) Collaborate with THL in implementing the baseline, mid-line and end-line assessments. (xvi) Ensure the overall quality of the program and timely submission of all deliverables. (xvii) Report to THL quarterly on the qualitative and quantitative progress of the project. (xviii) Ensure that GESI is implemented smoothly and will be responsible for reporting the progress

of GESI implementation. D. Preferable Qualifications of Service Provider

8. The following qualification of the anchor NGO/firm will be advantageous: (i) Adequate experience of working with any other international or bilateral development

agencies. (ii) Presence in at least 5 districts and have worked as a national or international level

organization/firm. (iii) Functional office(s) and staff in Kathmandu. (iv) Experience of large-scale similar project management. (v) Extensive experience of working in the area of community development and in sectors such as

education, health, livelihood, gender mainstreaming and development, water and sanitation.

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(vi) Partnership base of field NGOs at the district level. (vii) Experience in micro-planning, community mobilization, capacity building. (viii) Extensive experience of working with government at the national, regional and district levels. (ix) Experience of working in corporate social responsibilities or other social development activities

around large infrastructure projects.

E. Qualifications of the Field NGOs to be proposed as consortium partners

9. The following qualification of the field NGO will be advantageous: (i) Registered under as a private limited company, registered society or trust with Government of

Nepal. (ii) Experience of working with any other development agencies. (iii) Presence in at least one district, with experience of working in Tanahu district. (iv) Any registered office and preferably an office in Tanahu district. (v) Experience of implementing grass root projects funded by various national or international

organizations. (vi) Extensive experience of working in the area of community development and in sectors such as

education, health, livelihood, gender mainstreaming and development, water and sanitation. (vii) Experience in micro-planning, community mobilization, and formation of community based

groups. (viii) Extensive experience of working with government at the district levels.

F. Key proposed experts 11. The service provider of the anchor NGO/firm will include the project manager/community development specialist and experts who have experience and expertise: (a) social development and gender enhancement, (b) health, (c) education, (d) health, water and sanitation, (e) livelihood and enterprise development, and (f) monitoring and evaluation. The each expert’s scope of work is provided in the CDS as TORs, but not necessarily be limited to them. The project manager will specifically do the following tasks:

(i) Manage and coordinate the overall project planning and implementation activities for the

community development. (ii) Liaison with all the stakeholders including THL, local government officials, local people in the

communities, civil work contractors and field NGO partners. (iii) Conduct a participatory approach in developing the community development plans if

applicable. (iv) Manage the project schedule and budget and with THL in implementing the community

development plans. (v) Develop monitoring framework and indicators to evaluate the achievements. (vi) Report the progress and the outcomes of the community development plans on a semiannual

basis. (vii) Formulate sustainable mechanism for subsequent community development planning and

activities. (viii) Coordinate the inputs of all the other experts, provide quality control on all outputs, harmonize

proposals and recommendations, and ensure that the consultation process is adequate in terms of the stakeholder's participation and ownership.

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OUTLINE TERMS OF REFERENCE CDTA: Support for Sustainable Energy Management and Reforms

A. Methodology and Key Activities

1. The capacity development technical assistance (CDTA) aims to work on reform programs on the power sector and strengthen the sector’s key framework to ensure the sustainability of the sector-wide systems for hydropower development in Nepal. CDTA will focus on five components:

(i) functional support to establish and implement tariff rationalization mechanisms of the Electricity Tariff Fixation Commission (ETFC) as an autonomous body,

(ii) time-bound reform actions for the Nepal Electricity Authority (NEA) to implement a financial restructuring plan (FRP), management reforms and selected asset spin-off,

(iii) demonstration of a public private partnership (PPP) structure based on standardized contractual documents for NEA and Department of Energy Development (DOED), Ministry of Energy, and equity sale programs for the Tanahu Hydropower Limited (THL),

(iv) formation of effective small and medium size hydropower investment and development policies and strategies for DOED based on comparative studies of development road map and investment models with neighboring countries, and

(v) commercial-oriented comprehensive corporate policies and management systems of NEA and some subsidiaries including THL to cover ranging from technical and financial management to equitable community benefit sharing and safeguard practices.

2. Tariff reforms. To attract investment for hydropower and ensure the sector’s sustainability, an appropriate regulatory framework will have to be established by issuing clear regulations and setting up the regulator’s institutional capacity. At present, ETFC is allowed to regulate NEA’s retail tariffs only. The sector’s tariffs will have to be annually adjusted and determined in a transparent manner under appropriate rules and guidelines. ETFC and its successor entity will regulate functional tariffs for generation, transmission, and distribution to ensure a full cost recovery and operational efficiency. These mechanisms and practices will further be put in place regularly through capacity development support from CDTA.

3. NEA restructuring. Inadequate and unreliable power supplies are a function of low investments and poor upkeep of existing facilities. These are also affected by weak financial and management of NEA who is a single buyer and network operator. Detail of FRP will have to be defined in an implementable manner and implemented to ensure NEA financial and operational sustainability. Along with FRP, NEA management structure will also be reformed. The schemes can include spin off of selected assets of NEA and disinvestment and partnership with experienced operational partners. The concrete plans will be formulated and clear actions will be set up with the government in close consultation with other key donors.

4. PPP arrangements and share sale. The government has been exploring PPP for hydropower projects. Private investment and participation is crucial to meet acute shortage of power generation and exploit vast potential of hydropower. One special feature of the Tanahu Hydropower Project is selling an equity stake in THL. A sale of either a majority or minority stake of THL could generate significant revenues to kick-start other investments. This transaction process will be put in place and supported by the consultant. Proceeds could also be used to restructure and recapitalize NEA. If a minority stake is involved, then the divestment program will need to combine the co-ownership with a management contract. Any PPP project(s) will also be identified for demonstration

Appendix 10

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and provided advisory support using internationally acceptable commercial documents including a project development agreement, a power purchase agreement, and/or a management contract for initial project structuring scheme.2

5. Other development and institutional capacity improvement. THL is ring-fenced from NEA structure. It will have commercial-oriented corporate policies and practices along with implementation of the Tanahu Hydropower Project. To ensure appropriate institutional governance, they will cover procurement, accounting and financial management, technical operations, safeguards, human resources,3 and gender and community involvement. The framework should be applied to other subsidiaries of NEA subsequently.

B. Implementation Arrangements

6. The executing agency (EA) will be DOED, MOE and the implementing agencies (IAs) are ETFC, NEA, and its subsidiaries including the Tanahu Hydropower Limited (THL). DOED will be oversee day-by-day CDTA implementation. DOED, ETFC, NEA and its subsidiaries will help the consultants liaise with other government ministries and agencies, local authorities, and other stakeholders in the project areas, and obtain data and documentation from them. They will assign the counterpart staff for each expertise areas for on-the-job-training and skills transfer. DOED will provide sufficient office space, furniture, and support facilities to the CDTA consultants on time.

7. The CDTA will be implemented over 24 months from April 2013 to May 2015. It will require 51 person-months of consulting services (39 international and 12 national). ADB will engage a consulting firm or consortium of firms using its quality- and cost-based selection procedures in accordance with the Guidelines on the Use of Consultants (2010, as amended from time to time). Equipment financed by the CDTA will be procured under ADB’s Procurement Guidelines (2010, as amended from time to time). The CDTA will be disbursed in accordance with ADB’s Technical Assistance Disbursement Handbook (2012, as amended from time to time) and any appropriate trust fund policy guidelines.

C. Cost and Financing 8. CDTA will be financed by $1,500,000 on a grant basis by the Japan Fund for Poverty Reduction (JFPR), and administered by ADB. The Government of Nepal will provide local currency costs through in-kind contributions, including office accommodation, facilities, data, and other information. The detailed cost estimates and financing plan are given in Table 1.

2 A Upper Modi A Project can be considered as a PPP candidate.

3 THL recruitment policy and pay scale will be set up outside ones of NEA.

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Table 1: Cost Estimates and Financing Plan ($’000)

Total

Item Cost

A. Japan Fund for Poverty Reductiona

1. Consultants

a. Renumeration and Per Diem

i. International Consultants (39 person months) 1,061.2

ii. Domestic Consultants (12 person-months) 48.0

b. International/Local Travel 234.0

c. Reports and Communications 3.0

2. Equipmentb 12.8

3. Workshops, Resource Persons, and Seminars & Conferences 10.0

a. Facilitators

b. Training Program

4. Vehicle Rental 9.0

5. Miscellaneous Administration and Supportd 2.4

6. Contingencies 119.6

Total 1,500.0 a Administered by the Asian Development Bank.

b The equipment will become the property of the EA at the end of the TA. The equipment will include 2

computers, 1 printer, 1 scanner, 1 fax machine, and 1 copy machine. c

Includes $9,000 for temporary rent of vehicles to visit the EA and IAs including NEA’s subsidiaries located out of Kathmandu. d

Includes office utilities.

Source: Asian Development Bank estimates.

D. Outline Terms of Reference

9. The consultant team will cover ten areas of expertise: (a) power sector management, (b) financial management, (c) tariff analysis, (d) regulatory and legal aspects, (e) investment (f) information technology, (g) human resources and institution, (h) environment, (i) social development, and (j) contract and procurement. An international expert in power sector management will be the team leader, who will coordinate the inputs of all the other consultants, provide quality control on all outputs, harmonize proposals and recommendations, and ensure that the consultation process is adequate in terms of the stakeholder's participation and ownership. 10. The consultants’ outline terms of reference will include, but not necessarily be limited to, the following tasks: 11. Power Sector Management Expert (international, 8 person-months)

(i) Propose development strategies to the EA and IAs for each of hydropower development types and sizes, particularly to make synergy effects with JICA’s relevant technical cooperation for preparing a small and medium size hydropower development master plan.4

4 JICA. 2010. The Nationwide Master Plan Study on Storage Type Hydroelectric Power Development.

Appendix 10

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(ii) Review the existing regulations, policies, and plans for hydropower development, and assess the sector’s constraints for hydropower development. Prepare the sector assessment including the power sector performance and reforms, key challenges/opportunities, barriers and risks associated with hydropower projects.

(iii) Group potential hydropower projects into generic categories such as domestic or export, run-of-river or storage, or small or large capacity. For each category, evaluate options for ownership, structures, governance, pricing, returns, risks, and incentives of investments. Develop a strategy for hydropower development, and formulate a time-bound sector road map for policy actions as well as a long-term investment plan.

(iv) Develop strategic power system planning including power export and import strategy, demand and supply forecasting, and media strategy for facilitating investment.

(v) Strengthen DOED’s project identification capacity and bid management and set up consistent procedures for sequencing priorities of projects for private participation.

(vi) Clarify advantages and disadvantages of a public private partnership model and promote a demonstration structure (e.g., the Upper Modi A Project) with NEA.

(vii) Set up the government’s roles (e.g., guarantee mechanisms and criteria). (viii) Assess and formulate the benefit sharing among the project's stakeholders, particularly local

governments and communities. (ix) Review and assess an appropriate structure and governance framework between NEA and

its subsidiaries with other experts. (x) Formulate a time-bound plan to realize the NEA reforms, including its selected asset spin-

off. (xi) Set up a roadmap for an institutional capacity development programs for each of the EA and

the IAs with other experts. (xii) Strengthen DOED’s one-stop window functions for investment in hydropower projects from

both public and private sectors. (xiii) Assess the EA's and IAs’ management capacity to manage hydropower development

projects. Identify priorities for institutional capacity building with time-bound action plans with other experts.

(xiv) Help NEA ensure the end users’ affordability mechanism (e.g., any installment payment scheme) for new connection of rural electrification when required.

(xv) Support THL/NEA in finalizing the negotiations of the project management contract and its related agreements if any.

(xvi) Serve as a resource person for in-house seminars and workshop organized with other experts.

12. Financial Management Expert (international, 5 person-months)

(i) Review each action scheme in NEA’s FRP and propose a concrete action and schedule to be implemented.

(ii) Develop and assess financial projections to simulate results based on each action of FRP. (iii) Analyze forecasted load growth and the function-wise sector’s revenues and costs in relation

to tariffs, cost recovery, and cross-subsidy among customer groups and in the power sector’s value-chain process.

(iv) Review the existing financial management systems of NEA and THL and develop a capacity development plan.

(v) Support NEA and THL in carrying out the fund flow and disbursement mechanism for the Tanahu Hydropower Project if any.

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(vi) Develop a new corporate accounting policy, financial reporting, governing regulations, and corporate governance mechanism suitable for ETFC and NEA’s subsidiaries (e.g., THL) when required.

(vii) Develop manuals and guidelines for managerial accounting, cost accounting, budgeting, asset management, risk management, internal controls, and auditing suitable for ETFC and the NEA’s subsidiaries when required.

(viii) Collaborate with the information systems expert in determining the management information systems for financial management of ETFC and NEA’s subsidiaries (e.g., THL).

(ix) Help strengthen internal auditing and internal control functions of NEA and THL and finalize internal audit reports timely.

(x) Help resolve the issues raised by auditors of financial statements of NEA and THL. (xi) Serve as a resource person for in-house seminars and workshop organized with other

experts in doing the above tasks. 13. Tariff Expert (international, 5 person-months)

(i) Develop principles and procedures covering the following issues including (a) financial performance targets, (b) revenue requirement determination, (c) structuring tariffs toward full cost recovery and minimization of cross-subsidy, (d) targeting and delivering subsidies, and (e) incentive-based regulation with particular reference to incentivizing loss-reductions, on the international practices.

(ii) Develop a manual for studying costs of services on the international practices. (iii) Set up norms and methodologies for tariff setting of generation, transmission, and retail

supply on the international practices. (iv) Establish norms of power purchase agreements and cost based tariff mechanisms based on

the international practices. (v) Develop uniform systems of accounts, annual revenue requirements, performance reporting

and application formats for tariff filing submissions. (vi) Develop a toolkit for tariff setting and multi-year tariff principles. (vii) Develop customer service standards including consumer care, complaint handling,

grievance redress mechanisms. (viii) Help conduct customer’s awareness outreach programs. (ix) Support NEA and THL in finalizing and/or revising a power purchase agreement if any. (x) Serve as a resource person for in-house seminars and workshop organized with other

experts. 14. Regulatory and Legal Expert (international, 4 person-months; National 4 person-months)

(i) Review tariff related regulations and policies and propose any amendments if any. (ii) Set up judicial grievance and dispute resolution mechanism. (iii) Guide and promote commercial arrangement requirements including power purchase

agreements, concession agreements, and shareholders agreements on international practices.

(iv) Develop performance standards for utilities operations for enforcement and monitoring purposes and set up the performance base regulations.

(v) Develop (a) grid, distribution and metering codes; (b) interconnection codes; (c) operational performance standards in transmission and distribution; (d) system security standards; (e) supply regulations; (f) safety regulations; (g) power system planning standards; (h) sharing of assets and common facilities; (i) captive plant regulation, with other experts.

(vi) Develop governance codes of THL and NEA.

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(vii) Serve as a resource person for in-house seminars and workshop organized with other experts.

(viii) Support the contractual negotiation process with stakeholders in tendering, procurement, and financial arrangements and agreements as necessary.

15. Investment Expert (international, 4 person-months)

(i) Assess overall mitigation measures to improve investment climate in hydropower development in Nepal. Incorporate their requirements and impacts in the overall project design.

(ii) Review the existing Nepal’s financial market, associated policies and regulations to assess local financing potential.

(iii) Present investment policies, models and mechanisms in neighboring or similar countries based on comparative studies.

(iv) Promote the project structure of public private partnerships (PPP) and support strategic communications among stakeholders such as government ministries and agencies, potential private parties on PPP.

(v) Conduct a financial structuring study for the PPP demonstration project. (vi) Support THL and NEA in promoting negotiations with any capital contribution from a

selected private party who has experienced management and operations of projects similar to the Tanahu hydropower if any.

(vii) Update investment plans of NEA and its subsidiaries based on the financial projection models.

(viii) Set up a risk management mechanism for NEA’s subsidiaries such as THL. (ix) Support THL’s equity sharing with local investors in accordance with the laws and

regulations. (x) Prepare and conduct training needs assessment and develop capacity building for project

finance and treasury function. (xi) Facilitate potential investors, and prepare and evaluate pre-qualification and bid documents

for the PPP demonstration project. (xii) Serve as a resource person for in-house seminars and workshop organized with other

experts. 16. Information System Expert (international, 2 person-months)

(i) Review the EA and IAs’ existing information systems. (ii) Assess options for an integrated management information system (MIS) in terms of costs

(hardware, software, and implementation), timeframe, objectives, and products such as enterprise resources planning (ERP), or customized information systems.

(iii) Develop an IT strategy and road map to implement MIS. (iv) Design the hardware and software specification for bidding documents and assist in

evaluating and selecting the system implementation partner/vendor. (v) Assist project management for the MIS implementation. (vi) Establish a robust internet website for DOED, ETFC and NEA’s subsidiaries for strategic

communications. (vii) Serve as a resource person for in-house seminars and workshop organized with other

experts.

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17. Human resources and Institutional Expert (international, 2 person-months)

(i) Review and assess the responsibilities, organizational setup, and internal administrative processes for each of the EA and IAs.

(ii) develop and help implement a plan for institutional strengthening relative to organizational structure, operations, systems, program resources, and resource management (including financial, technological, human, and physical resources), internal audit, and accountability mechanisms, for each of the EA and IAs.

(iii) Develop and implement a corporate performance management system (e.g., key performance indicators at corporate, strategic business unit, functional and individual levels) for each of the EA and IAs.

(iv) Design and introduce a performance based incentive scheme in human resources management.

(v) Assist ETFC and NEA’s subsidiaries in defining human resources issues such as pay scales, designations, and service conditions, if any.

(vi) Incorporate provision for stakeholder consultation and monitoring mechanisms in case any negative impacts on human resources are foreseen in NEA restructuring planning.

(vii) Serve as a resource person for in-house seminars and workshop organized with other experts.

18. Environmental Expert (international, 3 person-months; National 4 person-months)

(i) Develop corporate environmental safeguard guidelines and frameworks for hydropower development based on relevant international standards and guidelines. Pay special attention to safety, water quality, cultural and ecological impacts to set up the baseline information for monitoring.

(ii) Prepare environmental management plan (EMP) manuals for hydropower project affected areas and the river catchments including upstream and downstream areas. Include monitoring programs (indicators, frequency, and reporting), and include methodologies for mitigating measures, and budgets and institutional arrangements to implement them, and assess proper environmental benefits and risks. Include manuals for livelihood restoration programs in EMP.

(iii) Develop environmental monitoring systems and safeguard monitoring reports. Support NEA and THL in implementing safeguard plans and their monitoring if necessary.

(iv) Assist NEA in developing the environmental impact assessment and safeguard plans for the PPP demonstration project based on the corporate policy frameworks.

(v) Assess and incorporate design and management to adapt the climate change and improve safety measures. Set up checklists for any environmental and climate change risks (e.g., flush floods and glacial lake outburst floods) and their mitigation measures.

(vi) Establish approaches of public consultations and communications with stakeholders including donors, civil society, NGOs, and media when applicable.

19. Social Development Expert (international, 3 person-months; National 4 person-months)

(i) Develop corporate social safeguard and gender mainstreaming guidelines and frameworks for hydropower development based on relevant international standards and guidelines.

(ii) Develop corporate social impact monitoring systems and safeguard monitoring reports including monitoring indicators to ensure the safeguard implementation and poverty reduction effects. Support NEA and THL in implementing safeguard plans and their monitoring if necessary.

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(iii) Help NEA ensure the end users’ affordability mechanism (e.g., any installment payment scheme) for new connection of rural electrification when required.

(iv) Incorporate social requirements of public consultation and/or stakeholder participation in tariff regulations and their rules and guidelines.

(v) Assist NEA in developing the social impact assessment and safeguard plans for the PPP demonstration project based on the corporate policy frameworks.

(vi) Develop and help NEA and THL implement corporate social action programs and community development plans and gender equality and social inclusion action plans in a participatory approach. Explore partnerships with host communities, grassroots NGOs and civil society for planning and implementation if available. Support NEA and THL in implementing any specific plans and their monitoring if necessary.

(vii) Develop THL’s and NEA’s manuals for community development plans, livelihood restoration programs, and gender mainstreaming with other experts.

(viii) Develop corporate systems for measuring and checking compliance with social safeguard requirements acceptable internationally.

20. Contract and Technical Management Expert (international, 3 person-months)

(i) Review the EA and IAs’ procurement and inventory management systems. (ii) Develop a policy and manuals for procurement, process, contracts, operations and

maintenance, and inventory management. (iii) Set up technical standards for hydropower development for the EA and IAs. (iv) Assess a technical feasibility for the PPP demonstration project. (v) Support the contractual process with EA and IAs in tendering, procurement, negotiation, and

financial arrangements and agreements as necessary. (vi) Support NEA and THL in promoting their procurement processes of the Tanahu Hydropower

Project if necessary.

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OUTLINE TERMS OF REFERENCE

Rock Mechanical Test

for THL

A. Background 1. Geological investigations for the Tanahu Hydropower Project (the project) have been conducted to clarify geological conditions of the project site as required at each stage. During the detailed engineering study (DES) stage, investigations were conducted for design in accordance with the recommendations in the JICA’s feasibility study, 2007, and additional geological investigations will be performed soon to obtain further information which will help bidders precisely estimate their bid price (will prevent bidders from estimating higher bid price with geological risks). 2. Project Supervision Consultant (PSC) will review all results of geological investigations carried out up to DES stage immediately after the commencement of their services. PSC consultant will prepare a plan on additional geological investigations such as drilling, excavation of adits and rock mechanical test in the adits, when they judge additional investigations should be required in order to ensure that the contractors should smoothly and effectively conduct the contractors’ detailed design of civil structures. It is noted that the additional geological investigation proposed by DES consultant and carried out during DES stage is named “Additional Geological Investigation Phase-1”, and that prepared by the PSC consultant is called “Additional Geological Investigation Phase-2”. B. Plan on Additional Geological Investigation Phase-2 3. A plan on the additional geological investigation Phase-2 was prepared at a maximum level, to prepare the budget. The summary of the Phase-2 investigation is listed in Table 1.

Table 1. Summary of Additional Geological Investigation Phase-2

No. Investigation Item Quantity 1 Drilling 1350 m 2 Exploratory Adit Excavation 733 m 3 Rock Mechanical Test in Adits

In-situ deformability test Block shear test Rock stress measurement by using HI Cell

6 points 6 sets 2 holes

4. ADB and THL already agreed to the following financing demarcation for implementation of the additional investigation as shown in Table 2:

Table 2. Financing Demarcation of Additional Geological Investigation

No. Investigation Item Financing Procurement Method 1 Drilling THL Contract between THL and

NEA laboratory 2 Exploratory Adit Excavation ADB NCB by THL 3 Rock Mechanical Test in Adits ADB ICB by THL

5. The rock mechanical test will be conducted by a consultant, which will be engaged according to ADB Guidelines on the Use of Consultants, under supervision of the PSC consultant.

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C. Schedule 7. The consultant services for rock mechanical test are expected to commence in the second half of 2014. Table 3 shows schedule of the services.

Table 3. Schedule on Rock Mechanical Test Year 2014 2015 Month Jul Au

g Sep

Oct Nov

Dec Jan

Feb Mar Apr May

Jun Jul Aug

Preparation work in home office

Inception Report

In-situ deformability test and block shear test in dam adits

In-situ deformability test and block shear test in powerhouse adits

Rock stress measurement in powerhouse adits

Brief test report

Draft final report

Final report

= Deliverables.

D. Terms of Reference for Each Expert

1. General

8. Tanahu Hydropower Project (the project) is in Tanahu District of Gandaki Zone in Western Region in Nepal. The project site is being developed by Tanahu Hydropower Limited (the client) established for the purpose of construction and operation of the project by Nepal Electricity Authority (NEA), a public power utility of the Government of Nepal. 9. The ToR stipulates consultant services for rock mechanical test. The consultant shall conduct the services ranging from preparation of a detailed test plan including a detailed schedule, testing at the site and analysis of testing data to preparation and submission of reports to the client in accordance with the ToR.

2. Location, Quantity and Objective of Rock Mechanical Test

10. The rock mechanical test shall be conducted in the exploratory adits which the client will excavate under a contract between the client and a Nepalese contractor. The test to be conducted is listed in Table 4.

Table 4. Location and Quantity of Tests

Exploratory adits In-situ deformability test

Block shear test Rock stress measurement by using

HL cell Powerhouse adit1 4 points 4 sets 2 holes

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to adit 3, EL 324m, L=283m, L=30m,

L=101m

(four blocks/set)

Dam left bank adit EL 320m, L=70m

1 point 1 set (four blocks)

-

Dam left bank adit EL 320m, L=70m

1 point 1 set (four blocks)

-

11. It is noted that the testing in the dam left bank and right bank adits will be conducted based on the geological assessments on investigations. Hence, the number of tests may decrease or the tests in the dam adits may be decreased. 12. The objectives of each test are to obtain detailed condition and mechanical properties of the rocks at the dam and the powerhouse sites through:

(i) In-situ deformability test; to obtain deformation properties of in-situ rock masses,

(ii) Block shear test; to obtain strength properties of in-situ rock masses, and (iii) Rock stress measurement by using HL cell; to assess the state of in situ

stress in the rock masses by measurement of the rock stress in a drilling hole by using Hollow Inclusive (HI) cell.

3. Standards of Tests

13. The consultant shall conduct preparatory work, test procedures, analysis on measurement data, etc., complying with international test standards such as “suggested method” of International Society for Rock Mechanics (ISRM) or other standards internationally used for each in-situ test.

4. Responsibilities of the Consultant 4.1 Drilling

14. The consultant shall conduct drilling of the two holes with relevant diameter and overcoring for the rock stress measurement.

4.2 Reporting 15. The consultant shall prepare and submit the following reports to the client;

(a) Inception report

16. Before the commencement of field work, the consultant shall submit inception report describing following contents;

(i) Name and tasks of chief technician staffs assigned to the project. (ii) Names of workers. (iii) List of equipment to be used for each rock mechanical test. (iv) Detailed procedure of each rock mechanical test and other proposed works. (v) Time schedule of the site works including mobilization and demobilization. (vi) Safety measures including the name of the chief safety controller, the list of

safety materials and the items of daily safety activity.

(b) Weekly field report

17. During the field work including mobilization and demobilization, the consultant shall submit weekly field report describing following contents;

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(i) Activities conducted in the field last week with relevant photographs. (ii) Activities conducted in the field last week. (iii) Issues to be solved if any.

(c) Brief test report

18. Immediately after analysis on measurement results, the consultant shall submit a brief report on test results. Timing of submission of the brief report shall be determined through discussion with the client after the commencement of the services.

(d) Draft final report

19. The consultant shall submit a draft final report compiling test results and describing test procedures, actual time schedule and difference form test standards if any.

(e) Final report 20. The consultant shall submit a final report into which the client’s comments will be incorporated, within one month after the consultant receives them.

5. Job Descriptions of Experts

21. In the light of the tasks of the consultant, each expert’s ToR will include, but not necessarily be limited to, the following tasks. Each expert will perform their tasks in collaboration with their team members. 22. The outlined terms of references for each expert are as follows:

5.1 Chief Rock Mechanical Test Specialist (International; 9.5 person-months)

(i) Take the consultant’s responsibilities of the services as team leader in the field and at their home office and coordinate time schedule of testing with the client.

(ii) Plan detailed program of all tasks for testing with time schedule to be carried out in the field and at the home office.

(iii) Supervise preparatory work at the home office such as preparation of list of equipment/devices/tools, checking of functions of equipment and devices for the testing, packing of equipment/devices/tools, etc.

(iv) Supervise custom clearance at the airport in the consultant’s country and the airport in Kathmandu.

(v) Supervise mobilization and demobilization at the site for in-situ deformability test and block shear test.

(vi) Supervise preparatory work of in-situ deformability test and block shear test in the field and also conduct tests in accordance with the test standards.

(vii) Conduct analysis on the measurement data in-situ deformability test and block shear test and calculate rock mechanical properties.

(viii) Prepare inception report, weekly field report, brief test report, draft final report and final report.

5.2 Rock Mechanical Test Specialists-1 (International; 9.5 person-months)

(i) Assist the chief rock mechanical test specialist in planning detailed program of tasks for the testing with time schedule to be carried out in the field and at the home office for in-situ deformability test and block shear test.

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(ii) Conduct preparatory work for in-situ deformability test and block shear test at the home office such as preparation of list of equipment/devices/tools, checking of function of equipment and devices for the testing, packing of equipment/devices/tools, etc.

(iii) Conduct tasks for mobilization and demobilization at the site for in-situ deformability test and block shear test.

(iv) Supervise activities of national technical staff and workers for all field work such as mobilization, testing and demobilization for in-situ deformability test and block shear test.

(v) Conduct preparatory work of in-situ deformability test and block shear test in the field and also conduct tests in accordance with the test standards.

(vi) Conduct analysis on the measurement data of in-situ deformability test and block shear test and calculate rock mechanical properties.

(vii) Prepare inception report, weekly field report, brief test report, draft final report and final report.

5.3 Rock Mechanical Test Specialists- 2 (International; 6 person-months)

(i) Assist the chief rock mechanical test specialist in planning detailed program of tasks for testing with time schedule to be carried out in the field and at the home office for in-situ deformability test and block shear test.

(ii) Conduct preparatory work for in-situ deformability test and block shear test at the home office such as preparation of list of equipment/devices/tools, checking of functions of equipment and devices for the testing, packing of equipment/devices/tools, etc.

(iii) Supervise activities of national technical staff and workers for all field work such as mobilization, testing and demobilization for in-situ deformability test and block shear test.

(iv) Conduct preparatory work of in-situ deformability test and block shear test in the field and also conduct tests in accordance with the test standards.

(v) Conduct analysis on the measurement data of in-situ deformability test and block shear test and calculate rock mechanical properties.

(vi) Prepare inception report, weekly field report, brief test report, draft final report and final report.

5.4 Geologist (International; 9.5 person-months)

(i) Assist the chief rock mechanical test specialist in planning detailed program of tasks for testing with time schedule to be carried out in the field and at the home office for in-situ deformability test and block shear test.

(ii) Conduct preparatory work for in-situ deformability test and block shear test at the home office such as preparation of list of equipment/devices/tools, checking of functions of equipment and devices for the testing, packing of equipment/devices/tools.

(iii) Check geological conditions in the exploratory adits and select the test points of rock deformability test and block shear test.

(iv) Prepare detailed geological sketches at testing points of in-situ deformability test and block shear test before and after testing

(v) Supervise activities of national technical staff and workers for field work such as mobilization, testing and demobilization for in-situ deformability test and block shear test.

(vi) Conduct preparatory work of in-situ deformability test and block shear test in the field and also conduct tests in accordance with the test standards.

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(vii) Assist other team members in conducting analysis on the measurement data and calculate rock mechanical properties from the geological viewpoint.

(viii) Prepare inception report, weekly field report, brief test report, draft final report and final report.

5.5 Senior Rock Mechanical Test Specialist (International; 2.0 person-months)

(i) Assist the chief rock mechanical test specialist in planning detailed program of tasks for rock stress measurement with time schedule to be carried out in the field and at the home office.

(ii) Take responsibilities of team members’ activities at the home office and in the field for rock stress measurement.

(iii) Supervise preparatory work for the rock stress measurement at the home office such as preparation of list of equipment/devices/tools, checking of functions of equipment and devices for the testing, packing of equipment/devices/tools, etc.

(iv) Supervise custom clearance at the airport in the consultant’s country and the airport in Kathmandu.

(v) Supervise mobilization and demobilization at the site for rock stress measurement (vi) Supervise preparatory work of rock stress measurement in the field and also conduct

tests in accordance with the test standards. (vii) Conduct analysis on the measurement data of initial stress measurement and

calculate rock stresses at the site. (viii) Prepare inception report, weekly field report, brief test report, draft final report and

final report.

5.6 Two Rock Mechanical Test Specialists (International; 2.0 person-months each)

(i) Assist the chief rock mechanical test specialist in planning detailed program of tasks for rock stress measurement with time schedule to be carried out in the field and at the home office.

(ii) Conduct preparatory work for the rock stress measurement at the home office such as preparation of list of equipment/devices/tools, checking of functions of equipment and devices for the testing, packing of equipment/devices/tools, etc.

(iii) Conduct mobilization and demobilization at the site for rock stress measurement. (iv) Supervise activities of national technical staff and workers for field work such as

mobilization, testing and demobilization for rock stress measurement. (v) Supervise drilling for rock stress measurement. (vi) Supervise preparatory work of rock stress measurement in the field and also conduct

tests in accordance with the test standards. (vii) Conduct analysis on the measurement data of initial stress measurement and

calculate rock stresses at the site. (viii) Prepare inception report, weekly field report, brief report, draft final report and final

report.

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TERMS OF REFERENCE Panel of experts

- Dam Safety Expert A. Background 1. The Tanahu Hydropower Project is located on the Seti River in Damauli, Tanahu District, Nepal. The project will provide stable electric power supply from a renewable energy source to cope with increasing power demand in Tanahu District and the interconnected Nepali power network, thereby contributing to national economic development, improvement of civil life of the population, and assisting to combat climate change. The project components include the construction of a hydropower plant (140 MW), and transmission and rural electrification. 2. To address the serious sedimentation load in the Seti River, the dam will be equipped with sediment flushing facilities. The facilities will consist of two flushing conduits embedded into the base of the dam wall in the middle of the river cross-section, with a sill level of 320 m asl. Three gates will be installed in each conduit that will be opened fully during sediment flushing operations once the reservoir level has been reduced to 345 m asl or lower. The reservoir will be emptied once a year and sediment will be discharged through the sediment flushing conduits by tractive force of river flow. 3. The project executing agency, Tanahu Hydropower Ltd. (THL) will employ Project Supervision Consultants (PSC) to manage project construction as well as the initial 5 years of project operation following the project commissioning. Once hired, the PSC will review and finalize the dam design, including structural safety and seismic design. A Dam Safety Expert will be appointed by THL to undertake periodic, comprehensive and independent reviews of the design and construction of the dam and other civil structures, initial filling of the reservoir and sediment flushing operations, during implementation and initial 5 years of operation of the project. The objectives of the reviews are to provide advice and guidance to THL and PSC to support safe, economic, state of the art designs; objectivity and credibility in the dam safety assessment; efficient, expeditious and high quality construction; minimization of adverse impacts on the physical and social environment from engineering perspective; and proper provisions for initial filling, sediment flushing and emergency preparedness. A Panel of Experts (POE) will comprise three experts including the Dam Safety Expert, an Environmental Expert and a Social Development Expert. The latter two experts will also be appointed to review and provide advice on all environmental and social aspects of the project. As far as possible, the POE shall meet concurrently, with the exception of special meetings which may be convened to review particular technical aspects. B. Scope of Work 4. The subjects on which the Dam Safety Expert is expected to comment and assess are listed below (The expert may have assistance from other experts if required). The expert should also comment on any other matter which it perceives to be important to the safe and successful completion and operation of the project.

(i) Flood Hydrology: The extent and sufficiency of data, the methodology for derivation of extreme and design floods (including floods due to precipitation as well as due to glacial lake outburst), the procedures for routing floods through the reservoir and the impact of floods downstream of the power plant;

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(ii) Seismic Hazard Assessment: The identification of sources of seismic activity, the assignment of earthquake magnitudes to each source, and the methodology for derivation of vibration parameters at the site for maximum credible and design basis earthquakes.

(iii) Engineering Geology: The quality and sufficiency of the geological investigations and

the interpretation thereof; the correctness of the geological and hydrogeological models of the region, reservoir area and dam site; the engineering implications with respect to foundation design, stability of natural and excavated slopes; and support of surface and underground excavations.

(iv) Rock Mechanics/Underground Excavations: Review of potential slides in reservoir

areas; design of surface and underground excavations, including selection of stable slopes; appropriate shapes and orientations for underground excavations; design of temporary and permanent support systems and linings; and drainage of excavated areas.

(v) Sedimentology: Estimates of sediment load that will enter the reservoir; the design and

operation of the sediment flushing system and the likelihood of achieving desired effects.

(vi) Concrete Dam Design, Construction and Concrete Technology: Issues to be considered include: the adequacy of the field & laboratory investigations & of their interpretation & application to the design; appropriateness of aggregate & cementitious materials selected; concrete mix design; design details; adequacy of the foundations & the treatment proposed; construction procedures specified in relation to the dams and foundations; instrumentation of the dams; and proposed monitoring program.

(vii) Hydraulic Structures Design and Layout: The hydraulic and structural design and

specifications for the spillways, energy dissipation facilities, diversion facilities, sediment flushing facilities, power tunnels and tailrace facilities; the procedures for routine inspection of the dam and checking safety of structures, including organization and staffing.

(viii) Construction of Dams and Hydropower Facilities: The construction planning studies,

temporary facilities, access to the sites, the master schedule for implementation, conditions of contract; contractors’ proposals in relation to plant, construction procedures, schedule, river diversion; the organization, staffing and procedures for managing the construction of the project and quality assurance.

(ix) Mechanical and Electrical Design of Hydroelectric Works: Specifications and

manufacturers’ proposals for turbines, generators and mechanical and electrical equipment in the powerhouse and switchyard, with particular emphasis on design provisions for turbines operating in sediment laden water, and state of the art design of generators, switchgear and control systems.

5. The Expert's work shall include, but not limited to, the following: (i) Provide high level and professional independent advice and guidance to support

objectivity and rigour in the dam safety assessment process. (ii) Share technical expertise and knowledge and contribute to dialogue amongst project

supervision consultants, EA, government and financiers.

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(iii) Conduct site visits to assess the performance of PSC and the contractors in terms of implementation of civil works.

(iv) Examine the monitoring program designed for the construction and operation phases on dam safety aspects to determine if objectives and activities are appropriate in light of current and predicted project impacts. Recommend revisions and/or additional components as necessary.

(v) Consult with relevant stakeholders during field visits; record their concerns and expectations; and develop recommendations to address valid concerns.

(vi) Conduct annual dam safety inspections during the initial 5 years of project operation. C. Meetings, Schedules and Output/Reporting Requirements

6. The POE will have a Chairman appointed from among the Members of the POE to coordinate internal and external communications of the POE, to call and chair its meetings, to optimise the membership's activity and to provide balance to its reviews and recommendations. The composition of the POE, and the areas of expertise which it covers may be varied during the course of the project as considered appropriate by THL in consultation with ADB and/or the cofinanciers.

21. The POE will convene at regular intervals to review the status of project progress. The frequency of meetings and their timing will be adjusted to conform to the schedule of project works in progress, but the time between meetings may not normally exceed six months. At each meeting, the scheduled dates for the next meeting and tentative timing for the subsequent meeting will normally be fixed to enable POE members to arrange their individual schedules. Extraordinary meetings of the POE may be called on critical situations, and the services of individual members may be solicited between meetings as considered necessary or desirable by THL with copies of their input being sent to other POE members.

22. The Expert will prepare and submit written proceedings of the meetings (regular or extraordinary), including observations and recommendations, within three weeks of the meetings, and in case of emergency will prepare technical memoranda or aide memoires during the meetings. A preliminary report will be prepared before the adjournment of each meeting.

23. One month prior to issuance of bidding documents for construction of headworks and underground powerhouse, the Expert shall submit an evaluation report on dam safety aspects of the design. During construction, the Expert shall prepare regular monitoring reports as required. During the initial 5 years of operation, the POE shall prepare and submit an annual dam safety assessment report in December of the same year.

24. All reports will be submitted to THL and through them to the cofinanciers for review.

D. Organization, Membership and Qualifications

25. The Dam Safety Expert shall have wide, specialized international experience of at least 15 years including developing countries in Asia, in the following fields:

- Planning and Design of Dams and Hydropower Facilities - Design of Underground Works - Embankment Dam Design - Hydraulic Design

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- Construction of Dams and Hydropower Facilities

26. At appropriate times during the design and construction of the Project, the Dam Safety Expert will be enlarged by the addition of specialists in the following fields:

- Flood Hydrology - Seismology - Sedimentology - Concrete Technology - Environment - Mechanical and Electrical Design of Hydropower Facilities

27. In addition the Dam Safety Expert may request the assistance on a temporary basis of specialists in other areas, where they consider it advisable.

28. The expert may be recruited as an individual consultant through firm. The person-months requirement for the Dam Safety Expert is as follows:

Places of Assignment: Days Estimated Dates (dd/mm/yyyy)

TOTAL DAYS 98 30/06/2013 (Intermittent basis)

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- Environmental Expert A. Background 1. The Tanahu Hydropower Project is located on the Seti River in Damauli, Tanahu District, Nepal. The project will provide stable electric power supply from a renewable energy source to cope with increasing power demand in Tanahu District and the interconnected Nepali power network, thereby contributing to national economic development, improvement of civil life of the population, and assisting to combat climate change. The project components include the construction of a hydropower plant (140 MW), and transmission and rural electrification. The project executing agency (EA), Tanahu Hydropower Ltd. (THL) will employ Project Supervision Consultants (PSC) to manage project construction as well as the initial 5 years of project operation following the project commissioning.

2. A Panel of Experts (POE) will be appointed for the project comprising a Dam Safety Expert, an Environmental Expert and a Social Development Expert. The POE members generally work together when on the assignment with the exception of special meetings which may be convened to review particular technical aspects.

B. Scope of Work 3. The Environmental Expert will monitor the implementation of environmental impacts and mitigation measures. The expert should also comment on any other matter which might be perceived as important by the project authorities to successfully complete the operation of the project. These activities are outlined in the following planning instruments:

(i) Environmental Impact Assessment (EIA) (ii) Initial Environmental Examination (IEEs) (iii) Environmental Addendum including Environmental Management Plan (EMP)

4. The expert will also refer to the Project Administration Memorandum and the loan documents.

5. The Expert's work shall include, but not limited to, the following:

(i) Review implementation plans to determine if this fully complies with ADB safeguards and to assess appropriateness of provisions in terms of mitigation measures, monitoring plan, budget, institutional arrangements and compliance mechanisms. Recommend ways to mediate with non-conformance reports and to resolve issues related to compliance;

(ii) Determine if the EMP provisions for mitigation and monitoring are being implemented properly by EAs, all contractors, and consultants.

(iii) Conduct site visits to assess the performance of THL and NEA and the contractors in terms of implementation of environmental mitigation and monitoring measures specified in the EMP. Consult with relevant stakeholders during field visits; record their concerns and expectations; and develop recommendations to address valid concerns;

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(iv) Determine if the EMP (for all project phases) is fully cost and if funding sources have been identified and committed.

(v) Comment on the cumulative nature of the impacts – both impacts that result from the project and those exerted on the project from other sources.

(vi) Recommend corrective actions in case environmental mitigation measures are not sufficient and/or considered to deviate from requirements of ADB’s safeguard policies.

(vii) Assess the adequacy of baseline surveys and analysis, and determine if there is a need to collect additional baseline data to be used as basis for assessing operational impacts in terms of water quality, hydrology, erosion and sedimentation, terrestrial and aquatic ecosystems, fisheries, biodiversity, and environmental issues linked to the principles of integrated water resources management.

(viii) Examine the monitoring program designed for the construction and operation phases (for water quality, forestry, biodiversity, wastewater, soil erosion and siltation, air quality, fauna, aquatic resources, solid waste, spoils) to determine if objectives and activities are appropriate in light of current and predicted project impacts. Recommend revisions and/or additional components as necessary.

(ix) Examine and recommend current institutional capacity within THL/NEA, particularly its environmental and social management unit to address environmental safeguards compliance issues.

(x) Review the time schedule for the environmental mitigation programs and assess whether the schedule is appropriate for effective implementation and whether it is in compliance with safeguard policies;

(xi) Review reports from consultants of the environmental mitigation programs (Seti River Fish Conservation Management Plan, Water Release and River Safety Management Plan, Wildlife Conservation and Awareness Management Plan, Watershed/Forest Management Plan), communicate with those consultants to determine if their advices and suggestions are fully complied by THL and NEA and the contractors.

(xii) Assess the capacity of THL and NEA in implementing of EMP. (xiii) Assess the operation of the grievance redress mechanism for dispute resolution.

Review grievance redress mechanism (GRM) consultative notes, decisions and comments to ascertain its adequacy, impartiality, and timeliness. Make recommendations to redress areas that, in the consultant’s view, may not conform to ADB safeguards and the government environmental regulations. Facilitate and mediate with EA to resolve any environmental issue which has not been resolved by GRM.

(xiv) Propose any actions in consultation with other POE members and project stakeholders, on any specific environmental issues which arise during project implementation.

(xv) Share findings and knowledge with EA and co-financiers, and contribute to initiate a dialogue amongst project supervision consultants, EA, government and financiers on environment impacts and mitigation measures.

(xvi) Meet the external monitoring organization and agree appropriate on-going monitoring strategies if any.

E. Meetings, Schedules and Output/Reporting Requirements 6. The POE will have a Chairman appointed from among the Members of the POE to coordinate internal and external communications of the POE, to call and chair its meetings, to

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optimize the membership's activity and to provide balance to its reviews and recommendations. The composition of the POE, and the areas of expertise which it covers may be varied during the course of the project as considered appropriate by THL in consultation with ADB and/or the cofinanciers.


8. The Expert will prepare and submit written proceedings of the meetings (regular or extraordinary), including observations and recommendations, within three weeks of the meetings, and in case of emergency will prepare technical memoranda or aide memoires during the meetings. A preliminary report will be prepared before the adjournment of each meeting.

9. After the completion of environmental mitigation activities, the Expert shall submit an evaluation report on the entire operation to the EA and co-financiers for review. During the construction phase the project, the Expert will prepare regular monitoring reports at least on annual basis on the progress of implementation of EIA, IEEs, and the Environmental Addendum with EMP as required. During the initial 3 years of project operation, the expert will prepare and submit an annual assessment report in December with other panel members.

10 All reports will be submitted to THL and through them to the cofinanciers for review.

F. Organization, Membership and Qualifications

11. The Expert shall have wide, specialized experience of at least 20 years in the following fields:

(i) Preparing and implementing environmental management plans for storage type hydropower projects;

(ii) Reviewing environmental baseline data; (iii) Designing and carrying out environmental impact analysis, baseline studies,

developing of detailed cost estimates and schedules for environmental management plans,

(iv) Executing environmental impact mitigation and monitoring plans; and (v) Implementing public consultation and disclosure processes.

12. The expert may be recruited as an individual consultant. The person-months requirement for the Expert is as follows:


TOTAL DAYS 98 From 30/06/2013 (Intermittent basis)

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- Social Development Expert

A. Background

1. The Tanahu Hydropower Project is located on the Seti River in Damauli, Tanahu District, Nepal. The project will provide stable electric power supply from a renewable energy source to cope with increasing power demand in Tanahu District and the interconnected Nepali power network, thereby contributing to national economic development, improvement of civil life of the population, and assisting to combat climate change. The project components include the construction of a hydropower plant (140 MW), and transmission and rural electrification. The project executing agency (EA), Tanahu Hydropower Ltd. (THL) will employ Project Supervision Consultants (PSC) to manage project construction as well as the initial 5 years of project operation following the project commissioning.

2. A Panel of Experts (POE) will be appointed for the project comprising a Dam Safety Expert, an Environmental Expert and a Social Development Expert. The POE members generally work together when on the assignment with the exception of special meetings which may be convened to review particular technical aspects.

B. Scope of Work

3. The Social Development Expert will monitor the implementation of social development activities including land acquisition leasing land through the negotiated settlement, community development, income restoration and improvement of project-affected persons (APs), and gender-related actions. The expert should also comment on any other matter which might be perceived as important by the project authorities to successfully complete the operation of the project. These activities are outlined in the following planning instruments:

(i) Draft Resettlement and Indigenous Peoples Plan (RIPP) (ii) Draft Community Development Strategy (CDS) (iii) Gender Equality and Social Inclusion Action Plan (GESI)

4. The expert will also refer to the Project Administration Memorandum and the loan documents.

5. The Expert's work shall include, but not limited to, the following:

(i) Review the entire process of negotiated settlement followed in land acquisition and leasing land for project activities paying special attention to the transparency and adequacy of the process and the quality of consultations with project-affected persons.

(ii) Assess the progress of implementation of RIPP. Determine whether the entitlements of AP including the affected indigenous peoples (janajathi) households are being provided on time.

(iii) Assess the impacts of CDS and GESI during the construction phase and first three-years of project operations.

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(iv) Visit project sites to assess resettlement impacts, mitigation measures, and conduct consultations with AP including the affected janajati households to ascertain their views on RIPP implementation.

(v) Review the time schedule for impounding, site development, land allocation, compensation, infrastructure development in the resettlement sites and assess whether the schedule is appropriate for effective implementation relocation activities of the affected people and whether it is in compliance with safeguard policies;

(vi) Assess the capacity of THL and NEA in implementing of RIPP, CDS and GESI. (vii) Assess the operation of the grievance redress mechanism for dispute resolution.

Review grievance redress mechanism (GRM) consultative notes, decisions and comments to ascertain its adequacy, impartiality, and timeliness.

(viii) Review and assist in revising (if required) livelihood restoration and improvement programs of the project paying special attention to the CDS.

(ix) Propose any actions in consultation with other POE members and project stakeholders, on any specific social issues which arise during project implementation.

(x) Share findings and knowledge with EA and co-financiers, and contribute to initiate a dialogue amongst project supervision consultants, EA, government and financiers on resettlement, socioeconomic development and project impacts on AP including indigenous peoples.

(xi) Assist EA to develop a comprehensive, user-friendly resettlement and social development database and to maintain it.

(xii) Examine and report on the socioeconomic conditions of self-relocated households using the SIA data as the baseline. Include their socioeconomic data periodically into the project social database.

(xiii) Facilitate and mediate with EA to resolve any social issue which has not been resolved by GRM.

(xiv) Meet the external monitoring organization and agree appropriate on-going monitoring strategies if any.

C. Meetings, Schedules and Output/Reporting Requirements

6. The POE will have a Chairman appointed from among the Members of the POE to coordinate internal and external communications of the POE, to call and chair its meetings, to optimise the membership's activity and to provide balance to its reviews and recommendations. The composition of the POE, and the areas of expertise which it covers may be varied during the course of the project as considered appropriate by THL in consultation with ADB and/or the cofinanciers.


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8. The Social Development Expert will prepare and submit written proceedings of the meetings (regular or extraordinary), including observations and recommendations, within three weeks of the meetings, and in case of emergency will prepare technical memoranda or aide memoires during the meetings. A preliminary report will be prepared before the adjournment of each meeting.

9. After the completion of land acquisition and leasing land for each project component through negotiated settlement modality, the Expert shall submit an evaluation report on the transparency, fairness and adequacy of the entire operation to the EA and co-financiers for review. During the construction phase the project, the Expert will prepare regular monitoring reports at least on annual basis on the progress of implementation of RIPP, CDS, and GESI as required. During the initial 3 years of project operation, the expert will prepare and submit an annual assessment report in December with other panel members.

10. All reports will be submitted to THL and through them to the cofinanciers for review.

D. Organization, Membership and Qualifications

11. The Expert shall have wide, specialized experience of at least 20 years in the following fields:

(i) Preparing and implementing compensation, relocation, income restoration action plans for large scale infrastructure projects, preferably for hydropower projects;

(ii) Reviewing social baseline data and database formulation and operation; (iii) Designing and carrying out social impact analysis, socio-economic baseline

studies, developing of detailed cost estimates and schedules for resettlement action plans, land acquisition plans,

(iv) Executing social impact mitigation and monitoring plans; and (v) Implementing public consultation and disclosure processes.

12. The expert may be recruited as an individual consultant. The person-months requirement for the Expert is as follows:


TOTAL DAYS 70 From 30/06/2013 (Intermittent basis)

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Outline of Terms of Reference Supporting and Monitoring of Land Acquisition and Resettlement

for THL

A. Scope of work

1. Experienced individual experts from NGO will be responsible for assisting and monitoring in the implementation of land acquisition and resettlement in compliance with the ADB approved Resettlement and Indigenous Peoples Plan (RIPP) and Safeguard Policy Statement (SPS), and the Project Administration Memorandum (PAM). The individual experts will assist the Environmental and Social Management Unit (ESMU) of the Tanahu Hydropower Limited (THL). The experts are expected to be recruited in accordance with the Guidelines on the Use of Consultants (2010, as amended from time to time). Any goods and equipment financed by the CDTA will be procured under ADB’s Procurement Guidelines (2012, as amended from time to time). For these purposes, the project provisions $387,000 under ADB finance. 2. The services are expected to be from April 2013 to December 2014. The outline terms of reference will include, but not necessarily be limited to, the following tasks:

1. Meaningful Consultations 3. For effective implementation of RIPP, it is imperative that there are regular consultations held with the affected persons (AP) especially those who are vulnerable. Vulnerable households include indigenous peoples, landless, women, especially women-headed households, poverty groups disabled and senior persons as defined in RIPP. The absence of legal title to land should not be a bar for compensation. 4. The NGO’s individual experts will engage in subsequent meaningful consultations with the affected communities especially members of the vulnerable households. These consultations would be to spread correct and adequate information regarding the project as well as to address any concerns or issues raised by the affected households. This would in turn foster a sense of security and confidence among the affected communities which is pivotal to smooth implementation of the RIPP. This will also help the affected household’s especially vulnerable households to access their rights and entitlements as well as seek answers to their queries at the local level/doorstep. 5. As part of these consultations, the NGO individual experts will also carry information campaigns. The NGO will be responsible for designing, planning and implementing an information campaign in the Project affected areas to inform the Project affected households about the project, its benefits and adverse impacts, the entitlement policy and procedures to avail their respective entitlements. The campaign would include measures such as distribution of information booklets, leaflets, notices and other materials among the AP (affected persons), community meetings, public announcements, and any other measures necessary to provide information to all the AP. The information campaign would include dissemination of information on the following:

(i) The need for land acquisition, wherever necessary; (ii) The likely consequences of the project on the communities; (iii) The resettlement and rehabilitation policy and entitlements; (iv) Assist AP in getting the compensation for their land and properties acquired;

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6. The experts will be responsible for advising the AP on how best to utilize any cash that may be provided under the project, with emphasis placed on using such funds in sustainable way e.g. purchasing replacement land for that acquired, starting income generation activity.

2. Verification of land acquisition and resettlement

7. The experts shall verify the information and actions contained in the IRPP and the individual losses of the AP. The experts will establish rapport with AP, consult and provide information to them about the respective entitlements as proposed under the IRPP, and distribute entitlement and identity cards to the eligible AP household heads. The identity cards may include a photograph of the AP, the extent of loss suffered due to the project, and the choice of the AP with regard to the mode of compensation and assistance. 8. The experts will develop coordination between the AP and the ESMU. This will be achieved through regular meetings with both the ESMU and the AP. All meetings and decisions taken shall be documented by the experts. The experts will also be responsible for the following:

(i) prepare a list of the project-displaced persons/families for relocation, enlisting the losses and the entitlements, along with their verification process. The experts shall display the list of eligible AP in prominent public places if required.

(ii) During the identification and verification of the eligible AP, ensure that each of the AP is contacted and consulted either in groups or individually. Specially ensure consultation with women from the AP families especially women headed households.

(iii) Monitor if the absence of legal title to land should not be a bar for compensation, resettlement and rehabilitation assistance, and if vulnerable groups are entitled to special benefit and assistance packages in addition to compensation and resettlement, in accordance with the RIPP.

(iv) While finalising the entitled persons for compensation/assistance, make a list of entitled AP, and distribute identity cards to each family head verified eligible AP.

(v) Ensure if the valuation costs of land and resettlement are reasonable at the replacement costs among the areas.

(vi) Update the EMSU’s database of AP and record resettlement information including the valuation, compensation payments, receipts, and dates, assess their compliance with RIPP, SPS, and PAM, before and after land acquisition and resettlement, and submit progress reports to EMSU, ADB, and a panel of experts on a semi-annual basis.

(vii) Ensure payments and land acquisition in compliance with RIPP, PAM, and ADB’s SPS in THL prepares withdrawal applications for ADB’s financing for the costs of land acquisition and resettlement.

(viii) Prepare an evaluation report at the end of land acquisition and resettlement.

3. Income Restoration

9. The experts will play a key role in the income restoration and rehabilitation measures for the adversely affected AP. As per the RIPP, these measures are applicable for those households who have been identified as vulnerable and those whose primary source of income will be affected by the project. 10. The surveys have identified that majority of the affected households will lose their agriculture land, businesses and others. The census has indicated that no households have been affected whose primary source of income is fishing in the Seti river. However migrant

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(floating) fisher-folk may do occasional fishing in the Madi River and in downstream areas of the Seti River as reported in the EIA (Environment Impact Assessment). Considering the same, the following responsibilities for the experts have been identified:

(i) Identify and categorize those AP whose primary source of income would be affected by the project. The experts will also ascertain the extent of impact on their sources of income.

(ii) Through meaningful consultation, apprise the eligible households regarding their entitlements as spelt out in the RIPP.

(iii) Identify the type of income restoration plan needed for each household depending on the extent of impact on them as well as the skill set they possess. This would be through meaningful consultations held with the households.

(iv) Undertake market feasibility studies to assess the economic feasibility of the options chosen by AP. In consultation with another consultant for the community development strategy (CDS), the experts will help ESMU plan out livelihood restoration activities as per CDS and RIPP. Emphasis will be paid on the vulnerable groups.

(v) The experts would help CDS carry out skill training as required (based on the skill assessment carried out).

(vi) The experts would also be responsible for liaisoning with the various government departments and financiers, in order to create a link among the government schemes, financiers’ requirements and the affected groups needs.

4. Cultural heritage

11. The experts will follow up any potential impacts and mitigation measures on cultural heritage including intangible cultural heritage if required. Where applicable, the experts will conduct surveys and advise appropriate actions in consultation with the stakeholders including ESMU, AP, local governments, and contractors.

5. Liaisoning with Relevant Government Ministries and Agencies

12. The experts along with the ESMU will be responsible for developing a program of interaction with government departments to ensure effective land acquisition, compensation and implementation of rehabilitation activities. These government departments and Ministries would include the following:

(i) Ministry of Home Affairs (Office of Chief District Officer): to implement resettlement and rehabilitation activities of the project

(ii) Ministry of Land Reform and Management (District Land Revenue Office): to verify parcels, facilitate land acquisition, transfer land entitlement as well as for valuation of land parcels

(iii) Ministry of Local Development (iv) Ministry of Forest, Department of Forest & Soil Conservation: to facilitate with

community forest related issues (v) Ministry of Agriculture: to develop and implement agriculture based livelihood

restoration programs and trainings (vi) District Development Committee: to facilitate land acquisition process and address

the grievance of affected population and the community (vii) Village Development Committee: to facilitate rehabilitation process and resolve

grievance redressal at the local level

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(viii) Compensation Determination Committee (ix) Local Consultative Forum: to facilitate information dissemination and support the

affected households in their relocation, compensation receipt and rehabilitation process

6. Assistance for AP in Grievance Redress Mechanisms (GRM)

13. The experts along with the Public Information Centres (PIC) established at the project level would be responsible for spreading information regarding the GRM to the AP. This would include information on the rights of the AP in the GRM and the procedure for accessing the GRM. The experts will also assist the AP in assessing the GRM if required by any AP.

7. Information Dissemination regarding HIV/AIDS

14. Considering the nature and scale of the project, it would necessitate spreading information regarding risks such as HIV/AIDS among the project affected communities. Some of the key suggested method of carrying out information dissemination programs would include:

(i) Organize public meeting in different project location and distribution of information and awareness material on HIV/AIDS and drugs/human trafficking.

(ii) Organize information dissemination session targeting to the risk group population on the different topics of HIV AID and drugs/human trafficking and likeliness of grooming sex trade and human trafficking activities due to the influx of outsiders in construction Projects and likeliness of increasing the extravagant activities like; alcoholism and gabling due to cash flow from the project.

(iii) Video show on related to HIV/AIDS and human trafficking and other social evils (alcoholism and gambling).

B. Selection and Staffing 15. The experts to be selected for the tasks enumerated above must have experience in resettlement implementation, carrying out information and awareness and livelihood improvement program. The experts have to be of national/international repute and have experience in working in projects of this scale and preferably involving multilateral funding. Specifically, key quality criteria include:

(i) Experience in direct implementation of programs in local, similar and/or neighbouring districts.

(ii) Experience in resettlement survey, planning, monitoring and evaluation including different social problems (e.g. HIV/AIDS and drugs/human trafficking, alcoholism and gambling).

(iii) Integrity to represent vulnerable groups against abuses, and experience in representing vulnerable groups, demonstrable mandate to represent local groups.

(iv) Availability of trained staff capable of including AP and target groups into the programs;

(v) Competence, transparency and accountability based on neutral evaluations, internal reports, and audited accounts; and

(vi) Demonstrated experience in computerizing database. 16. The following staffing provision for individual experts is given for smooth and effective implementation of the RP within the time frame:

(i) Social Development Expert/Team Leader