project implementation plan (pip) - winrip...

MINISTRY OF PUBLIC WORKS DIRECTORATE GENERAL OF HIGHWASYS

PROJECT IMPLEMENTATION PLAN (PIP)

WESTERN INDONESIA NATIONAL ROADS IMPROVEMENT PROJECT

(WINRIP)

JAKARTA, MARCH 2012

Project Implementation Plan (PIP) – March 2012 Western Indonesia National Road Improvement Project (WINRIP)

IBRD Loan No.8043-ID

Directorate General of Highways, MPW

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PROJECT IMPLEMENTATION PLAN (PIP) FOR THE IBRD ASSISTED

WESTERN INDONESIA NATIONAL ROAD IMPROVEMENT PROJECT (WINRIP)

1. THE PROJECT

1.1 Background

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

1.2 Project Objectives

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

1.3 Project Content and Timing

The works to be supported under the IBRD assisted component of WINRIP concentrate mainly on road betterment, road capacity expansion, and bridge replacement repair or duplication for that part of the National network located along the Western corridor of Sumatera During preparation of the Project, consideration was given to the need for developing the main road corridors, particularly those parts which are in poor condition or below target standard in terms of geometry. Thus the following works needs were identified: • Betterment treatments including minor widening, • Bridge replacement, duplication, rehabilitation, widening or major repair as required for

bridges associated with road links for which betterment treatments have been identified or otherwise are of high priority,

• A limited number of capacity expansion (‘CAPEX’) projects.




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Project preparation, including all feasibility studies and final engineering design of identified works, was initially funded by Grant Funds from the PHRD financing facility and latterly by Australian Trust Funds. Project Preparation Consultants (PPC), were appointed in December, 2007 to assist the DGH with full project identification and preparation, and with the final engineering design of all road and bridge sub-projects for commencement in the first 12 months of WINRIP implementation. The original WINRIP PPC Contract concluded their provision of services at the end of October, 2009. Additional WINRIP-related activities were undertaken between 1 May 2010 and 31 August 2010. The WINRIP Loan will provide funding assistance for civil works. It will also provide for Technical Assistance (TA) during project implementation to assist DGH by way of Core Team Consultants (CTC), Design and Supervision Consultants (DSC) and other TA Services for for road sector institutional development and contingency for disaster risk response. For reference purposes, separate batches of projects will be prepared and implemented. These batches of projects are termed Annual Work Programs (AWPs) in line with terminology used in other Bina Marga projects. They are not in fact “annual” programs as such but rather a series of multi-year programs, each commencing in consecutive years. Hence, it will called as just Work Programs (WPs). It is expected that implementation of the first Works Program (WP 1) will commence in the middle of 2012 and be completed by mid / late 2014. The second Work Program (WP 2) is expected to commence in early 2014 and be completed by late 2015 or middle 2016. The third Work Program (WP 3) is expected to commence in early 2015 and be completed by mid 2017. The loan will be closed on December 2017.

1.4 Project Preparation

1.4.1 Approach to Project Planning and Identification

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

WINRIP Region, which was conducted mainly using the Integrated Indonesian Road Management System (IRMS) database;

• Identification of major road corridors; • Review of DGH and regional priorities for road improvement; • Selection, prioritisation and programming of projects, particularly taking into account

economic viability, possible needs for land acquisition, or further environmental and social impact assessment;

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




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1.4.2 Selection of Sub-projects

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

Environmental Safeguards: It was agreed from the outset of the project that the Environmental and Social Safeguards would be those used for funding by the World Bank. The Environmental and Social Safeguards (ESS) prepared and agreed for the project are included as Annex 4. Thus, all environmental and social screening and assessment procedures will be undertaken according to the requirements of the ESS, using guiding procedures and key specifications from:

• World Bank OP4.01 “Environmental Assessment” and related provisions; • Related GOI regulations and DGH Guidelines.

Social Safeguards: Social safeguards have been established as part of a Land Acquisition and Resettlement Framework (LARF), based on World Bank OP 4.12, as set out in Part II of Annex 4. Whether a Simplified Land Acquisition and Resettlement Action Plan (SLARAP) or a full Land Acquisition and Resettlement Action Plan (LARAP) is required depends on the numbers of persons affected by the project. Threshold numbers are set out in Annex 4. The presence of any affected indigenous or vulnerable people may trigger the requirement for an Indigenous and Vulnerable Peoples’ Development Plan All candidate sub-projects have been reviewed for compliance with the requirements of the ESS, using the procedures summarised in Annex 4. The environmental and social screening process identifies: • Those sub-projects with significant environmental or social impacts requiring further

preparation of an AMDAL1 or full LARAP, as well as further investigation as required by the World Bank, before they can be considered for implementation;

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

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

1 Detailed Environmental Impact Assessment




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1.5 Project Description

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

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

This will cover three work programs of betterment and capacity expansion of approximately 715.6 km including replacement of 194 meters of bridges. This civil works program will be executed in three Work Programs (WP), as summarized in Table 1.1. The table shows the IBRD assisted scope and costs of civil works at estimated current (year of implementation) prices, excluding taxes. Table 1.1 : Proposed Physical Works by Program

Type of Works

WP 1 WP 2 WP 3 Km US$

mn Km US$

mn Km US$ mn

Road Betterment - - 53.10 22.77 - - Capacity Expansion 137.10 79.70 314.60 127.67 207.60 74.58 Bridge works 0.100 1.94 - - 0.08 2.06 TOTAL (excluding tax @ current prices)

137.20 81.64 367.70 150.45 207.68 76.65

* Contingency costs not included - ** including 194 meters of bridges The first Works Program (WP 1) will be started in middle/end 2012, and funds are included in the 2012 budget. Table 1.2 presents details of the First Works Program (WP 1). Apart from minor temporary land acquisitions for bridge works at two sites, no projects require land acquisition. Also, there are no outstanding environmental or social issues which require studies to be completed. Thus, there are no foreseeable impediments to implementation. Table 1.2 : IBRD Assisted WRIP Civil Work AWP-1

No Province Link No.

Link Name

Cla

ss R

oad

Type

Road Works Bridge Works Total Cost

From

To

Len

gth

Tre

at-m

ent

Cos

t (20

10)

No Len

gth

Cos

t (20

10)

2010

pri

ces

Acc

um

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

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




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1 Lampung 053.0 Krui – Biha K1 IU 221,5 246,5 25,0 Bmnt

to 7 m. 148.66

8 148.668 16.52

2 West Sumatra 047.2

Padang Sawa – Simpang Empat

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

189.810 189.810 21.09

2a West Sumatra 34.1

Air Gadang Bridge

K1 IU New Bridge 1 100 17.580 17.580 1/95

3 West Sumatra 047.1

Manggopoh – Padang Sawah

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

152.435 152.435 16.94

5 Bengkulu 015.3 Ipuh - Bantal K1 IU

0,0 49.7 49.7 Bmnt to 7 m.

226.275 226.275 25.14

It will be noted that all road sub-projects have been subject to economic appraisal and have estimated Economic Internal Rates of Return (EIRR) in excess of 15%. These were selected for inclusion and are subject to completion of environmental and social screening, to confirm that there is no land acquisition or resettlement requirements remain outstanding. Final Engineering Designs, Engineer’s Estimates and bidding documents have been completed for all projects proposed for WP 1. Sub-projects to be included in WP 2 and WP 3 have also been determined. They are listed in Annex 1. Final Engineering Designs and Engineer’s Estimates for all WP 2 and WP 3 proposed works require preparation or finalization. In the cases of some projects, preliminary Engineering Designs were prepared during Project preparation which will require review and possible amendment by the Design and Supervision Consultant prior to procurement. The costs presented in Table 1.1 and Annex 1 are planning estimates only, and the overall scope and contents of WP 2 and WP 3 may need to be revised as and when revised costs and budgets are determined. The following maps show: Map 1: Map showing the WINRIP Region on the Island of Sumatera. Map 2: Location of WINRIP works packages in North Sumatera Map 3: Location of WINRIP works packages in West Sumatera Map 4: Location of WINRIP works packages in Bengkulu. Map 5: Location of WINRIP works packages in Lampung




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Map 1: WINRIP Region




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Map 2: WINRIP North Sumatera




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Map 3: WINRIP West Sumatera




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Map 4: WINRIP Bengkulu

Project Implementation Plan (PIP) for WINRIP IBRD 8043-ID

Clean Final PIP_WINRIP_IBRD 06032012 11

Map 5: WINRIP Lampung



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

This component provides consulting services to support project management and implementation so as to ensure implementation efficiency and overall quality of the works. It also includes funds for a small amount of training of DGH staff and for incremental operating costs for the project. This will provide support to the MPW for the implementation of the civil works, including: (a) provision of Core Team Consultants (CTC), Design and Supervision Consultants (DSC) and road safety audits; (b) Project management support and technical audits. This is directly related to the implementation of the civil works and covers consulting services for design and supervision of the civil works in Component 1; management support and technical audits to help improve the quality of construction and support to governance improvements during procurement and implementation; and a series of systematic road safety audits of road designs for all project roads in Component 1. This is to ensure compliance with road safety standards and regulations, identify road hazards and undertake remedial treatments for safety improvements. Project Management Core Team Consultants (CTC). The CTC will provide support to the PMU and DGH in the management of the Project, based in Jakarta. Their tasks include financial and progress monitoring and reporting, information management and dissemination, quality assurance and performance review for the Design and Supervision Consultants, implementation and monitoring of the anti-corruption action plan, support for project monitoring and evaluation, and support for implementation of a training program to support project management and implementation. Outline scope of services and estimated resources required by the CTC are included in Annex 2 to this PIP. The CTC Team will also include Procurement Specialist, who will provide support to the Bina Marga Project Managers and Procurement Committees (POKJA), to help ensure that procurement and award decisions are undertaken in such a way as to avoid collusive and fraudulent practices. The team will be based in Jakarta, but will spend extended periods of time in delivering the services in the Provincial Satker offices. Design and Supervision Consultants (DSC). A Design and Supervision Consultant (DSC) will be responsible for design of WP 2 and WP 3 civil works and supervision of all civil works. They will have the role of ‘Engineer’ under a FIDIC-type contract. The tasks include the preparation and maintenance of a quality assurance plan, validation and updating of designs, supervision of all civil works, environmental and social monitoring and management, and support for financial and progress monitoring and reporting. The DSC will also be responsible for quality assurance of materials and workmanship, certifying whether or not contractors have achieved the required results, as well as documentation and reporting based on the financial management plan. They will prepare a Quality Assurance system covering all subprojects, and continuously monitor the effectiveness of their supervision procedures. The team will be contracted and managed by DGH through the Bina Marga Regional Office (Balai II), and will be based in Padang, West Sumatra. Outline scope of services and estimated resources required by the DSC are included in Annex 2 to this PIP. Interim Arrangements for WP 1. In the period before the CTC is mobilized, since Project Preparation Consultants had been demobilized, an individual consultant subject to agreed on resources - will provide advisory support to procurement committees for the procurement of civil works.



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

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

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

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

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



1.6 Project Cost

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

No Component Estimated

Project Cost Estimated GOI Share

Estimated IBRD Share

1 Betterment and Capacity Expansion of National Roads 2 314.9 94.51 220.41

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

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

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

(d) Contingency 6.17 1.85 4.32

2 Implementation Support 16.00 0 16.00 (a) Core Team Consultant 5 0 5 (b) Design and Supervision Consultant 10 0 10

(c) Incremental Operating Costs including technical audits 1 0 1

3 Road Sector Institutional Development 1.00 0 1.00

Capacity Building for DGH Environment/Risk Mitigation and Road Safety Unit 1.00 0 1.00

4 Contingency for Disaster Risk Response3

0 0 0

5 Unallocated 4 18.1 5.5 12.6 TOTAL 350.0 100.0 250.0

1/ The cost share is 70% IBRD and 30% GOI for component 1 and 100% IBRD for component 2, 3 and 4. 2/ Costs exclude cost of land acquisition and resettlement as well as taxes which are funded directly by the Government. 3/ Contingency for Disaster Risk Response will be kept zero while the Government can utilize project budget for rapid response with agreed conditions subject to reallocation or additional finance later. 4/ Unallocated consist of mainly physical and price contingencies for civil works.



1.7 Project Rationale and Benefits

1.7.1 Lessons Learned from Previous Projects

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

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

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

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

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

v. Supervision-friendly design. Past road projects such as EIRTP-1 and 2 included many road segments scattered over a wide geographical area. This scattering complicates



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

For WINRIP the design and design checking processes have been strengthened. A comprehensive Design Specification, and Final Engineering Design and preparation of associated Bidding Documents for WP 1 is being undertaken directly by the Project Preparation Consultants (PPC). The implementation arrangements have been clarified to enable the consulting engineers in civil works contracts to have clearer authority and responsibility and thus improve accountability for approving and paying for completed works. Monitoring of the effectiveness of supervision procedures will be undertaken by the DSC and overseen by the CTC. Technical audits will also address quality of work issues, and will be used to verify the adequacy of all works. The Project Management Manual is prepared in separated document ready for WINRIP implementation. 1.7.2 Benefits and Target Population

Project beneficiaries will be road users in participating provinces, districts and towns in the four provinces included in the WINRIP region (North Sumatra, West Sumatra, Bengkulu and Lampung). Direct beneficiaries of the project include people who live in the vicinity of the project area who directly benefit from the improvement of the road sections financed by the project. The project road sections traverse 12 districts3 with a total population of more than 4 million4of which around half are women. In addition, the betterment and maintenance of roads will create employment for people.

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

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

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

1.7.3 Project Economic Evaluation

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

3 Lampung Barat, Pasaman, Pasaman Barat, Agam, Mokomuko, Tapanuli Tengah, Pesisir Selatan, Padang Pariaman, Tanggamus, Bengkulu Selatan, Bengkulu Utara, Lampat Barat. 4 2010 population estimated using the 2000 population census and an annual population growth rate of 1.136%



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

1.8 Environmental and Social Safeguards

1.8.1 Environmental Safeguards

GoI environmental safeguards for WINRIP are based on the Environment Impact Assessment System (AMDAL) as mandated by various laws and regulations. Annex 4 details the Environmental and Social Management Framework (ESMF) / Environmental and Social Safeguards (ESS) adopted for WINRIP. All proposed WINRIP subprojects are subject to environmental impact screening (Figure A4-1, Annex 4) to identify one of three treatments: i) basic environmental clauses, ii) an environmental mitigation and monitoring plan (UKL/UPL) report or iii) a full EIA (AMDAL). Processes ii) and iii) must include an examination of potential impacts on the biophysical, socio-cultural and built environment,. The extent of the social impact in terms of land acquisition and resettlement has an impact on an ANDAL only when land acquisition extends to more than 30 hectares outside the RoW for inter-urban roads, 10 hectares for medium size cities and 5 hectares for big size cities. In such cases a full AMDAL is triggered. Mitigation and monitoring measures must be provided for all impacts not complying with GoI regulations and standards. Projects which are identifed as potentially generating significant environmental impacts require a full Environmental Assessment (AMDAL). This large field study will identify whether the project as designed can proceed, and the mitigation measures needed to be included. Projects triggering an AMDAL require referral to the World Bank, and additional study may be required to satisfy their requirements. 1.8.2 Joint Application of GoI and World Bank Environment Safeguards

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



1.8.3 Social Safeguards

The GOI and the World Bank have agreed to apply the Work Bank’s OP 4.12 and based on that a Land Acquisition and Resettlement Planning Framework (LARF) has been prepared. The LARF defines conditions under which project-affected-people and households are identified and categorized, how compensation is established and distributed, and how follow-up monitoring is to be undertaken. Current GoI regulations (Presidential Proclamation No. 65 2006; Perpres No 65/2006) regarding land acquisition and compensation will be used in cases where the Framework provides less specific instructions and where Indonesian laws must be applied. The WINRIP process as defined in the LARF requires that either a full Land Acquisition and Resettlement Plan (LARAP) or an Abbreviated LARAP (A_LARAP) be completed whenever there are people who lose their property or fixed assets. Specifically, if ≥ 40 households or ≥ 200 people are affected, and if any minority or vulnerable people are affected a LARAP is needed. If < 40 households or < 200 people are affected an SLARAP is to be undertaken5. In the event that land acquisition takes place for any subproject within 2 years of the start of any proposed WINRIP LARAP exercise, all relevant data on land acquisition must be provided to DGH and a Tracer Study conducted. This includes a description of the process applied, its schedule, compensation process and entitlement data, amount of land acquired, location and number of HH or individuals compensated, the amounts provided and a complete list of all those compensated (usually available in tabular form). The CTC, on behalf of DGH will then conduct a “tracer study”, including interviewing a sample of project-affected-people (PAPs) to independently certify for the Government of Indonesia and the World Bank that the LARAP process was completed fairly and credibly. All A_LARAPs, while prepared by the DSC, will have primarily Kabupaten-level involvement. For LARAPs the provincial BAPPEDA’s and related local governments where the subprojects are located will be directly involved in implementing this process, and in forming a Land Acquisition Committee (LAC) as defined in Perpres No. 36/2005, which will govern all entitlement and grievance issues, plus oversee the compensation. It is likely that a local NGO or university will be involved as independent compliance monitors. Should any proposed WINRIP subprojects involve construction along existing national roads and bridges in areas where indigenous people live and where either land or fixed assets are at risk, an Indigenous People’s Development Plan will be prepared, as defined in the World Bank Framework. Guidance will be sought from the Indonesian Department of Social Affairs (Kementerian Sosial) and all relevant GoI laws and regulations will be referenced.

1.8.4 Environmental and Social Safeguards Due Diligence

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

5 Also, if <10% of the physical assets are lost and no people are displaced, an A_LARAP may be all that is needed.



1.8.5 Health and Safety

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



2. INSTITUTIONAL

The institutional arrangements for implementation and management of WINRIP will be adapted and improved from that for EIRTP-1, and on going program SRIP, which was designed for National and Provincial programs. The overall Project Organisation is shown in Figure 2.1, and particular aspects are reviewed in this section.

2.1 Organisations Responsible for Project Implementation

An inter-agency Steering Committee chaired by BAPPENAS’ Deputy for Production, Trade and Infrastructure and including representatives from the Ministry of Finance (MoF), and Ministry of Public Works (MPW) is responsible for facilitation of coordination among the Ministries for the purposes of Project implementation. DGH within MPW is the Executing Agency (EA) for the Project. The Steering Committee will have a Secretariat chaired by the Director of Transportation, Bappenas with members appointed from the implementing agency within the Directorate General of Highways as well as the Bureau of Planning and International Cooperation of the Secretariat General, Ministry of Public Works. The Central Government working group consists of DGH as the Executing Agency and the Bureau of Planning and International Cooperation of the Secretariat General, representing the Ministry of Public Works. DGH is represented by the Directorate of Planning, Directorate of Technical Affairs, and the Directorate of Implementation Affairs Region I and the Balai (Implementation Regional Office).. The project organisation for implementation of civil works in Non-Metropolitan areas is shown in Figure 2.1.



2.1. PROJECT ORGANIZATION STRUCTURE

DIRECTORATE OF IMPLEMENTATION

REGION I, DGH

DIRECTORATE OF PLANNING,

DGH

DIRECTORATE OF TECHNICAL AFFAIRS, DGH

WESTERN INDONESIA ROAD IMPROVEMENT PROJECT (WINRIP)

PMU

DINAS

WORLD BANK GOVERNOR

CTC DSC (Engineer)

SATKER/PPK Civil Work

SATKER Design Supervision

CONTRACTOR

BALAI Regional Office

Coordination

Command

Contractual

MINISTRY OF FINANCE

BAPPENAS

MINISTRY OF PUBLIC WORKS DIRECTORATE GENERAL OF HIGHWAYS

EXECUTING AGENCY


WINRIP PIP

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

Table 2.1: Summary of Roles and Responsibilities for WINRIP Implementation

Agency/Position Role Responsibilities

Minister of Public Works

Oversee Executing Agency

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

Director General of Highways (DGH)

Executing Agency Approve contracts up to Rp. 50 billion Approve contract variations involving price increases Issue Project Management Manual

DGH Directorate of Planning (Dit Bipram)

Planning, programming of subprojects, packaging

Manage PMU Manage procurement, implementation of CTC

Budget for all Project activities Establish, direct and supervise the Project Management Unit (PMU) Manage CTC contract (financial) through Bipram’s Work Unit (Satker) Manage procurement of PMU equipment

DGH Directorate of Technical Affairs (Dit Bintek)

Establish technical standards Approve designs for Non-Metropolitan roads / bridges

Manage technical audit Manage environmental aspects for all road / bridge works Approve design standards, standard bidding documents and specifications for all road / bridge works Approve designs for Non-Metropolitan roads/bridges Manage procurement of steel bridge trusses Supervise road safety component

DGH Directorate of Implementation Affairs Region I (Dit Binlak Wilayah I)

Managing, controlling, monitoring and evaluation the implementation for consultant and TA DSC

Manage and controlling the implementation of Works and TA through Balai. Approve technical justification to Subdit for Bitpran.

Regional Implementation Agencies (Balai Pelaksanaan)

Manage procurement, implementation of DSC Oversee implementation of road and bridge works in Non- Metropolitan areas

Manage DSC services (technical) Manage DSC services (financial) through Dit. Binlak Wilayah 1’s Work Unit (Satker) Assist Director General in civil works contract matters Ensure that agreed standards and procedures are applied, conduct quality assurance of works and environmental and social safeguards


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Agency/Position Role Responsibilities

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

Manage procurement and implementation of works

Administer civil works contracts as the Employer (implementing unit for civil works)

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

Design & Supervision Unit (Satker P2JN) and related SNVT

Liaison for Technical audit

Liaise between Dit Bintek, CTC and specific works unit for technical audit Provide testing facilities for technical audit under Dit Bintek

Project Management Unit (PMU)

Secretariat (channel of communications) between IBRD and GOI, and between all GOI units implementing Project components Ensure effective implementation of the ACAP

Monitor project status and all related commitments Prepare Financial Monitoring Reports Keep Project Management Manual updated and keep implementing units aware of their responsibilities Manage CTC services (technical) Manage effective implementation of provisions specified in ACAP

Provincial Public Works Agencies

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

Assist Director General / Directors / Balai as required

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

Within the Directorate General of Highways, the Directorate of Planning (Direktorat Bina Program = Dit Bipram) is responsible for planning, programming and budgeting of works on National roads including land acquisition costs. The Directorate of Planning (DoP) of DGH as the lead Implementing Agency (IA) for the Project will form a Project Management Unit (PMU-WINRIP). PMU-WINRIP will be chaired by the Director of Planning in DGH. The PMU-WINRIP will be responsible for coordination of all WINRIP activities, and the Director General of Highways is ultimately responsible for oversight of all procurement Standards for technical design, bid documents, specifications and quality control for all works will be authorised by the Directorate of Technical Affairs - DTA (Direktorat Bina Teknik, Bintek) of DGH through its Sub-Directorate of Road Engineering (Sub Dit Teknik Jalan) and Bridge Engineering (Sub Dit Teknik Jembatan) will supervise the design of civil


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works by consultants. Urban works adopt Bintek standards for design, bid documents, specifications and quality control. Standards and procedures for environmental management and monitoring for all works will be prepared by the Sub-Directorate of Environmental Engineering and Road Safety (Sub. Dit. Teknik Lingkungan dan keselamatan Jalan) of the Directorate of Technical Affairs (Direktorat Bina Teknik) of DGH. Any land acquisition to be funded by central government for urban roads is managed by the Sub-Directorate of Land Acquisition (Sub. Dit. Pengadaan Lahan) in the Directorate of Freeways and Urban Roads. For non-urban roads, any land acquisition is managed by the respective Work Unit (SatKer) and RS. In the controlling and coordinating as well as evaluation and monitoring the physical implementation of Works and Technical Assistance in particular supervision are the responsibility of Directorate of Implementing Affairs – DIA – Region, hence the Region 1 of Sumatera. The Directorate General of Highway has an ad-ministrative unit located in each region called “Balai”. The Balai assigns a “Satker” (project manager) at the provincial level to handle all packages in that province. Satkers will also assign a Pelaksana Kegiatan (sub-project manager) named “Pejabat Pembuat Komitmen (PPK)” for each package. Balai are responsible for national road project implementation and, in particular, also assign a separate project manager for design of National road works, called Perencanaan Pengawasan Jalan dan Jembatan Nasional (P2JN). P2JN report to the respective Directorate within DGH. The Balai through the project managers are responsible to facilitate and assign project tasks to the relevant Provincial and Kabupaten public works departments (as needed). In relation to procurement process, each “Satker” will appoint working group procurement committee (POKJA) for works. These procurement committees should comply with the Presidential Decree of Republic of Indonesia No. 54/2010 and for this Project will also Procurement Guidelines and Consultant Guideline, as well as the Anti Corruption Action Plan. The Director General of Highways is assisted by the Regional Implementation Agencies (Balai Besar Pelaksanaan Jalan Nasional (BBPJN) : Balai 1 that covers the northern part of Sumatera is located in Medan. Balai 2 that covers the western and central part of Sumatera is located in Padang, and Balai 3 that covers the southern part of Sumatera is located in Palembang. The DSC will be managed by the Regional Implementation Agency (Balai Besar Pelaksanaan Jalan Nasional) located in Padang, and responsible for North Sumatera, West Sumatera, Bengkulu and Lampung, Training is the responsibility of Personnel and Administration Division of the DGH Secretariat. Financial administration is the responsibility of each agency allocated a budget, overseen by DGH Secretariat’s Finance Division. Loan accounting and financial monitoring is the responsibility of the PMU. The financial management arrangements are further described in Section 3.3 of this PIP.

2.2 Appointment and Delegation of Authority of the Engineer

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


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

2.3 Project Management and Staffing

2.3.1 Project Management Unit (PMU-WINRIP)

Project management will be coordinated through a Project Management Unit (PMU-WINRIP) which will be established before Loan Effectiveness by a decree of the Director General of Highways. The PMU-WINRIP will be responsible for day-to-day management and implementation of the Project. It will be chaired ex-officio by the Director of Planning (Bipram) in DGH. The Executive Head of the PMU shall be a government official with sufficient project experience to provide for the efficient functioning of the PMU. The PMU shall be provided at all times with adequate funds and other resources, and staffed by qualified and experienced personnel in adequate numbers, as shall be necessary to accomplish its functions, responsibilities and objectives. The responsibilities, structure and staffing of the PMU-WINRIP and a description of the equipment and incremental operating costs are described in Annex 5 to this PIP. The PMU will be supported by consultants, Core Team Consultants (CTC) and the Project Preparation Consultants (PPC) until the services of the latter are finished. The activities of the CTC are summarized in Annex 2. PMU will have the responsibility to oversee the implementation of the Anti-Corruption Action Plan (duties of PMU in Annex 5).

2.3.2 Project Management Manual

A comprehensive Project Management Manual (PMM) is prepared that will describe all requirements and procedures that must be followed by all parties, covering such areas as: • Procurement regulations, procedures and requirements; • The Financial Management Plan, including budgeting, disbursement, accounting and

reporting of project finances, and auditing; • Project Implementation Management Information and reporting systems and

procedures, including the financial management information system (FMIS); • Provisions of the Anti-Corruption Action Plan; • The Environmental and Social Safeguards (ESS) Because of the large number of separate agencies, project managers and procurement committees involved, a training program will be carried out prior to and during project implementation, as described in Annex 9.


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

2.4 Roles of Other Institutions

A significant number of other institutions will participate in and contribute to the project. For ease of presentation, these are summarised in the table below. Table 2.2 : Roles and Responsibilities of Other Institutions

Agency Role Responsibilities

Badan Perencanaan Nasional (National Development Planning Agency – BAPPENAS)

Chair of Steering Committee

National investment strategy Coordinate GoI policies in relation to Project Annual budget preparation

Ministry of Finance (MoF) DG Budgets DG Treasury DG Debt Management

Budgeting Accounting

Budget and Treasury policy Annual budget preparation Budget execution and reporting Loan Negotiations and Loan Repayments

Bank Indonesia Disbursement processing

Disbursement processing Operation of Special Account

Supreme Audit Agency (BPK) Inspectorate General (IG) of MPW

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

2.5 Coordinating Mechanisms

Every six months there will be a meeting between IBRD, MPW and the MOF to review measures taken in response to key audit report findings (see ACAP, Annex 11). It will be the responsibility of the Steering Committee to coordinate central government ministries and agencies. For day-to-day implementation, the Steering Committee will appoint staff to maintain coordination between the Steering Committee, the PMU and the other institutions outside MPW. Coordination within DGH will be facilitated by the Head of the related DGH Regional Implementation Agency (Balai). The Balai will monitor the timeliness and accuracy of the periodic reporting of project performance and financial data from each project, and assist to overcome any problems. Similarly, the Regional Office will provide necessary assistance to ensure proper coordination and reporting between the DSC and the PMU and its CTC.

3. PROJECT ADMINISTRATION

3.1 Monitoring and Reporting Arrangements

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


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• Physical progress of implementation of the project components • Financial performance (and comparison where appropriate with corresponding physical

achievements) • Compliance with prescribed procedures including contract administration • Achievement of overall project objectives. These monitoring and reporting arrangements will be enumerated in detail in the PMM. For financial and audit aspects, Section 3.3 provides details. A separate Project Monitoring and Evaluation program will be undertaken under the direction of IBRD, as described in Section 5. The following intermediate and final progress reports will summarise all actions and outputs: i. Financial Monitoring Reports (FMR). A quarterly Financial Monitoring Report (FMR) will

be prepared by DGH/PMU and submitted to IBRD. The FMR will monitor and report all aspects of the financial performance of the project, including: • Financial expenditure under each of the civil works contracts; • Financial management including projected sources and application of funds for

the three month period following the reporting period so to allow for timely replenishment of the Special Account.

ii. Project Progress Reports (PPRs) . Monthly PPRs and submitted to IBRD by PMU. The

PPRs will monitor and report progress, identify delays and provide plans to overcome them, on a number of aspects to be agreed, including: • Progress with procurement and pre-contract preparation; • Physical progress in project implementation for each civil works contract; • Details of any delays in the processing of invoices (see Annex 8); • Overall progress against the planned implementation schedule.

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

iv. Technical and Final Reports of Consultants. Copies of all technical and Final Reports

produced by Consultants will be submitted to IBRD by the PMU. v. Annual Progress Report on the Project. An Annual Progress Report summarising all

aspects of project implementation over the preceding 12 months, and detailing project implementation plans for the coming year, is to be prepared by DGH/PMU and submitted to IBRD.

vi. Project Implementation Completion Report. Within six months of the closing date of

the Loan, the DGH/PMU shall submit to IBRD an Implementation Completion Report in a format to be agreed.


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3.2 Procurement Management

3.2.1 Procurement Management and Plan

The project will involve procurement of:

• Civil works, and • Consultant services.

MPW’s Semi E-Procurement system will be used for the procurement of all consultancy and civil works contracts. Prior to the commencement of procurement under WINRIP, MPW will ensure that enhancements to the Semi E-Procurement system are in place in accordance with the Anti-Corruption Action Plan (ACAP) (Annex 11). DGH will use an integrity pact for all WINRIP procurement exercises (See ACAP, Annex 11). An Annual Procurement Plan, to be approved by IBRD, shall specify details of all packages. Any deviation from this Procurement Plan will require the written agreement of IBRD. Further details regarding procurement are provided in Annex 6 and 7. 3.2.2 Procurement Procedures

For the procurement of Civil Works, will use Pre-Qualification Bidding for 16 ICB packages and Post-Qualification for 5 NCB packages all will be Prior Review. Based on criteria to be agreed between IBRD and DGH before procurement commences. World Bank procurement procedures shall be followed for WINRIP. General and additional requirements are outlined in Annex 6, Annex 7 and Annex 11.

i) General Requirement The general procurement requirements are:

• The Loan Agreement • The World Bank published “Guidelines for Procurement under IBRD Loans and

IDA Credits, edition May 2004 revised May 2010” (the Guidelines) - for works and goods.

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

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

• The Project Management Manual (PMM) for WINRIP • Requirements under the Anti-Corruption Action Plan

ii) Additional Requirements for Procurement of ICB and NCB

1). Bank Prior Review, Approval and “No Objection” The World Bank will undertake Prior Review of all procurements (Table 3.1), to support issuance of No Objection Letters (NOLs) at each stage of the procurement process. The stages for Prior Review and/or issuance of NOLs for Civil Works, Goods and Consultancy Services procurement are detailed in Annex 6 Procurement of works, goods and services must be carried out within the procedures set out in the Anti-Corruption Action Plan (see Para 3.2.4 below). The documents which must be submitted to the Bank, in the case of prior review, before a NOL is issued, at each stage of civil works procurement


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Table 3.1: Procurement Thresholds

Prior Review Thresholds

(US$) Procurement Method Thresholds (US$)

ICB NCB Shopping QCBS QBS CQS Least Cost

SSS

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

Million <10 million

N/A

Consulting 100,000 for firm SSS: All

default TBD <200,000 TBD TBD

2). Advertising (ICB)

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

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

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

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

3). Preferences (ICB )

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

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

4). Standard Bidding Documents

Standard Bidding Document have been agreed and will apply to all 21 Works Contracts. Bidding documents for civil works will be the MDB/FIDIC Harmonised Standard Bidding Documents (SBD), edition May 2004 revised May 2010. The “ruling language” and the “language for communications” as defined in the SBD will be English. Materials in Indonesian explaining the SBD are being prepared, to support training, and will be marked as “not valid as Bidding or Contract Documents”.


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

5). Electronic Procurement (e-Procurement)

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

6). Registration (ICB )

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

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

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

7). Joint Ventures (ICB)

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

8). Bid Security (ICB)

Bid security shall be in the form of a bank guarantee from a reputable bank. It shall be in an amount equivalent to at least 2% (Two percent) of the Total Bid Price, including Value Added Tax.

9). Bid Opening and Bid Evaluation (ICB)

i. Bids shall be opened in public, immediately after the deadline for submission of bids and in the presence of the Bidders Representatives.

ii. When the number of responsive bids is less than three, re-bidding shall not be carried out. All bids shall not be rejected and new bids solicited without the prior approval of the Bank

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

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


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

10). Award of Contract (ICB)

i. In the case that the bidder, who has offered the lowest evaluated bid prices for several contracts, the evaluation shall include an assessment of the bidders capacity to meet the aggregated requirements regarding: • Financial situation (including cash flow);

• Experience;

• Current contract commitments;

• Equipment to be allocated; and

• Personnel to be fielded.

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

11). Pre Qualification and Post Qualification Whether Pre-Qualification or Post-Qualification have been set as in Procurement Plan (annex 6). For post qualification bids, successful contractors will have to satisfy established qualification requirements. The criteria to be met shall be set out in the bid document and if the successful bidder does not meet them his bid will be rejected. In such an event, DGH will make a similar determination for the next lowest evaluated bidder.

3.2.3 Procurement Agencies

i. Civil Works

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

ii. Consultant Services

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

3.3 Financial Management Plan

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


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reporting systems used by Government and IBRD. The plan is described in more detail in Annex 8. 3.3.1 Existing systems

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

ii. IBRD

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

3.3.2 Budgeting and Funds availability

GOI budgets include all costs disbursed by government, including those funded from foreign Loans and Grants. In order to keep a tight rein on expenditure, budgeting is carried out on a strictly annual basis, with no provision made for multi-year funding allocations even for long terms projects. The PMM will detail that the PMU will prepare and submit Work Plans and applications for budget allocations in accordance with the budget preparation timetable so that the allocations made in the final budget (DIPA) should reflect the true funding needs of the project. The PMM will also provide for project management to prepare for IBRD forecasts of loan drawdown as or when required.

3.3.3 Disbursement of loan funds

i. Disbursement Plan

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

ii. Channels

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

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


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iii. Certification and Payment Procedures

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

3.3.4 Reporting

i. Monthly

A comprehensive monthly report is required. The content is described briefly in Section 3.1 and will be detailed in the PMM.

ii. Quarterly

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

iii. Periodic Forecasts

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

3.3.5 Audit

WINRIP will be subject to financial audit by an independent auditing firm, procured by IBRD with grant funds (see ACAP, Annex 11). Terms of Reference will be determined by IBRD in consultation with MPW and BPK. In addition, all contracts are liable to audit by the agencies whose task is to audit at random disbursements from government budgets including those funded from Loans or Grants. These agencies include both external and internal audit:

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

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

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


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3.4. Contract Management

3.4.1. Civil works

i. Work Programmes 1 (WP-1) There are 21 Works packages to be implemented, comprising WP-1: 4 packages, WP-2: 9 packages, and WP-3: 8 packages. All these 21 packages were well defined during the preparation of the Project, however, there may still be changes based on agreement between the Government of Indonesia (GOI) and World Bank. For all 4 packages of WP-1, full project preparation has already been undertaken as part of the preparation of WINRIP, including economic evaluation, environmental review, and the preparation of detailed engineering design (DED) and bidding documents. These DED’s and bidding documents have also been reviewed by consultants, and recently updated by GOI in requesting the Bank approval for tender. The tendering process for WP-1 had begun by late December 2011 by collecting PQ Documents. The contract award planned for 4th quarter 2012.

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

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

3.4.3. Quality Assurance

Under WINRIP, the Team Leader of the Design and Supervision Consultant team will be responsible for quality assurance for all works (Annex 2). Chief Supervision Engineers (CSE) will be responsible for a number of civil works contracts, with authority delegated in writing by the Engineer. They will direct and supervise the Field Supervision Team (FST) for each contract. The Team Leader of the DSC will prepare and implement a Quality Assurance Plan that will identify measures to ensure the consistent achievement of proper standards of supervision across all contracts and FSTs. This Plan will be implemented in the field by the CSEs, under the supervision of the Team Leader according to procedures that will be specified in the QA Plan. The CTC will provide additional monitoring and reporting of the implementation and effectiveness of the QA Plan (see Annex 2).


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3.4.4. Technical Audit

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

3.5. Training and Workshops

For reasons of efficiency training might be conducted largely in regional centres. Annex 9 provides further details of the proposed Training Program, summarised in the following Table 3.2. These activities are apart from the mentoring and training to be provided by the DSC consultants under their TOR, for their own staff and for contractors’ staff. Table 3.2 : Summary of Training Program

Topic Purpose Procurement training (including provisions of ACAP)

Special training in procurement for members of Procurement Committees

Detailed provisions of ACAP Training in Project Management Required civil service training Refresher Training in Project Management

Feedback to project management staff from wider experience

Application of PMM (including other provisions of ACAP)

Familiarization with Project Management requirements Awareness of particular requirements of ACAP

Financial Management Reporting Training (follows on from PMM Training)

Procedures for monthly data collection, consolidation and reporting, for Procurement, Disbursements, Physical Progress

Environmental Management Workshops Review of results of ESCs (Environmental Special Clauses) Training for Treasurers (Brevet A course) Basic civil service training for financial officers

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

3.5.1 Procurement Training

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

3.5.2 Training in Project Management

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


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Typically, class sizes are limited to 30 people, and the course will last one month. It is possible that two classes will be required for staff in readiness for WP 1, and a single class will be needed for subsequent years.

3.5.3 Refresher Training in Project Management

It is proposed to give staff currently occupying key positions in Work Units a brief updating in latest developments in project management. Case studies of recent project failures and successes will be presented, with lessons learned. The course will last 3 days.

3.5.4. Application of the Project Management Manual

The PMU will conduct a significant program of dissemination of the provisions of the Project Management Manual (PMM) as soon as all lending provisions have been finalised (at the time of Loan Effectiveness). This training program will be complete before project implementation commences, and will be followed by refresher training each year. Regional Workshops lasting for two days will be held in provinces where WINRIP activities are commencing in the same year. Refresher courses, held annually each year after, will be of one day duration.

3.5.5. Training for Financial Management Reporting

To ensure proper and regular reporting of financial and physical progress of projects under implementation, and the timely receipt of detailed and accurate data, training will be needed in Financial Management Reporting. The Workshops will be held after the PMM Workshops and will take two days, or one day if a refresher course. Workshops will be provided for the staff of the agencies and firms involved in the receipt, collation and reporting of project information, particularly that concern: i. Procurement ii. Disbursements iii. Project progress.

3.5.6. Environmental Management Workshops

Environmental Management Workshops will be held at appropriate intervals during the project to give involved staff and contractors an understanding of proper environmental management procedures to be used during project implementation. Staff of each Field Supervision Team and of each Contractor will be required to attend these workshops 3.5.7. Training for Treasurers (Brevet A)

This training in treasury and financial management will be provided to staff occupying key financial positions in work units (Balai and SatKer).

3.6. Timebound Implementation Schedule

The time-critical activities that have the potential to delay effective commencement of the project are not so much the tasks of implementation, but the preparation tasks preceding implementation. It is extremely important that a strong foundation for the project be established, by ensuring that the essential preparation tasks are carefully considered and properly executed. The Implementation Schedule provided in Annex 12 identifies the critical preparation tasks needed to be completed before implementation of WP 1 begins. These include the critical tasks of:


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i. Ensuring that all procedural arrangements are put in place as early as possible (project managers appointed; procurement committees established and staff appointed; budgets established; etc.)

ii. Training provided to Project Managers and Procurement Committee staff iii. Prepare the Project Management Manual, and conduct full socialisation and project

management training iv. Preparations for the procurement of TA services for Implementation Support (CTC and

DSC) The Implementation Schedule identifies these initial tasks, and the critical activities and their overall timeframe required for effective implementation of the project.

3.7. Information Disclosure and Complaints Handling

The PMU, assisted by the CTC, is responsible for establishing a project website before the procurement of civil works contracts can commence. All information on the website will be provided, as far as is practical, in both English and Indonesian. Project information to be disclosed on the website (and updated monthly) is detailed in Annex 11. The Project Manager for each civil works contract is responsible for making project information available to communities in the project area before commencement of civil works and during implementation. Additionally, the monthly project progress reports will be made available, upon request, to civil society and media. Regulation of the Minister for Public Works No.323/PRT/M/2005 “Concerning a Mechanism for Handling the Information from the Public relating to Public Works” will be implemented for WINRIP with the additional enhancements as noted in Annex 11.


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4. RISK MANAGEMENT

4.4. Risk Management Matrix

Implementation of the Project will require the management of a number of risks, in the:

i. Stakeholder risks ii. Implementing Agency risks iii. Project risk especially in design, social and environmental, program and Donor, as well

a delivery quality

These risks have been identified, the likelihood and consequences assessed, and the subsequent Risk Level evaluated. These are detailed in Annex 10. The mitigation actions for each risk are also shown in the Matrix. The Anti Corruption Action Plan also addresses many of the risks, as follows

4.5. Anti Corruption Action Plan

4.5.4. Purpose

The anti-corruption action plan (ACAP) for WINRIP has been developed to ensure that the project’s goal of road improvement is not compromised by corruption which in turn reduces the quality and quantity of civil works. The ACAP will be adopted by GOI as a legally binding commitment, ensuring that anti-corruption measures are an integral part of the implementation of WINRIP and not standalone or optional requirements. Transparency and accountability have been highlighted as core principles of the IBRD loan by both the Indonesian and the World Bank. Both are eager to ensure that the funds are administered in a transparent and accountable manner on this project. The ACAP adapts the principles of transparency and accountability to the particular circumstances of WINRIP and provides guidelines for their implementation. The measures in the ACAP are aimed at preventing and detecting corruption in all its forms, whether it involves a party working on the implementation and oversight of the project or a third party hoping to improperly obtain a benefit from the project. It also aims to involve all stakeholders in ensuring the project is properly implemented - Government, consultants, contractors, beneficiaries, civil society, the media and the general public. A risk analysis of the WINRIP project, based on similar previous projects in the sector, has shown that the key areas of weakness to be addressed in the ACAP are inadequate oversight of civil works; and collusion / corruption in procurement processes. 4.5.5. Key Features

The key features of the WINRIP ACAP are:

a) Improved effectiveness of the Procurement Procedures within Ministry of Public Works b) Enhancement of the MPW IT based National Road Project Monitoring System. c) Enhanced Disclosure Provisions and Transparency d) Civil Society Participation in Oversight e) Complaints Handling Mechanism f) Sanctions and Remedies


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These features are elaborated in Annex 11. 4.5.6. Responsibility for implementation

The PMU will be responsible for ensuring the ACAP is properly implemented and for revising the Project Management Manual on an annual basis to incorporate necessary improvements to processes and procedure


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5. Monitoring and Evaluation

The Project Development Objective (PDO) is to increase the effective use of selected sections of national roads along the western Sumatera corridor by reducing road user cost.

The key performance indicators for the above development objective are i. Average passengers travel time – reduced by at least 20% on project roads ii. Average vehicle operating cost for a typical car, bus and heavy truck – reduced

by at least 5%, 8%, and 10% respectively, on project roads iii. Increase of AADT as per traffic forecast In supporting to above keys, the monitoring and evaluation to WINRIP program are also addressed for intermediate results by component: i. Component One (Betterment and Capacity Expansion of National Roads) - number of kilometres of improved national roads in the project region - number of meters of improved bridges ii. Component Two (Implementation Support) - satisfactory completion of technical audit for all road projects of component 1 - satisfactory completion of road safety audit for all road projects of component

1 iii. Component Three (Road Sector Institutional Development)

- % of Environment unit staff trained and capacitated to mitigate disaster risk related to road network


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RESULTS FRAMEWORK AND MONITORING INDONESIA: WESTERN INDONESIA NATIONAL ROADS IMPROVEMENT PROJECT

Project Development Objective: The development objective is to increase the effective use of selected sections of national roads along the Western Sumatra Corridor by reducing road user costs. PDO Level Results Indicators*

Cor

e Unit of Measure

Baseline (2010)

Cumulative Target Values** Frequency Data Source/ Methodology

Responsibility for Data Collection YR 1 YR 2 YR3 YR 4 YR5

Indicator One: Average passenger travel times reduced by at least 20% on project roads. (i) For light vehicles with base year Speed of 51 km/h (ii) 46 km/h for large buses (iii) 40 km/h heavy trucks

Km/h

0 % --- --- 5 % --- 20 % Mid-term and ICR

Travel speed survey

PMU/CTC

Indicator Two: Average vehicle operating cost for a typical car, bus and heavy truck reduced by at least 5%, 8%, and 10% respectively, on project roads (i) For light vehicles with base year Vehicle Operating Cost of $US0.19 per veh-km (ii) $US0.35 veh-km for large buses (iii) $US0.65 veh-km for heavy trucks

$US/km

0 % 0% 0%

--- --- 3 % 5% 7%

--- 5 % 8% 10%

Mid-term and ICR

Road condition and travel speed surveys. And use of HDM-IV VOC estimation Model

PMU/CTC


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Indicator Three: Increase of AADT on project road sections as per forecast

AADT PAD-Annex 7 AADT Increases as per forecast

ICR Traffic surveys

PMU/CTC

PDO Level Results Indicators*

Cor

e Unit of Measure

Baseline (2010)

Cumulative Target Values** Frequency Data Source/ Methodology

Responsibility for Data Collection

INTERMEDIATE RESULTS

Intermediate Result (Component One): : Betterment and Capacity Expansion of National Roads

Intermediate Result indicator One: Number of kilometers of improved national roads in the project region as planned.

km

0 km 50 km

100 km

300 km

500 km

715 km

Semi-Annually

Reports from PMU

PMU/CTC

Intermediate Result indicator Two: Number of meters of improved bridges

meter

0 m 0 m 100 m

130 m

160 m

194 m Semi-Annually

Reports from PMU

PMU/CTC

:

Intermediate Result (Component Two): Implementation Support

Intermediate Result indicator One: Satisfactory completion of technical audits for all road projects of component 1

0 %

20 %

40 %

60 %

80 %

100 %

Semi-Annually

Reports from PMU

PMU/CTC

Intermediate Result indicator Two: Satisfactory completion of road safety audits for all road projects of component 1

0 %

20 %

40 %

60 %

80 %

100 %

Semi-Annually

Reports from PMU

PMU/CTC


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Intermediate Result (Component Three): Road Sector Institutional Development Intermediate Result indicator One: % of Environment unit staff trained and capacitated to mitigate disaster risk related to road network

0%

20 %

40 %

50%

75%

100%

Semi-Annually

Reports from PMU and Bank Supervision

PMU/CTC

* Target values should be entered for the years data will be available, not necessarily annually (see http://coreindicators for more details) ** Use cumulative target values only if relevant.

http://coreindicators/


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PROJECT IMPLEMENTATION PLAN (PIP) FOR WINRIP:

TABLE OF CONTENTS

1. THE PROJECT 2

1.1 Background ........................................................................................................... 2

1.2 Project objectives .................................................................................................. 2

1.3 Project content and timing .................................................................................... 2

1.4 Project preparation ............................................................................................... 3 1.4.1 Approach to project planning and identification .................................................. 3 1.4.2 Selection of Sub-projects ....................................................................................... 4

1.5 Project Description ................................................................................................ 5 1.5.1 Project Component 1: Civil Works ......................................................................... 5 1.5.2 Project Component 2: Implementation Support ................................................. 12 1.5.3 Project Component 3: Road Sector Institutional Development .......................... 11 1.5.4 Project Component 4: Contingency for Disaster Risk Response ......................... 11

1.6 Project Cost......................................................................................................... 14

1.7 Project Rationale and Benefits ............................................................................. 15 1.7.1 Lessons Learned from Previous Projects ............................................................. 15 1.7.2 Benefits and Target Population ........................................................................... 16 1.7.3 Project Economic Evaluation ............................................................................... 16

1.8 Environmental and Social Safeguards................................................................... 17 1.8.1 Environmental Safeguards ................................................................................... 17 1.8.2 Joint Application of GoI and World Bank Environment Safeguards .................... 17 1.8.3 Social Safeguards ................................................................................................. 18 1.8.4 Environmental and Social Safeguards Due Diligence .......................................... 18 1.8.5 Health and Safety................................................................................................. 17

2. INSTITUTIONAL 20

2.1 Organisations Responsible for Project Implementation ........................................ 20

2.2 Appointment and Delegation of Authority of the Engineer ................................... 22

2.3 Project management and staffing ...................................................................... 225 2.3.1 Project Management Unit (PMU-WINRIP) ........................................................ 225 2.3.2 Project Management Manual ............................................................................ 225

2.4 Roles of other institutions ................................................................................. 226


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2.5 Coordinating mechanisms ................................................................................. 226

3. PROJECT ADMINISTRATION 226

3.1 Monitoring and reporting arrangements ............................................................ 226

3.2 Procurement management ................................................................................ 228 3.2.1 Procurement management and plan ................................................................. 228 3.2.2 Procurement procedures ................................................................................... 228 3.2.3 Procurement Agencies ......................................... Error! Bookmark not defined.31

3.3 Financial Management Plan ............................................................................... 231 3.3.1 Existing systems ................................................................................................... 32 3.3.2 Budgeting and Funds availability ......................................................................... 32 3.3.3 Disbursement of loan funds ................................................................................ 32 3.3.4 Reporting ............................................................................................................. 33 3.3.5 Audit .................................................................................................................... 33

3.4 Contract Management ............................................ Error! Bookmark not defined.34 3.4.1 Civil Works ........................................................................................................... 34 3.4.2 Consultant Services .............................................................................................. 34 3.4.3 Quality Assurance ................................................... Error! Bookmark not defined. 3.4.4 Technical Audit .................................................................................................... 35

3.5 Training and Workshops ...................................................................................... 35 3.5.1 Procurement training .......................................................................................... 35 3.5.2 Training in Project Management ......................................................................... 35 3.5.3 Refresher Training in Project Management ........................................................ 35 3.5.4 Application of the Project Management Manual ................................................ 36 3.5.5 Training for Financial Management Reporting .................................................... 36 3.5.6 Environmental Management Workshops ............................................................ 36 3.5.7 Training for Treasurers (Brevet A) ....................................................................... 36

3.6 Timebound implementation schedule .................................................................. 36

3.7 Information Disclosure and Complaints Handling ................................................. 37

4. RISK MANAGEMENT 38

4.1 Risk management matrix ..................................................................................... 38

4.2 Anti Corruption Action Plan ................................................................................. 38 4.2.1 Purpose ................................................................................................................ 38 4.2.2 Key features ......................................................................................................... 38 4.2.3 Responsibility for implementation ...................................................................... 39

5. MONITORING AND EVALUATION ERROR! BOOKMARK NOT DEFINED.40


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ANNEXES Annex 1: Proposed Civil Works Programs AWP 2 and AWP 3 Annex 2: Terms of References (TOR) of Consultant Services Annex 3: Initial Economic Evaluation of Civil Works Component of WINRIP Annex 4: WINRIP Environmental and Social Safeguards Annex 5: The Project Management Unit Annex 6: Procurement Arrangements Annex 7: Presidential Regulation No.54 Year 2010; “The Procurement Goods and

Services” Annex 8: Financial Management Plan Annex 9: Training Component Annex 10: Risk Management Annex 11: Anti-Corruption Action Plan Annex 12: Project Implementation Schedule Annex 13: Priority Issues for GOI in Development and Implementation of WINRIP Annex 14: Readiness Criteria


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LIST of ABBREVIATIONS Governments GOA Government of Australia GOI Government of Indonesia Donors ADB Asian Development Bank AIP, AIPRD Australia–Indonesia Partnership for Reconstruction and Development AusAID Australian Agency for International Development which administers AIP, AIPRD IBRD, WB International Bank for Reconstruction and Development – World Bank Projects EINRIP Eastern Indonesia National Roads Improvement Project EIRTP1 Eastern Indonesia Region Transport Project 1 – IBRD Loan 4643-IND signed 22 Jan 2002 EIRTP2 Eastern Indonesia Region Transport Project 2 – IBRD Loan 4744-IND signed 23 July 2004 SRIP Strategic Roads Infrastructure Project WINRIP Western Indonesia National Road Improvement Project Agencies Balai Balai Pelaksanaan Jalan Nasional – DGH Regional Implementation Agencies Bappenas Badan Perencanaan Pembangunan Nasional – National Development Planning Board BPK Badan Pemeriksa Keuangan - Supreme Audit Agency BPKP Badan Pemeriksa Keuangan Pembangunan –Development Finance Audit Agency BI Bank Indonesia Bina Marga Directorate General of Highways within the Ministry of Public Works DGH Directorate General of Highways within the Ministry of Public Works Dit Bipram Directorate of Planning (DOP) within DGH Dit Bintek Directorate of Technical Affairs (DTA) within DGH

Dit Binlak FIDIC

Directorate of Implementing Affairs (DIA) with DGH for related Region

Fédération Internationale des Ingénieurs Conseils – International Federation of Engineering Consultants

KPPN Kantor Pelayanan Perbendaharaan Negara– Ministry of Finance Treasury Office in a Province or District

MOF Ministry of Finance MPW Ministry of Public Works

P2JN Perencanaan dan Pengawasan Jalan dan Jembatan National – National Road and Bridge Design and Supervision Unit

PMU Project Management Unit PPU Project Preparation Unit SatKer Satuan Kerja – Work Unit that is responsible for a budget Provinces BaBel Bangka Belitung – Bangka Belitung Beng Bengkulu - Bengkulu

Jambi Jambi – Jambi KepRi Kepulauan Riau – Riau Islands Lamp Lampung - Lampung Riau Riau – Riau SumBar Sumatra Barat – West Sumatra SumSel Sumatra Selatan – South Sumatra SumUt Sumatra Utara - North Sumatra Consultants CTC Core Team Consultant – consultant supporting PMU DSC Design and Supervision Consultant FAC Financial Audit Consultant PAS Procurement Advisory Services PPC Project Preparation Consultant


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LIST of ABBREVIATIONS PMSC Project Management Support Consultant RSC Regional Supervision Consultant RDSC Regional Design and Supervision Consultant under EIRTP2 TAC Technical Audit Consultant Documents ACAP Anti-Corruption Action Plan AMDAL Analisa Mengenai Dampak Lingkungan - Environmental Impact Assessment APBN Anggaran Pendapatan dan Belanja Nasional - National Revenue and Expenditure Budget DIPA Daftar Isian Pelaksanaan Anggaran - detailed Budget Document prepared annually EMP Environmental Management Plan EMiP Environmental Mitigation Plan EMoP Environmental Monitoring Plan FMR Financial Monitoring Report – quarterly expenditure report and cash forecast for six months LARAP Land Acquisition and Resettlement Action Plan SLARAP Simplified LARAP PIP Project Implementation Plan PMM Project Management Manual SBD Standard Bidding Documents Systems IIRMS Indonesian Integrated Road Management System IRMS Interurban Road Management System IBMS Integrated Bridge Management System Other Terms AWP/WP (Annual) Works Program e.g. AWP/WP1 = first batch of works ANDAL Analisa Dampak Lingkungan Hidup - Environmental Impact Analysis N8K, Nat8K The 8000 km of New National Road added under KepMen PU 369/2005 KepMen 369 Public Works decree No. 369/2005 (Jaringan Jalan Nasional) – list of National Roads EIRR Economic Internal Rate of Return (%) ESC Environmental Special Clauses (previously SOP – Standard Operating Procedures) ICB, NCB International Competitive Bidding, National Competitive Bidding IRI International Roughness Index – a measure of roughness of pavement surface. MC Monthly Certificate – known as Interim Payment Certificate in the SBD NPV Net Present Value (usually calculated at 15% discount rate) QCBS Quality and Cost Based Selection PHO, FHO Provisional Handover, Final Handover of works under a contract PPK Pejabat Pembuat Komitmen - Commitment Officer in Satker, also known as Project Manager

POKJA RFP

Working Group Procurement Committee Request for Proposals

ROW Right of Way (Ruang Milik Jalan) SEC; SpEC Standard Environmental Clauses; Special Environmental Clauses SOE Statement of Expenditures SOP Standard Operating Procedures SP2D Surat Permohonan Pencairan Dana – Payment Order

SPP, SPM SPPL

Surat Perintah Membayar - Payment Request Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan

TOR Terms of Reference UKL Upaya Pengelolaan Lingkungan – site-specific Environmental Mitigation Plan (same as EMiP) UPL Upaya Pemantauan Lingkungan – site-specific Environmental Monitoring Plan (same as EMoP) VOC Vehicle Operating Costs VOT Value of Time Costs WA Withdrawal Application

PIP Appendix A Page A.1.1

ANNEX 1

PROPOSED CIVIL WORKS PROGRAMS FOR

WP 1, WP 2 and WP 3

PIP Appendix A Page A.1.2

Table 1.1 : Summary of WINRIP Subprojects

No. Subproject Link No. and Name Length (km)

Cost (Rp mill)

Cost / km (Rp mill)

Width (m)

Implementation

Start Duration (months)

WP 1

1. Lampung : Link No. 053.0, Krui – Biha 25.0 148,668.00 5,946.72 7.0 August

2012 24

2. West Sumatra : Link No. 047.2, Padang Sawah - Simpang Empat 40.9 189,810.11 4,640.83 7.0 August

2012

24

2a. Included in the above Subproject on Link No. 047.3 is Air Gadang Bridge 100 m 17,580.20 Rp 175.8

mill / m 6.0 August 2012 24

3. West Sumatra : Link No. 047.1, Manggopoh - Padang Sawah 32.0 152,434.90 4,763.59 7.0 August

2012 24

4. Bengkulu : Link No. 015.1, Ipuh – Bantal 42.4 226,275.10 5,772.32 7.0 August

2012 24

WP 2 5. Sumut : Link No. 015.xx,

Sp. Rampa – Poriaha 11.1 55,126.6 4,966.31 6.0 May 2013 18

6. Bengkulu : Link No. 010.0, Ps. Pedati – Kerkap 25.0 72,018.8 2,880.72 7.0 May

2013 18

7. Sumbar : Link No. 019.0, Indrapura – Tapan 19.5 96,921.0 4,970.31 7.0 Oct.

2013 21

8. Sumbar : Link No. 024.0, Bts. Pariaman – Manggopoh 46.8 183,268.8 3,915.98 7.0 Oct.

2013 24

9. Lampung : Link No. 026.1, Rantau Tijing - Kota Agung 42.0 149,831.5 3,567.40 7.0 Oct.

2013 21

10. Sumbar : Link No. 034.1, Sp. Empat - Sp. Air Balam 61.7 241,617.2 3,916.00 7.0 Oct.

2013 24

11. Bengkulu : Link No. 015.2, Bantal – Mukomuko 50.1 157,820.0 3,150.10 6.0 Dec.

2013 24

12. Sumbar : Link No. 017.2, Kambang – Indrapura 55.2 171,948.0 3,115.00 6.0 Dec.

2013 24

13. Bengkulu : Link No. 006.1, Simpang Rukis - Tanjung Kemuning 56.3 225,481.5 4,004.99 7.0 Dec.

2013 21

WP 3

14. Sumbar : Link No. 017.1, Painan – Kambang 31.5 118,993.0 3,777.56 7.0 March.

2014 21

15. Sumut : Link No. 016.0, Sibolga - Bts. TapSel

36.0 129,228.0 3,589.67 7.0 March 2014

21

16. Bengkulu : Link No. 009.4, Seblat – Ipuh, including Air Lalang and Air Guntung Bridges

34.5 0.052 110,237.0 3,198.28 6.0 March

2014 21

17. Lampung : Link No. 061.1, Sp. Gunung Kemala - Pugung Tampak

36.8 0 03

104,238.0 2,832.55 6.0 March 2014

21

18. Bengkulu : Link No. 015.3, Mukomuko - Bts. Sumbar 25.8 69,233.0 2,683.45 6.0 May

2014 18

19. Bengkulu : Link No. 009.1, Lais – Bintuan 11.6 37,558.0 3,237.76 7.0 May

2014 18

20.

Sumbar : Link No. 002.0, Lubuk Alung – Sicincin

14.6 54,557.0 3,736.78 7.0 May 2014

18

21. Sumbar : Link No. 027.0 Lubuk Alung - Kuraitaji

16.8 65,788.0 3,915.95

7.0 May 2014

18

PIP Annex 2 Page A.2.1

ANNEX 2

TERMS OF REFERENCE (TOR) OF CONSULTANT SERVICES

A.2.1 CORE TEAM CONSULTANT (CTC)

A.2.2 DESIGN AND SUPERVISION CONSULTANT (DSC)

PIP Annex 2 Page A.2.2

Annex 3 EconomicEvaluation 1 07/01/2009 14:42

ANNEX 3

ECONOMIC EVALUATION OF THE CIVIL WORKS COMPONENT OF WINRIP


ANNEX 3 : ECONOMIC EVALUATION OF THE CIVIL WORKS COMPONENTS

1. The main objective of WINRIP is to identify road sections that are viable for betterment, and bring them up to the required standards for national roads. Such improvements include widening of the carriageway and provision of shoulders, improvements to drainage, minor improvements to alignment, and two-layer asphaltic concrete (AC) resurfacing. It is not a rehabilitation project designed to restore roads to their previous condition after they have deteriorated, or to determine priorities for improvements to the road surface. 2. A detailed process of identification, prioritization and selection of sub-projects for inclusion in the project was undertaken in formulating the project content for WINRIP. In summary, this involved a hierarchical search process, with a number of discrete steps (i) a network screening study of national road betterment needs for the whole of Western Indonesia region, which was conducted mainly using the Integrated Indonesian Road Management System (IRMS) database; (ii) review of DGH and regional priorities for road improvement; (iii) identification of major road corridors; and (iv) post-design review of economic viability. The selected roads were then ranked according to their level of readiness (land acquisition, environment and social) to form the Work Programs of the first, second and third year. Table 1 presents the economic appraisal results of the project roads selected under the Work Program 1 (WP-1), WP-2 and WP-3.

3. Traffic: The derivation of base year traffic levels on the project road sections was made using the IRMS classified traffic count data from recent years and the results of moving observer traffic counts that were carried out on the total length of all road sections during the WINRIP Project. For the economic evaluation only normal traffic was included in the analysis. This is the traffic that would be expected to use the project roads if no improvement were made. Normal traffic flows are assumed to increase over time as a result of growth in population and economic activity, but not to increase as a result of the improvements resulting from the project. Generated traffic, which is additional traffic that occurs only as a result of the improvement to the road, was not included as the road user cost reductions are not considered large enough to generate traffic. Network effects were not considered and so diverted traffic, which changes from another route as a result of the improvement, was not taken into account. A standard set of traffic growth rates was used for all roads. The growth rates, as percent per year, were as follows:

Years 1 - 5 Years 6 - 25

Motorcycle 12 8

Car / Jeep 8 6

Buses 3 3

Trucks 6 5

4. General approach: The general approach used for the evaluation of each road section followed conventional economic appraisal methodology for road projects. That is, it compared the situation predicted to occur with the project improvements to the roads, referred to as the “project case”, and the situation expected to occur if the project is not implemented, referred to as the “base case”. Defining appropriate scenarios for the base case over the evaluation period is a key part of the analysis. An evaluation is based on the differences between the project case and the base case, not the


differences between the situation before and after the project is implemented. It is possible for the base case to be defined as a “do nothing” or a “do minimum” alternative, in which no maintenance or only routine maintenance works are assumed to be carried out on the project roads during the evaluation period. However, this assumption is not appropriate for roads that are designated as national roads and are carrying significant volumes of traffic. These roads receive both routine and periodic maintenance. Without periodic maintenance they would progressively deteriorate, and surface roughness levels would become unacceptably high. If this were assumed to happen then the evaluation of almost any project works on the road would appear to be viable. 5. Methodology: The economic evaluation was carried out using the Highway Development and Management tool HDM-4; version 2.05 was used. The major benefits from road improvements are estimated as the differences between VOC and travel time costs for passengers in the base case and the project case using the HDM-4 model. The main benefit resulting from the improvements is in the form of travel time savings, which is a direct result of the higher speeds that are achieved on the improved roads. Thus, the economic returns from road investment are determined, taking into account the level of the improvement and road maintenance costs, and savings in road user costs (VOC and time savings) due to the provision of a better road facility. Where the bridges are on or adjacent to a WINRIP road sub-project section they have been assessed as an integral component of the sub-project and the costs and benefits combined in the assessment. An economic appraisal methodology of the bridges was used in accordance to the circumstances at each bridge site. In most cases this is based on the benefit of removing delays that would occur at single-lane bridges. The evaluation period over which the sub-projects were assessed was 25 years, with 2010 as the base year because most of the road condition and traffic data relate to this year. The betterment works were assumed to be implemented during the period mid-2011 to mid-2014, giving a benefit period of 19 or 20 years depending on the implementation period. 6. Results and Sensitivity Analysis: The results of the economic analysis for road and bridge works are presented in Table A7.1. All subprojects are economically viable. Most are highly viable with an EIRR of over 30 percent in many cases. The overall NPV at 12% discount rate of WINRIP is over US$ 365 million and the overall EIRR is 29.9%. A sensitivity analysis was carried out with three scenarios: (i) a 20% increase in capital costs (ii) a 20% decrease in road user benefits; and (iii) the combined effect of both. The subprojects are shown to have a high level of robustness as most subprojects remain viable in all cases. However, three of the subprojects do fall just below 12% under scenario 3. The overall EIRR of WINRIP under scenario 3 is still over 21.7 percent.


Table A7.1: Evaluation Result Summary, 2010

No. Subproject Link No. and Name Length (km)

FinancialCost

(Rp mill)

Traffic (AADT) NPV (Rp mill at

12%)

EIRR (%) Total of which

motorcycles WP 1

1 Lampung : Link No. 053.0, Krui – Biha and Way Magnai Bridge

25.0 158,268.0 6,800 5,000 66,401.8 19.1

2 West Sumatra : Link No. 047.2, Padang Sawah - Simpang Empat and Air Gadang Bridge

40.9 207,390.3 10,550 7,350 466,380.6 38.2

3 West Sumatra : Link No. 047.1, Manggopoh - Padang Sawah

32.0 152,434.9 5,890 3,270 167,102.8 27.9

4 Bengkulu : Link No. 015.1, Ipuh – Bantal

42.4 226,275.1 3,000 1,500 19,406.6 13.7

WP 2 5 Sumbar : Link No. 024.0,

Bts. Pariaman – Manggopoh 46.8 183,268 8,900 4,650 655,780.7 55.8

6 Lampung : Link No. 026.1, Rantau Tijing - Kota Agung

42.0 149,831 18,350 10,500 149,810.7 31.1

7 Sumbar : Link No. 034.1, Sp. Empat - Sp. Air Balam

61.7 241,617 7,150 5,000 355,518.6 37.2

8 Bengkulu : Link No. 006.1, Simpang Rukis - Tanjung Kemuning

56.3 225,481 5,600 3,000 308,280.2 30.7

9 Bengkulu : Link No. 015.2, Bantal – Mukomuko

50.1 157,820 3,800 2,500 81,997.0 21.1

10 Sumbar : Link No. 017.2, Kambang – Indrapura

55.2 171,948 2,800 800 84,757.3 20.9

11 Sumbar : Link No. 019.0, Indrapura – Tapan

19.5 96,921 4,700 3,300 25,906.8 16.6

12 Sumut : Link No. 015, Sp. Rampa – Poriaha

11.1 55,126 1,400 500 16,078.9 18.0

WP 3 13 Sumbar : Link No. 017.1,

Painan – Kambang 31.5 118,993 8,600 6,250 229,912.3 39.0

14 Sumbar : Link No. 027.0, Lubuk Alung – Kurataji

16.8 65,788 17,400 11,000 196,960.0 58.8

15 Bengkulu : Link No. 009.1, Lais – Bintuan

11.6 37,558 12,000 4,000 48,644.7 42.6

16 Bengkulu : Link No. 010.0, Ps. Pedati – Kerkap

25.0 72,018 16,000 12,000 64,495.8 33.3

17 Bengkulu : Link No. 015.3, Mukomuko - Bts. Sumbar

25.8 69,233 3,980 2,500 45,944.1 26.8

18 Bengkulu : Link No. 009.4, Seblat – Ipuh and Air Gunung and Air Lalang Bridges

34.5 110,237 4,200 2,500 82,883.6 24.6

19 Sumbar : Link No. 002.0, Lubuk Alung – Sicincin

14.6 54,557 16,150 8,000 63,113.5 37.7

20 Sumut : Link No. 016.0, Sibolga - Bts. TapSel

36.0 129,228 4,780 2,000 132,286.1 29.3

21 Lampung : Link No. 061.1, Sp. Gunung Kemala - Pugung Tampak and Way Taau Bridge

36.8 104,238 2,520 1,000 23,498.0 16.9

Total Project 715.6 2,788,230 3,285,160.1 29.9

ANNEX 4 :

APPLYING ENVIRONMENTAL AND SOCIAL SAFEGUARDS

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Contents PART I - INTRODUCTION ............................................................................................ 3

1. BACKGROUND OF WINRIP PLANNING PROCESS ....................................... 3

1.1. BACKGROUND ............................................................................................................................... 3 1.2. WINRIP 1 ..................................................................................................................................... 3 1.3. WINRIP 2 ..................................................................................................................................... 3

2. OVERVIEW OF ENVIRONMENTAL AND SOCIAL SAFEGUARDS ............. 4

2.1. ENVIRONMENTAL SCREENING AND STUDIES ................................................................................. 5 2.2. STANDARD ENVIRONMENTAL CLAUSES ........................................................................................ 5 2.3. LAND ACQUISITION ....................................................................................................................... 5 2.4. MANAGEMENT OF THE APPLICATION OF SAFEGUARDS ................................................................. 5 2.5. MONITORING OF LARAP IMPLEMENTATION................................................................................. 6 2.6. ESTIMATION OF THE COST OF LAND ACQUISITION AND RESETTLEMENT ...................................... 6

PART II – WINRIP ENVIRONMENTAL & SOCIAL SAFEGUARDS (ESMF) ..... 9

1. APPLYING ENVIRONMENTAL AND SOCIAL SAFEGUARDS .................... 9

1.1. ENVIRONMENTAL SAFEGUARDS .................................................................................................... 9 1.2. APPLICATION OF ENVIRONMENTAL SAFEGUARDS ....................................................................... 11 1.3. SOCIAL SAFEGUARDS .................................................................................................................. 11 1.4. ROLES AND RESPONSIBILITIES FOR ENVIRONMENTAL AND SOCIAL SAFEGUARDS MANAGEMENT .......................................................................................................................................... 11

2. THE ENVIRONMENTAL AND SOCIAL ASSESSMENT PROCESS TO BE APPLIED ................................................................................................................... 12

2.1. PREPARING A UKL/UPL OR AMDAL ......................................................................................... 12 2.2. PREPARING A SPPL (SURAT PERNYATAAN KESANGGUPAN PENGELOLAAN DAN PEMANTAUAN LINGKUNGAN HIDUP) ........................................................................................................ 13 2.3. PREPARING THE ABBREVIATED LARAP AND LARAP ................................................................ 13 2.4. SOCIAL IMPACT MITIGATION AND MONITORING ......................................................................... 13 2.5. LANGUAGE OF ENVIRONMENTAL AND SOCIAL DOCUMENTATION .............................................. 14

PART III – LAND ACQUISITION AND RESETTLEMENT POLICY FRAMEWORK (LARF) ................................................................................................ 15

1. DEFINITIONS ........................................................................................................ 15

2. GENERAL PRINCIPLES ...................................................................................... 15

3. PREPARATION, APPROVAL AND IMPLEMENTATION OF LARAP ....... 16

4. SOCIO ECONOMIC SURVEY, INFORMATION AND CONSULTATION . 16

4.1 SOCIO-ECONOMIC SURVEY AND INVENTORY OF ASSETS LOST ................................................... 16 4.2 INFORMATION, AWARENESS, AND CONSULTATION ..................................................................... 17 4.3 INDEPENDENT ORGANIZATION .................................................................................................... 17 4.4 LAND ACQUISITION AND RESETTLEMENT ACTION PLAN (LARAP) ............................................ 17 4.5 TRACER STUDY ........................................................................................................................... 18

5. LAND ACQUISITION ........................................................................................... 18

5.1 COMPENSATION .......................................................................................................................... 18 5.2 RELOCATION ASSISTANCE .......................................................................................................... 19 5.3 REHABILITATION ASSISTANCE .................................................................................................... 19 5.4 COMPENSATION ALTERNATIVES ................................................................................................. 19 5.5 CATEGORIES OF PROJECT AFFECTED PERSONS ........................................................................... 19

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5.6 LAND DONATION ......................................................................................................................... 20 5.7 RESETTLEMENT SITE ................................................................................................................... 20

6. LIVELIHOOD RESTORATION ASSISTANCE ................................................ 21

6.1 TYPES OF ASSISTANCE ................................................................................................................ 21 6.2 ASSISTANCE SCHEDULE AND COST ............................................................................................. 21

7. INSTITUTIONS AND FUNDING ........................................................................ 22

7.1 LAND ACQUISITION COMMITTEE (LAC) ..................................................................................... 22 7.2 HEAD, MEMBERS, AND TASKS OF THE LAND ACQUISITION COMMITTEE .................................... 22 7.3 CONSULTATION AND ASSISTANCE BY INDEPENDENT INSTITUTION ............................................. 22 7.4 COORDINATION BETWEEN BAPPEDA AND LAC ........................................................................ 22 7.5 COORDINATION ........................................................................................................................... 22

8. MONITORING AND EVALUATION ................................................................. 23

8.1 INTERNAL MONITORING AND REPORTING .................................................................................... 23 8.2 EXTERNAL MONITORING AND EVALUATION ............................................................................... 23

9. GRIEVANCE MECHANISM ............................................................................... 23

10. TREATMENT OF INDIGENOUS VULNERABLE PEOPLE .......................... 23

10.1 INDIGENOUS PEOPLE AND ROAD DEVELOPMENT ........................................................................ 23 10.2 GOVERNMENT OF INDONESIA APPROACH.................................................................................... 24 10.3 SCREENING FOR INDIGENOUS PEOPLES ....................................................................................... 24 10.4 WORLD BANK GUIDELINES ......................................................................................................... 24 10.5 RECOMMENDED GUIDELINES AND APPROACH FOR TREATMENT OF INDIGENOUS PEOPLE .......... 24

11. ADDITIONAL COMMUNITY CONSULTATION REQUIREMENTS .......... 26

PART IV – ENVIRONMENTAL SPECIFICATIONS ............................................... 26

REQUIREMENT FOR ADDITIONAL PAY ITEMS IN THE BOQ .......................................................................... 27

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PART I - INTRODUCTION

1. BACKGROUND OF WINRIP PLANNING PROCESS

1.1. Background Originally, it was envisioned that WINRIP would cover Western Indonesia, including the Islands of Java and Sumatra. However, at a very early stage in the Project’s development, it was decided that the Project should only cover Sumatra, excluding the province of Aceh. Subject to confirmation, the basic reason was that Java, and Aceh, were both covered by many other projects. The original WINRIP was funded by the World Bank, and implementation will use a World Bank Loan. WINRIP 2 is funded by Grant TF 094760-ID, from the Indonesia Infrastructure Trust Fund.

1.2. WINRIP 1 The original WINRIP covered Pre-feasibility, Feasibility and the Detailed Engineering Design (DED) of a selected number of Sub-projects. The Pre-feasibility Studies covered some 3,800 km. of National Roads, throughout Sumatra, excluding Aceh. The study was, nominally, a desk-top study, and relied heavily on IRMS and BMS data. Using criteria such as status, function, AADT, width, v/c ratios, IRI, EIRR, NPV, Cost and current proposals, the long list of Sub-projects was then reduced to some 2,500 km. of National Roads, from which a 3-year National Roads improvement program could be developed. The Feasibility Studies covered all of the normal topics, and included topographic, traffic, road and bridge condition, economic development, environment and social impact surveys. The basic aim of the studies being to identify Sub-projects that was necessary and technically, economically, environmentally and socially feasible. Criteria used to prioritize Sub-projects included impact, likely economic viability, road pavement roughness, traffic volumes, pavement width deficiency, development impact and readiness for the implementation of the works. The output from the Feasibility Studies was a number of Alternative Scenarios for the improvement of National Roads in Sumatra, excluding Aceh. The proposals varied from those concentrating on the East Coast, Central and West Coast Corridors, and Feeder Links to those Corridors. Detailed Engineering Designs (DED) was completed for many of the identified links. Ultimately, the DGH decided that preference should be given to the West Coast Corridor; one of the reasons being the relatively recent earthquakes in West Sumatra. Based on this decision, and the knowledge that the proposed World Bank Loan was for some US $ 300 million, a three-year program (WP 1, WP 2 and WP 3) for the improvement of National Roads in Sumatra, excluding Aceh was developed. Annex ‘A’ to this Paper includes the selected Sub-projects.

1.3. WINRIP 2 The agreed final list of Sub-projects includes for Subprojects in the provinces of Lampung, Bengkulu, West Sumatra and North Sumatra. In total, the length of the Sub-projects covers some 712 km. Some of the currently proposed Sub-projects were covered partially in WINRIP 1 but most of them had only been designed by the Provincial P2JN, to standards appropriate for APBN funding. Hence, the basic need of WINRIP 2 was to complete the Detailed Engineering Design (DED) of the Sub-projects included in AWP 1, so that they could be ready for implementation in 2011, when it is expected the World Bank Loan will become available. As

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requested, these roads have been designed to Eastern Indonesia National Roads Improvement Program (EINRIP) standards. The WP 1 Sub-projects include:

1) Lampung Link No. 053.0, Krui - Biha (25.0 km);

2) West Sumatra Link No. 047.2, Padang Sawah - Simpang Empat, including Air Gadang Bridge (40.9 km.);

3) West Sumatra Link 047.1, Manggopoh - Padang Sawah (32.0 km);

4) Lampung Link No. 061.1, Sp. Gunung Kemala - Pg. Tampak, including Way Taau Bridge (36.8 km.); and

5) Bengkulu Link No. 015.1, Ipuh - Bantal (39.2 km.).

In addition to preparation of the DED proposals, the WINRIP PPC Consultants have completed other tasks, including:

• Revised Economic Evaluations of the WP 1 Sub-projects, based on the new quantities and cost estimates; and for WP 2 and WP 3 Subprojects, based on updated cost estimates;

• Enhanced Environmental, Land Acquisition and Vehicle Accident Mitigation Studies for the WP 1 Subprojects;

• Preparation of TORs for a number of topics, including the Core Team Consultants (CTC) and the Design and Supervision Consultants (DSC); and

• Preparation / Updating of the Project Management Manual (PMM) and the Project Implementation Manual (PIP).

Details of the specific environmental and land acquisition screening carried out during WINRIP 1 and WINRIP 2 are included in Annex 6.

2. OVERVIEW OF ENVIRONMENTAL AND SOCIAL SAFEGUARDS The Environmental and Social Safeguards under WINRIP are based on the Environment Impact Assessment System (AMDAL) mandated by laws and regulations of the Government of Indonesia.

Environmental and Social Safeguards under WINRIP are very similar to environmental and social management plans under ongoing World Bank-funded Projects1.

The key features of the ESMF which is included in Part II of this document are summarized below, and the differences from safeguards under the ongoing World Bank Projects are also noted.

The ESMF requires this guideline to provide detailed information on four aspects, as follows:

a. The formats for reports on SPPL, UKL/UPL and AMDAL studies, which are included in Annex 1. (For details see Part II of this document)

b. The description of the preparation of UKL/UPL and AMDAL documentation, is included in Annex 2.

1 Environmental Management Plan (EMP) for EIRTP-2 dated May 2004; Environmental and Social Assessment Management Plan (ESAMP) for SRIP, summarized in Project

Appraisal Document, 2 June 2006

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c. The report formats to be used for comprehensive Land Acquisition and Resettlement Action Plan (LARAP) and abbreviated LARAP, are included in Annex 3. Procedures for conducting LARAP and abbreviated LARAP are described in Sections 4 to 8 of the ESMF.

In addition the procedures to be followed for Environmental Impact Monitoring and Management during the construction phase are included in Annex 4 & 5.

2.1. Environmental Screening and Studies The Environmental Screening flow chart (Figure 1) identifies the triggers for a full environmental impact assessment (AMDAL) or an environmental mitigation and monitoring plan (UKL/UPL), based on Regulations of the Minister of Environment in 2006 [5] and the Minister of Housing and Regional Settlements in 2003 [6]. AMDAL screening criteria now include bridges over 500 meters in length. The logical decision process has been clarified in this flow chart.

Annex 6 described the screening and requirements for SPPL, UKL/UPL and AMDAL. The preparation of the documents will be carried out by DSC Consultants or their sub consultants. In all cases the Project Proponent will be DGH and the approving agency will be the Bapedalda of the province or Kabupaten.

The estimated time required for a UKL/UPL study is 3 – 4 months, and for an AMDAL study, 6 – 12 months.

2.2. Standard Environmental Clauses For all works contracts, a set of standard environmental clauses (SECs) is included in Section 1.17 of the Technical Specification in the bidding documents. This is referred to in Part 3 Section 7 below under Environmental Specifications (Section 1.17). If one package requires additional treatment (whether or not as a result of environmental study), a set of Special Environmental Clauses (SpECs) may be added, to be included in the appropriate sub-section of Section 1.17 of the Technical Specification.

Ongoing World Bank projects (EIRTP-2 and SRIP) have used the term ‘standard operating procedures’ (SOPs) instead of SECs.

One SEC relates to HIV/AIDS awareness. Under both EINRIP and SRIP, Clause 6.7 of the General Conditions of Contract requires the Contractor to be responsible to encourage his personnel to attend a HIV/AIDS awareness program during the Contractor’s working hours. This program will be conducted by an approved service provider arranged by the consultant employed to assist the PMU. The Contractor remains responsible for other health and safety-related precautions for his personnel.

2.3. Land Acquisition A Land Acquisition and Resettlement Policy Framework (LARF) gives overall guidance for the preparation of full LARAPs, abbreviated LARAPs, and TRACER studies for those Sub-projects where land was previously acquired. The terms and procedures are described in Part II of this document.

2.4. Management of the Application of Safeguards Environmental and social safeguard activities must be coordinated with planning, design and construction. Figure 2-1 shows the scheduling of ESMF activities in relation to the sequence of contractual milestones for civil works contracts under EINRIP.

The preparation and implementation of LARAP and abbreviated LARAPs will be the responsibility of the relevant local government agency, coordinated by BAPPEDA. Responsibilities for all activities required are set out in the ESMF itself, which forms Parts II and III of these Guidelines.

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Monitoring of environmental impacts during construction will be carried out as one of the supervision tasks, to be specified in the Terms of Reference of the RSC. The format for routine observation and reporting of environmental impacts is shown in Annex 5, and is known as the Environmental Management and Monitoring Plan (EMMP). It is similar to that used under the EINRIP, where all likely impacts are listed, including those covered by Standard Environmental Clauses, and the observer has to evaluate whether or not each applies, and whether the Contractor is compliant with the requirements.

2.5. Monitoring of LARAP Implementation The ESMF requires that independent institutions (such as local NGOs, Universities of similar) be retained to periodically carry out external monitoring and evaluation of the implementation of LARAPs. This will be managed by the PMU with the support of the DSC.

2.6. Estimation of the Cost of Land Acquisition and Resettlement The ESMF requires that compensation be paid for land acquisition and resettlement based on:

• The pre-project or pre-displacement market value of land;

• The cost of any registration and transfer taxes;

• Material market price to build replacement buildings similar to the affected building or to repair a partially affected structure, including the cost of hauling materials and labour;

• Established price standards for various kinds of trees and cash crops;

• The cost of preparing land for agricultural and other use for resettlement;

• The cost of relocation assistance, which covers the cost of moving and an allowance equal to the local average cost of living in a transition period.

The cost of these items (Abbreviated as Land Acquisition Costs) is estimated as follows:

• The pre-project or pre-displacement value of land: following current Indonesia Regulation Perpres 36/2005, 65/2006 and BPN regulation 3/2007 the value of affected land will be determined by on the basis of appraisal carried out by Land Appraising Institution in the municipality or the district where the project is located. If the appraising institution does not exist, the task will be carried out by Land Appraisal Team formed by District Head. The calculation will be based on the total area of the land determined in the final design, or where final design has not yet been prepared; it should be estimated based on the maximum ROW. In both cases the value is based on the Selling Value of Tax Object (NJOP) in the current year or the actual market value in the 3 last years transactions. The factors affecting the value of land are: the location of the land, the type of rights in the land, the use of the land, the available infrastructure, the facilities and utilities, and the environment. The type of the land right and the status of land are as follows: Hak Milik (right of ownership), Hak Guna Usaha (right of exploitation), Hak Guna Bangunan (right of building), Hak Pakai (right of use).

• The cost of any registration and transfer taxes: registration and transfer taxes will cover any change of the documentation of land title/certificates caused by the reduction in the area of the affected land and increasing the DGH ROW. The cost will include cost for releasing, transferring the land title, and installing the boundary demarcation markers.

• Material market price to build replacement buildings Building and other objects related to land will be valued at their “replacement cost”, i.e., the market cost of the material to build a replacement structure with an area and quality similar to those of the affected structure, or to repair a partially affected structure, plus the cost of transporting building materials to the construction site, plus cost of any labor. In applying this method of valuation, depreciation of structures and assets will not be taken into account.

• Established price standards for various kinds of trees and cash crops: the value will be obtained during the preliminary survey for land identification of affected land or refer to the value determined by regional institutions in charge of agricultural matters in Kabupaten.

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• The cost of preparing land for agricultural and other use for resettlement: the quality of agricultural land should be a similar level to the affected land, and if the land needs improvement to a level similar with the affected land, the cost for preparation should be included. The cost estimate should cover all equipment and labour.

• The cost of relocation assistance, which covers the cost of moving and an allowance equal to the local average costs of living in a transition period: This cost will be included in the calculation of land value plus the cost for rebuilding or repairing the affected building/structure.

Note: In accordance with current Indonesia Regulations land donation is not acceptable.

The amount budgeted for WINRIP has been based on this method. Payment procedures for Land Acquisition are referred to the PMM.

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Figure 2-1 Scheduling of ESMF Activities in relation to Civil Works Sequence

Issue of Tender Docum

ents

4.3 Implement O & M Stage Environmental Management Measures 4.4 Monitor Implementation (4.3) 3.5 Document Activities in Monthly Reports

1. Pre-Bid / Tender Period 2. Pre-Construction Period 3. Physical Construction Period 4. Post-Construction Period 1.1 Conduct Screening 2.1 Apply E/S Studies and Procedures 3.1 Implementation of Construction Stage Environmental Management Measures 4.1 Evaluate Compliance 1.2 Conduct Consultations 2.2 Review Contractor Plans 3.2 Monitor Implementation of Environmental Management Requirements 4.2 Document Results 1.3 Conduct Detailed Studies 2.3 Disseminate Public Information 3.3 Monitor Implementation of Agreements on Social Aspects 1.4 Complete Land Acquisition 2.4 Conduct Consultations 3.4 Evaluate Monitoring & Consultation Results 1.5 Integrate ESMF with Designs, Technical Specifications and BoQ’s ... ESMF Responsibility ESMF Responsibility ESMF Responsibility ESMF Responsibility DSC, DGH, BAPPEDA, BAPEDALDA DGH, DSC DGH/DSC, Contractor, BAPEDALDA, BAPEDALDA, DGH Balai

Construction Period

with reference to Clauses in SBD

8.7 Delay attributable Defects to the Notification

8.2 Time for Completion Contractor Period

28d <28d 365d <21d

Contract Period

Contract C

lose Out

Mobilisation Period

Base date

Bid Submission Issue of Letter of Acceptance

TYPICAL SEQUENCE OF PRINCIPAL EVENTS DURING CONTRACTS FOR CONSTRUCTION

14.9 Payment of Retention Money (2nd half)

11.9 Issue of Performance Certificate

4.2 Return of Performance Security

4.2 Issue of Performance Security

Intended Take Over

9.1 Tests on Completion 10.1 Issue of Taking Over Certificate

14.9 Paym

ent of R

etention Money

(1st half)

1.6 Contract Agreement

8.1 Commencement Date

Advance Payment

Employer's Financial Arrangements

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PART II – WINRIP ENVIRONMENTAL & SOCIAL SAFEGUARDS (ESMF)

1. APPLYING ENVIRONMENTAL AND SOCIAL SAFEGUARDS

1.1. Environmental Safeguards GoI environmental safeguards for WINRIP are based on the Environment Impact Assessment System (AMDAL) as mandated by:

GOI PP No. 27, 1999; Ministry of Settlements and Regional Infrastructure KepMen Kimpraswil No. 17, 2003, MPW, Director General Highways, Guidelines for Env. Management of Road Projects, 2004 Ministry of Environment Regulation No 11, 2006

Ministry of Environment Regulation No 13, 2010

All proposed WINRIP subprojects are subject to environmental impact screening (Figure 1) to identify one of three treatments: i) standard environmental clauses only, ii) an environmental mitigation (EMiP) and monitoring (EMoP) plan (UKL/UPL) report or iii) a full EIA (AMDAL). Processes ii) and iii) include a requirement for an examination of potential impacts on both the biophysical and the socio-cultural and built environment, although the extent of the social impact in terms of land acquisition and resettlement has an impact on AMDAL only when land acquisition extends to more than 30 ha outside the RoW for inter-urban roads and less for increasingly urban areas. In such cases a full AMDAL is triggered.

Under the Ministry of Environment Regulation 13, 2010 all road betterment projects will require the preparation of a Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup (SPPL) (Letter of ability to manage and monitor the environment). This requires consultation and approval from the Kabupaten BPLHD/Bapedalda. This a new requirement and there is no experience of preparation and approval. The Format for preparation is included in Annex 3.

Standard Environmental Clauses (SEC), (referred to as Environmental Specifications or environmental Safeguards below) in the Contract Documents are required to support environmental management of all projects, including those for which mitigation measures have been identified.

In connection with the Environment and Resettlement the World Bank publishes a series of Operational Policies (OPs) and Bank Procedures (BPs) defining the Banks policies and agreements that must be followed in projects funded by World Bank Loans and Grants. OP’s are short focussed statements defining the Banks recommended approach for lenders in a particular subject. BP’s provide information on how the Bank staff carry out the policies defined in OP’s. For WINRIP the most relevant OP’s and BP’s are as follows:

OPs and BPs:

4.01 Environmental Assessment 4.04 Natural Habitats 4.10 Indigenous Peoples 4.11 Physical Cultural Resources 4.12 Involuntary Resettlement 4.36 Forests

All have some relevance to WINRIP but it will be essential that OP/BP 4.01 Environmental Assessment and OP/BP Involuntary Resettlement are reviewed and incorporated into the Government of Indonesia environmental and resettlement requirements wherever appropriate and necessary. In connection with Environmental Assessment the requirements of the World Bank are generally consistent with GOI requirement, but for Involuntary Resettlement the requirements of the World Bank are more detailed. This ESMF document has incorporated all the requirements of both the Government of Indonesia and the World Bank. The World Bank Office in Jakarta will need to be consulted where there is any uncertainty or confusion.

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Figure 1 : Indonesian Environmental Impact Screening Process

No UKL / UPL

Yes

No

No to All

Yes

Ministry of Environment Regulation No 11(2006): New construction of toll road of lengths > 5 km New construction of flyover or subway > 2 km New construction or betterment outside of ROW: • Urban or Metropolitan Roads > 5 km or Area ≥5 Ha • Medium City > 10 km or Area ≥10 Ha • Rural Area (Inter-Urban) > 30 km or area ≥ 30 Ha • Bridge Length ≥ 500 m

Reg 11(2006): Project will pass through one or more of the following:

1. Commercial / Resident Area 2. Productive Land 3. Monumental, Traditional / Religious Buildings 4. Nature Preserve (existing or proposed) 5. Wild Life Reserve 6. Conservation Forest 7. Protected Flora Area 8. Fauna Conservation Area / Wildlife Refuge 9. Wetland Area 10. Watershed Protection Area 11. Coastline / River Border 12. Lake / Basin Area 13. Water Resources Area 14. Marine Reserve and Other Water Areas 15. Mangrove Area 16. National Park 17. Forest Park 18. Nature Tourist Park 19. National Culture Preserve 20. Natural Hazard 21. Steep Slope Areas > 40% 22. Isolated Vulnerable People (IVP)

Yes to Any One

MSRI Regulation No. 17 Year 2003 (UKL/UPL): a. New construction and/ or Road Betterment

outside ROW anywhere: 1 Urban Metropolitan ≥1 Km to < 5 Km

length or ≥ 2 ha to < 5 ha area 2 Medium City, ≥3 Km to < 10 Km length 3 Inter Urban ≥ 10 Km to < 30 Km

length b. Betterment Road in metro area:

Road ≥ 10 Km length c. New bridge construction or Replacement

a. Metropolitan > 20 m b. Medium City> 60 m

No

Brief Mitigation and Monitoring Statements and/or Standard

Environmental Clauses (SECs)

Significant Impact likely?

AMDAL

Yes

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If the first tier screening indicates that nationally important features will not be significantly degraded a second tier of analysis must be completed where impacts, also in terms of significance, must be assessed for the following ecosystem components:

1.2. Application of Environmental Safeguards All sub-projects will be screened according to the screening process defined in Figure 1.

All sub projects will require the preparation of a SPPL (See Annex 3). For subprojects which have the potential to generate some adverse but not significant environmental impacts, the preparation of Environmental Mitigation and Monitoring Plans (UKL/UPL) will be required. This site-specific field investigation will identify the particular mitigation measures required for any subproject, and the monitoring processes required to be undertaken during implementation.

Projects which are identified as potentially generating significant environmental impacts require a full Environmental Impact Assessment (AMDAL), and this larger field study will identify whether the project as designed can be undertaken, and the mitigation measures needed to be included. The formats for reporting for both UKL/UPL studies and AMDAL studies, have been agreed and are summarized in the Project Management Manual (PMM).

1.3. Social Safeguards DGH have agreed to apply the World Bank’s Land Acquisition and Resettlement Planning Framework (LARF) (adapted from previous World Bank projects) as providing the relevant set of social safeguards to be used for WINRIP. The Framework outlined in Part II of this Document defines the conditions under which project-affected-people and households are categorized, and the procedures to be used for land acquisition, resettlement and compensation. Current GoI regulations (Presidential Proclamation No. 36/2005 and No 65/2006, and BPN Regulation No. 3/2007) regarding land acquisition and compensation will be used where this Framework provides less specific instructions, and/or where Indonesian laws must be applied.

The LARF identifies the conditions under which a Land Acquisition and Resettlement Action Plan (LARAP) or abbreviated LARAP is to be prepared whenever there are people who lose their property or fixed assets or who need to be relaced .

DGH have agreed that if land acquisition or land consolidation takes place for any subproject less than 2 years before the start of WINRIP, a “tracer study” will be required. This will be used to determine retrospectively whether land acquisition was conducted in a manner consistent with the requirements of a properly-conducted LARAP. If a positive finding is returned, the subproject will be accepted for inclusion in the WINRIP program.

The preparation and implementation of LARAP and abbreviated LARAPs will be the responsibility of the relevant local government agency (BAPPEDA), but these may be assisted by DGH and the WINRIP Design and Supervision Consultants (DSC) with the conduct of socio-economic surveys. BAPPEDA will be responsible for the issuance of all necessary Decrees, and the formation and management of Land Acquisition Committee (LAC) which will govern all entitlement and grievance issues, and oversee the compensation process. It is likely that a local NGO or University will be involved as independent compliance monitors.

Should any proposed WINRIP subprojects be located within 10 km of any Indigenous Vulnerable Peoples (IVP), a Social Impact Assessment (SIA) study will be required. If this identifies that the subproject will have a significant impact, then a full IVP Development Plan will need to be prepared, to identify ways of ensuring that adverse impacts are fully mitigated.

1.4. Roles and Responsibilities for Environmental and Social Safeguards Management All subprojects are to be identified and prepared in a manner that is fully compliant with the provisions of the agreed environmental and social safeguards. DGH through the , Project Management Unit (PMU) and Sub-Directorate of Environmental Affairs, will manage and support the activities of the WINRIP DSC such a way as to ensure this outcome.

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The DSC will undertake all required subproject field surveys, environmental investigations and social studies according to the requirements of these Safeguards, the provisions of relevant World Bank Guidelines and Indonesian Government laws and regulations.

The DSC will jointly support the requirements of both DGH and World Bank in all matters, The LARAP or abbreviated LARAP before submitting to the Bank for its review should be ensured by DGH that these documents are consistent with the LARF. After the WB’s approval, the local authorities (Bupati/Walikota) and/or any other government authorities with obligations under LARAP will confirm in writting that they are committed to comply with such obligations, including the provision of adequate budgets. All final documents will be submitted by DGH to World Bank for its review and “no objection”. In particular, World Bank “No objection” to the adequacy of Design and Bidding Documents, and the initiation of procurement for any subproject, will require the prior submission and acceptance of all required environmental and/or social impact studies and documents. World Banks “No Objection” to contract award will require that documentary evidence of the satisfactory completion of implementation of abbreviated LARAP or LARAP programs be provided.

2. THE ENVIRONMENTAL AND SOCIAL ASSESSMENT PROCESS TO BE APPLIED

2.1. Preparing a UKL/UPL or AMDAL The environmental screening process for all DGH road and bridge projects is summarized in Figure 1. Comparison of the circumstances of a subproject against the long-list of criteria found in Figure 1 will identify whether the project requires an AMDAL, an UKL/UPL or a simple set of SECs.

With either an AMDAL or UKL/UPL, mitigation and monitoring plans must be prepared. The preparation of the UKL/UPL or AMDAL documentation is specified in detail in the Indonesian law and regulations, and will be elaborated in the Project Management Manual (PMM). The 12 steps identified in Figure 2 generally define the process through the conduct and approval of the UKL/UPL and the implementation of the mitigation and monitoring plans.

Subprojects requiring AMDAL will need case-by-case planning and a timetable specific to the issues to be assessed. Involvement of Indonesia’s Ministry of Environment is likely.

Figure 2: Optimal Schedule of Steps for Completion of Subproject UKL/UPL Studies

Monitor overall project performance & DGH/WB

1 2 3 4 5 6 7 8 9 10 11 12 13 13 to 24 1 Conduct UKL / UPL study. DSC Sub Cons 2 Check / endorse UKL / UPL to Bapedalda for

approval. Sub-Dit 3 Review / approve UKL / UPL (maximum 30 day

review). Bapedalda 4 Integrate UKL / UPL measures into DED and Owners

& Estimate, and all other Contract Documents. DSC Sub Cons

5 Approve of Owner’s Estimate for UKL / UPL measures for Bid Docs. PMU

6 Review UKL / UPL docs & include cost for required measures in Bid.

Civil Works Contractors

7 Confirm UKL / UPL costs included in Bid Evaluations. PMU

8 Coordinate with Bapedalda in UKL / UPL monitoring and reporting. DSC/ P2JJ

9 Implement Required UKL / UPL Measures. Contractors 10 Supervise UKL / UPL performance of PMSC / RSC. Sub-Dit 11 Monitor subproject performance. PMU 12 Environmental compliance.

Step Description of Key UKL / UPL Activities PER Contract Package

Direct Responsibility

Months

ESS 13

2.2. Preparing a SPPL (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup)

Under new regulations these are required for all projects below UKL/UPL or AMDAL thresholds. The precise procedures are still to be determined. Their preparation will be the responsibility of DSC.

2.3. Preparing the Abbreviated LARAP and LARAP If any subproject requires land acquisition or the displacement of existing occupants or users of land affected by a subproject, an abbreviated LARAP or LARAP may be required. It is essential that these be carefully and properly conducted, so that no individual suffers adverse impacts without adequate compensation being paid, and that all processes used be fully transparent.

The process must start with a census of people and assets impacted or potentially impacted by the project. Based on this data, the abbreviated LARAP or LARAP process is triggered, each with a slightly different set of steps.

The steps identified in Figure 3 outline the process to be followed for WINRIP subprojects.

Figure 3: Optimal Schedule of Steps Required for LARAP and abbreviated LARAP Preparation

2.4. Social Impact Mitigation and Monitoring The abbreviated LARAP and LARAP process requires the definition of mitigation and monitoring measures and their listing in an implementation schedule, defining when the measures designed to mitigate land acquisition and relocation impacts must be started and completed. The implementation schedule, together with other sections of the LARAP, will guide the type and timing of the delivery of all mitigation measures and monitoring actions. As part of the abbreviated LARAP/LARAP documentation, monitoring and reporting tasks during and after the completion of all compensation actions will also be added to the implementation bar chart.

The PMU or its designated representative in the field will be required to submit short monitoring reports, describing the delivery of the compensation package to each PAP/PAH as per the implementation bar chart. The monitoring of the LARAP/abbreviated LARAP process will be undertaken by an independent monitoring team.

1 2 3 4 5 6 7 8 9 1 Establish approx number of PAPs/PAHs involved and

categorize as LARAP or ABBREVIATED LARAP DSC, PMU & BAPEDA

2 Conduct ABBREVIATED LARAP or LARAP, including PAP survey, entitlement matrix, implementation schedule DSC

3 Review / finalize draft ABBREVIATED LARAP/LARAP, DSC/BAPEDA / PMU

4 Review / approve draft ABBREVIATED LARAP/LARAP,

DGH WBank

5 Authorize GOI funding for ABBREVIATED LARAP/LARAP implementation and agreed compensation payments. PMU & BAPEDA

6 Form Land Acquisition Committee (LAC) to oversee LARAP process (not needed for ABBREVIATED LARAP).

BAPEDA & Local Government

7 Implement ABBREVIATED LARAP/LARAP, including payment of agreed compensation. LAC or BAPEDA

8 Monitor and report on SLRARP/LARAP implementation. DSC/ BAPEDA / PMU

9 Review ABBREVIATED LARAP/LARAP monitoring report / issue NOL for civil works contract DSC DGH WBank

Months

Note: For an ABBREVIATED LARAP the process from identification of PAPs to completion of compensation agreements and an implementation schedule, should take no more than 2 months. The disbursement of the compensation depends on GoI actions but should agree with the schedule.

Step Description of Key ABBREVIATED LARAP or LARAP Activities Direct Responsibility

for approval.

ESS 14

2.5. Language of Environmental and Social Documentation English translations required will be short executive summaries for each UKL/UPL, AMDAL and LARAP. The main documents will be prepared in Bahasa Indonesia, unless Bina Marga has specific other requirements.

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PART III – LAND ACQUISITION AND RESETTLEMENT POLICY FRAMEWORK (LARF)

1. DEFINITIONS

The definitions used in this Policy Framework are:

1. “Project” means the WINRIP (Western Indonesian National Road Improvement Project) including all Project components, sub projects and its activities as described in the Loan Agreement between the Republic of Indonesia and the Bank.

2. Sub Project is part of the project, which the physical activity is on the government, provincial and Kabupaten/Kota authority area.

3. “Government” means the Government of the Republic of Indonesia.

4. “Province Government” means the Regional Government of a province in the Western of Indonesia (part of Sumatra).

5. “Kabupaten/Kota Government” means the Kabupaten/Kota Government in a province in the West of Indonesia (part of Sumatra).

6. “Project Affected Persons“(PAP) are person or institution or business unit affected by land acquisition for a project including (i) persons who have to relocate as a result of land acquisition for the project; (ii) person who lose land and/or other assets taken for the project temporarily or permanently; and (iii) persons who lose income and/or their livelihood as a result of land acquisition for the project.

7. “Physically Displaced Persons“, are people affected by the project who have to relocate because : (i) the remaining land or building is not sufficient for shelter or work place, or (ii) the remaining land is less than 60m2, or (iii) the remaining agricultural land is no longer adequate for cultivation.

8. “Land acquisition” means an activity by any level of Government to obtain land, for the project by means of giving compensation to the parties releasing the land, building, trees crops and other assets related to the land.

9. “Compensation“ means replacement of land at replacement value, either with land-for-land of equivalent size or productivity, or payment of cash equivalent to replacement value if land is not available or the PAP choose cash, and includes the replacement value of buildings, plants and/or other assets connected with the land as impact of the right of land release or transfer.

10. “Resettlement” means an effort / activity to relocate the Project Affected Persons into a new location which meets the requirements of settlement so that they can develop a better life or at least equal with the previous condition.

11. “Relocation Assistance” means the assistance provided to displaced persons/families to cover (i) the costs of moving from their previous to a new location, and (ii) an allowance equal to the local average costs of living if a transition period is needed to resettle in a new location of residence or business.

12. “Resettlement Assistance” means an effort/activity to improve ability and PAP economic and social life, so that they can improve their standard of living or at least equal with the previous life before the sub project implementation. The resettlement assistance includes efforts to handle the difficulty in transition period.

13. “Tracer study” means a due diligence study conducted to ensure proper procedures according to World Bank OP 4.12 have been carried out and the outcomes have been what would have been expected under this policy framework in the event land acquisition and/or resettlement has occurred in an area of a subproject before the appraisal date.

2. GENERAL PRINCIPLES

1. Involuntary resettlement should be avoided where feasible, or minimized to the extent possible. During

the sub project preparation process, consideration of technical options shall involve a concurrent assessment of potential associated land acquisition impacts, so that, where feasible, design alternatives to minimize such impacts can be identified as early as possible.

2. Where it is not feasible to avoid resettlement, physically displaced people should be assisted in their efforts to improve their livelihoods and standards of living or at least equal with the previous life.

3. PAPs will receive proper compensation based on calculation of the real replacement cost of the assets they lose as a result of the impact of sub project. Any affected assets and all eligible persons will be compensated.

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4. PAPs should be fully consulted and should receive proper information of their rights and be provided with opportunities to participate in planning and implementation of land acquisition and resettlement.

5. If the PAPs and Local Government are unable to come to an agreement on a resettlement action plan after more than a year, the sub project will be deleted from WINRIP program.

6. If the PAPs number less than 200 people (40 hhs), or if less than 10 % of productive assets are lost and no people are physically displaced, an abbreviated LARAP can be done. Otherwise a full LARAP will be required. However, the specific requirements for an abbreviated or full LARAP in particular sub projects should be reviewed in case-by-case basis.

7. This Policy Framework provides guidelines and a set of procedures of Land Acquisition and Resettlement for PAPs appropriate to their social and economic condition.

8. Tracer studies have been conducted for a number of identified subprojects for which land acquisition had been undertaken before the appraisal date in order to assess whether the process was compliance with the requirement of the Bank’s OP 4.12.

3. PREPARATION, APPROVAL AND IMPLEMENTATION OF LARAP

1. Preparation and approval of LARAP: the DGH will prepare a Land Acquisition and Resettlement Action Plan (LARAP) or an abbreviated LARAP, depending on the anticipated impacts of land acquisition for a Sub-Project.

2. The LARAP or the abbreviated LARAP prepared in collaboration with or by Local Government, the DGH will ensure that these documents are consistent with this LARPF before submitting it to the WB for approval.

3. The WB will provide No Objection Letter if the LARAP is consistent with the LARPF. After the WB’s approval, the local authorities (Bupati or Walikota) and/or any other government authorities with obligations under the LARAP will confirm in writing that they are committed to comply with such obligations, including the provision of adequate budgets for activities under their responsibility. The land acquisition process can start only after the LARAP has been approved by the WB.

4. Implementation of Resettlement Instruments: During the implementation of the LARAP or abbreviated LARAP, the appropriate government authorities will provide regular progress to the PMU, which will forward those reports to the WB. The WB will issue a No Objection Letter (NOL) for physical construction of a Sub-Project once land acquisition is complete and the PAPs have been compensated according to the LARAP. Construction can commence after the PAPs have accepted the compensation offered and “relinquished” or “submitted” their rights to the land and assets taken for the project.

4. SOCIO ECONOMIC SURVEY, INFORMATION AND CONSULTATION 4.1 Socio-Economic Survey and Inventory of Assets Lost

1. As part of the planning and land acquisition process, the relevant level of Government will conduct a survey to (i) define the areas to be affected by the subproject by making the drawing alignment, (ii) collect basic socio-economic data on the PAPs, and (iii) identify the impacts on each PAP (or affected family) with regard to all assets lost and whether they will be displaced. The survey will constitute the baseline against which implementation progress will be monitored.

2. The socio-economic survey should be conducted after project designs are provided or at least after the road corridor alignment is determined.

3. The date of the socio-economic survey will be the latest cut-off point to record the persons in the Project area who will receive compensation, resettlement and resettlement assistance.

4. The socio economic survey will be a detailed description about PAP social economic condition before the subproject is implemented. The survey should include such information as:

a. Social characteristics of all Project Affected Persons and households: numbers, age, gender, education, job, standard of living, time of stay.

ESS 17

b. Information about vulnerable groups, such as low-income groups, female-headed households, elderly, orphans, minorities, and handicapped, those without legally protected title to land, and other marginal groups.

c. Land tenure and transfer systems including patterns of authority over land.

d. Sub project impacts on the PAP’s patterns of economic and social activity, including impacts on social networks and social support systems.

e. Where resettlement is taking place and PAPs are relocated to new locations, the capacity of services (schools, medical) in the host community to accommodate the resettlers should be assessed.

5. The inventory of assets lost will record for each PAP (or affected household) (i) the total size of plot affected, area to be taken for the sub-project, and area of the residual land, the legal status of land to be taken; (ii) structures affected indicating the percentage of the structure to be affected by sub-project; (iii) description of land use on the lot affected-residential, commercial, agricultural; (iv) number of affected other assets (crops, trees, well, etc); (v) any information needed, such as whether the PAP will be displaced, etc (see table B).

6. The socio survey and inventory of assets lost will include all PAPs, and will be the basic information informing land acquisition, resettlement and resettlement assistance processes.

7. The replacement cost of land will be determined on the basis of an appraisal carried out by licensed appraisers for project requiring more than one hectare of land. Where the project requires 1 ha. or less, the land should be acquired directly from the owner through a purchase, trade or other method agreed by the government institution requiring the land and the owner.

8. The result of survey and asset inventory is announced in some accessible places, such as Kantor Desa/kelurahan; project office; etc to give opportunity for asset owners to submit their objection.

4.2 Information, Awareness, and Consultation

1. Local Government will conduct intensive awareness campaigns among PAPs, to provide information about planned subproject activities, possible subproject impacts, and compensation and resettlement options.

2. Awareness and consultation will be conducted together with social economic survey among all PAP and related stakeholders. These activities can be conducted through open discussion, FGD (focus group discussion), dialogue, or other ways appropriate to local condition. Care should be taken to ensure consultations include vulnerable and marginal groups.

3. The purpose of the consultation is to accommodate the opinions/aspirations, and suggestions of PAPs and related stakeholders about land acquisition and resettlement policy and strategies.

4. The consultation process should be recorded and provided in LARAP (see table A).

4.3 Independent Organization In conducting social economic survey activity described in sub chapter 1. Local Government will involve

independent institutions, which have good experience in social economic survey or community development work.

4.4 Land Acquisition and Resettlement Action Plan (LARAP) 1. Based on the results of the survey described in sub-chapter 4.1, the appropriate level of Government

prepares a comprehensive Land Acquisition and Resettlement Action Plan (LARAP) or abbreviated LARAP depending on the level of possible impact as described in Chapter 2, paragraph 6 above.

2. A full LARAP will contain the following elements :

a. sub project description

b. potential impacts of the subproject, including project activities leading to impacts and the areas of impacts;

c. main objectives of the Land Acquisition and Resettlement Action Program

d. findings of the socioeconomic study and inventory of assets lost

ESS 18

e. institutional framework identifying the agencies responsible for planning, implementation, and monitoring of resettlement activities, and any steps necessary to enhance the capacity of those agencies to carry out resettlement activities

f. eligibility criteria for PAPs for various kinds of compensation and resettlement assistance

g. principle to be used in valuation of assets;

h. resettlement measures, including description of the packages of compensation and other resettlement measures for each category of eligible persons, site selection, preparation and relocation strategies for those PAPs that will be relocated to new sites, housing, infrastructure and social services, environmental protection and management where appropriate, mechanisms of community participation in the resettlement process (including host communities);

i. grievance procedures

j. implementation schedule, including costs and budget

k. monitoring and evaluation arrangements.

3. Abbreviated LARAP

If PAP less than 200 people, or if productive assets affected by the sub project are less than 10%, then an abbreviated may be prepared. An abbreviated LARAP will contain, at a minimum, the following elements:

• Census survey of PAPs, assets lost, and valuation of assets

• Compensation and rehabilitation assistance description;

• Consultation with PAPs about compensation alternatives

• Institutional responsibility for implementation and procedures for grievance redress;

• Arrangements for monitoring and implementation; and

• Schedule and funding.

4. The LARAP will be prepared by the appropriate level of government to be delivered to the WINRIP secretariat, Public Works Ministry, which, after review, will submit the LARAP to the Bank for review and clearance. After World Bank approval, the LARAP will be formally issued as a Bupati/Walikota Letter.

5. The World Bank will issue a NOL for procurement to proceed for the subproject once land acquisition is complete and all payments of compensation completed. Proof of acquisition completion and payment of compensation will be required. World Bank NOL for contract award will be issued after documentary evidence is received that all PAPs have received compensation as established by the LARAP.

6. During implementation of the LARAP the appropriate level of government will provide regular progress reports to the WINRIP Secretariat which will forward those reports to the World Bank.

4.5 Tracer Study If a subproject included on the list of the Project Implementation Plan (PIP) is proposed for WP1, 2 or 3 and land acquisition for the subproject was conducted before the date of appraisal by the local government without a LARAP approved by the Bank, a “tracer study” shall be conducted to evaluate whether the land acquisition has been well implemented appropriate with the Land Acquisition and Resettlement Policy Framework between Government of Indonesia and The World Bank and to evaluate PAP condition before and after the land acquisition. Any subproject in the PIP for which land acquisition began subsequent to the date of apprasial will not be considered for funding without preparation of a satisfactory LARAP. For subprojects under WP1 the process is already completed.

5. LAND ACQUISITION 5.1 Compensation

1. The PAPs will receive fair compensation calculated at real replacement cost. Replacement costs are: (i) for land: it will be determined on the basis of appraisal carried out by licensed appraisers. (ii) for housing and other buildings: replacement based on material market price to build replacement building similar to the affected building, or to repair a partially affected structure, plus cost of transporting building materials to construction site, plus cost of any labour an contractors fees and cost of registration and transfer taxes. In determining this replacement cost, depreciation of assets and material salvage value are not countable, nor are lost assets affected by value added as a result of project activities.

ESS 19

2. Compensation for trees, plants and other assets are to be negotiated based on established price standards for various kinds of trees and cash crops.

3. Follow up monitoring and evaluation of the implementation of the compensation process will be conducted to make sure that PAPs receive their compensation as described in the LARAP. Monitoring will conducted by a local independent institution (such as higher level education institution) and will include a census or sampling survey depending on the number of HH affected by project. The report and recommendation will be made publicly available.

5.2 Relocation Assistance Displaced persons/families will be assisted with regard to:

1. the costs of moving from their previous location to a new location

2. an allowance equal to the local average costs of living if a transition period is needed to resettle in a new location of residence or business (e.g. during the time it takes to build a new house/business).

5.3 Rehabilitation Assistance In addition to the compensation for land, building, and fixed assets, PAPs, who have suffered an income or welfare loss due to the displacement (e.g. job loss) will receive rehabilitation assistance to assist them in re-establishing or improving their livelihoods in the new environment. Rehabilitation assistance can be provided in parallel with subproject construction and implementation.

5.4 Compensation Alternatives 1. Based on the agreement reached at the negotiation, the eligible PAPs can choose to receive cash

compensation or land replacement.

2. Physical displacement may include provision of serviced sites, land swaps, low cost housing, real-estate housing provided through a Bank Tabungan Negara (BTN) credit facility, or other schemes organized by the appropriate level of Government.

3. PAPs can also form cooperative housing groups to construct housing. For this Local Government will coordinate with relevant institutions to provide service and rehabilitation assistance as needed.

4. The Displaced Persons will not bear the costs of depreciation of their buildings, and charges or taxes related to the relocation or compensation.

5. PAPs can take and bring their salvaged building materials to the new site.

6. Cash compensation must be given to PAPs before their move to a new location or the destruction of their old building.

5.5 Categories of Project Affected Persons PAPs can be grouped into:

a) Those who have legal land certificate, document that proves ownership (such as girik, land transfer documents or other legitimate proof), recipient of Islamis public social land (natzir) or adat title (individual or communal);

b) Those who occupy land in a residential, commercial, or industrial zone in the Project area, but do not hold a certificate or legal title;

c) Those who occupy public land on sites such as rivers, roads, parks, or other public facilities in the Project area; and

d) Those who are renters.

a. Persons who Have Land Certificate, document that proof of ownership (such as girik, land transfer documents or other legitimate proof), recipient of Islamis public social land (natzir) or adat title (individual or communal);

i. PAPs who have land certificate, document that proof ownership (such as girik, land transfer documents or other legitimate proof), recipient of Islamis public social land (natzir) or adat title, will receive compensation for the land, building, and fixed assets appropriate with ownership status and its environmental condition.

ESS 20

Ii PAPs described in sub-chapter 4.4, who are displaced by the Project, can choose to receive cash compensation or the other options as described in sub chapter 4.4.

iii. The lots at the resettlement site will have land title of the same level or higher (whenever possible) than they previously had, and the certificate will be issued within 6 months after displacement of the physically displaced persons.

iv. PAPs will receive transport allowance to move themselves and their belongings.

v. PAPs who suffer an income decline due to resettlement will also receive rehabilitation assistance to increase their ability to improve their lives.

b. Persons Who Occupy Land in a Residential, Commercial or Industrial Zone in the Project

Area But Do Not Hold Legal Documents

i. PAPs who are recorded in the baseline survey and who occupy land in a residential, commercial, or industrial zone in the Project area, but do not hold a land certificate, girik, or hak adat, will receive compensation of land, building, and fixed asset according to the length of their stay and the replacement value of the assets.

ii. PAPs who are displaced, can choose to receive cash compensation or the other options as described above.

iii. The lots at the new site will have Hak Pakai or a higher land title, and the certificate will be issued within 6 months after the displacement.

iv. PAP will receive transport allowance sufficient to move their belongings.

v. PAP who suffer an income decline due to resettlement will also receive rehabilitation assistance from the Local Government to increase their ability to improve their lives.

c. Persons Who Occupy Public Land on Infrastructure or Public Facility Sites

i. PAPs who are recorded in the socio-economic survey as occupying areas that are clearly delineated as public land such as railway, under bridge or fly over, etc., will receive allowance and other rehabilitation assistance from the local government.

ii. In cases that (i) the public area has been occupied for long period of time without any sanction from the government, (ii) people occupying the land have received recognition from the government by incurring the obligation to pay land tax or fees, or

iii a camat/lurah agreement has been effected on land transactions such that it is no longer clear the land is public land, then the PAP should receive compensation based on the recommendation of the socio-economic survey

d. Persons Who Are Renters

PAP who are renters, and are recorded in the socio-economic survey, will be assisted in finding a rental house, or a housing site of similar size to the one lost, which can be rented or rent-purchased through affordable instalments.

5.6 Land donation Land donation will not be acceptable.

5.7 Resettlement Site a. The resettlement site provided for relocating displaced persons will include adequate infrastructure

and public facilities to promote development of a good social and economic life, including:

i. Road or footpath as necessary;

ii. Drainage system;

ESS 21

iii. Water supply (if a piped water distribution network is not available, there should be wells that comply with health standards);

iv. Electricity;

v. Access to health facility, education, work places, religious services, and sport facilities, in accordance with the size of the new community; and

vi. Access to public transport facilities.

b. The location reserved for resettlement as described in point 1 of this sub-chapter will be widely publicized so that the general public will be well informed.

c. Physically displaced people will be informed of the completion of the resettlement site at least one month before relocation, and they will be invited to survey the new site.

d. The physically displaced persons will move to the new site after the infrastructure and facilities at the resettlement site are completed and feasible to live in as confirmed by the Project supervisor and local community leader.

6. LIVELIHOOD RESTORATION ASSISTANCE 6.1 Types of Assistance

a. PAPs whose job, income, or living are disturbed by the Project or are physically displaced will receive assistance to improve their standard of living or at least to maintain it at the level before the implementation of the subproject.

b. The assistance program will give priority to vulnerable community members and groups, including women headed households.

c. In implementing the assistance care should be taken to smoothly integrate the newly resettled people with the host community in the resettlement area.

d. The assistance can be linked to existing programs and resources.

e. Resettlement/rehabilitation assistance may include one or more of the following:

i. Allowance.

ii. Motivation development;

iii. Skill and vocational training;

iv. Assistance to start and develop small businesses;

v. Small scale credit;

vi. Marketing development;

vii. Strengthening of community based organization and services

viii. Conflict resolution and mediation

ix. Training to promote gender equality, such as woman access and participation in decision-making.

x. Health training about the environment, reproduction, HIV/AIDS.

6.2 Assistance Schedule and Cost f. For those PAPs to be relocated, the assistance will start during the consultation prior to

displacement. The program should be limited only in one year budgeting but can be conducted in several years appropriate with PAP needs.

ESS 22

g. Funds for the extended assistance will be reserved from the Project funds or other sources as defined by the Bupati/Walikota in the LARAP.

7. INSTITUTIONS AND FUNDING 7.1 Land Acquisition Committee (LAC) The various activities described above will be implemented in coordination with the Land Acquisition Committee (LAC) in each Local Government.

7.2 Head, Members, and Tasks of the Land Acquisition Committee a. The Land Acquisition Committee will be chaired by the Bupati/Walikota, with members from the

relevant agencies in the Local Government (e.g. Land Agency, Technical agency requiring the land, Administrative Agency)

b. The tasks of the Land Acquisition Committee include, among others:

i. to inform and consult to the PAPs on plans for subproject plan;

ii. to appoint licensed land appraisers or institutions or to form Land Appraisal Team to appraise land price for compensation;

iii. to conduct asset inventory to be acquired;

iv. to disclose affected asset in places that can be accessed easily by PAPs;

v. to negotiate and reach agreement on compensation with PAPs.

7.3 Consultation and Assistance by Independent Institution a. In the planning and implementation, especially related to the information/awareness, consultation,

training and assistance to the community, the LAC will be assisted by independent institutions which are experienced in LARAP requirements and community development. They should be keen and skilful in community development and they should be able to integrate various sectoral activities at the community level.

b. Transparency and consultation should be strengthened to solve local problems quickly and effectively. Complaints that cannot be solved locally will be processed through the procedures described in Presidential Decree (Perpres) No. 36/ 2005 and No. 65/ 2006 and BPN Implementation guideline No. 3/2007.

7.4 Coordination between BAPPEDA and LAC 1. Bappeda should act as the main coordinator handling all environmental and social matters connected

with works. This would include consultation, land and building acquisition and compensation, resettlement, and rehabilitation assistance. Bappeda should also be responsible for liaison with all stakeholders and non-governmental organizations

2. Intensive communication and coordination should be developed between Bapedalda, Bappeda, and the Land Acquisition Committee. Joint meeting coordination will be conducted at least once each month.

3. Bupati/Walikota and other related officials conduct the evaluation for the development of land acquisition and resettlement and rehabilitation assistance, at least one for each month.

4. Provincial Government together with its related institutions will monitor and assist the Local Government in conducting community rehabilitation assistance as describe on this Framework Policy.

7.5 Coordination 1. Reports and funding sources for the implementation information campaign, consultation, assistance, and

resettlement as described in this Policy Framework shall be coordinated with the Project WINRIP at Local Government in related Province.

2. General arrangements will be covered in the Project Implementation Plan. The details of the cost and funding sources will be covered in the LARAP which will be determined by the Bupati/Walikota as agreed by the relevant funding sources.

ESS 23

3. The Project Management Unit WINRIP at the related province will provide the proposed LARAP to the WINRIP Secretary, Public Works Ministry to be furnished to the World Bank for review and approval.

4. Independent institutions will be retained as required by the Project and/or Bank to periodically carry out external monitoring and evaluation of the implementation of the LARAPs.

5. Bank may carry out an inspection of the site or location of candidate sub-projects with prior notification to The Executing Agency (PPU/PMU) although the inspection can be conducted independently. The result of inspection, which shall be discussed with related local government agency, shall be informed to the Executing Agency.

8. MONITORING AND EVALUATION 8.1 Internal monitoring and reporting

Internal monitoring and reporting on the preparation and implementation of LARAPs and abbreviated LARAPs will be undertaken by the Monitoring team comprising representatives from Local Government, project-affected people, and NGO/Civil social organisation or University on a monthly basis and will include:

1. Information on consultations held during LARAP preparation and implementation; 2. Information on the delivery of compensation and rehabilitation entitlements as stipulated in the LARAP

comprising (i) the timely provision of compensation to individual PAPs, and (ii) the timely provision of rehabilitation assistance (relocation and income restoration assistance) to individual PAPs (see Table 1 for reporting format).

3. Information on grievance redress (see Table 1 for reporting format) 4. The Socio-Economic Survey and Inventory of Assets Lost undertaken during the preparation of the

LARAP will constitute the baseline for monitoring of implementation progress. 5. Monthly monitoring information on each sub project will be shared with the World Bank. 6. Quarterly project report will include consolidated information on the status of LARAP implementation

prepared by the PMU and submitted to the World Bank. 7. The budget for internal monitoring will be borne by local government.

8.2 External Monitoring and Evaluation 1. By the Midterm Review and by Project closure, an evaluation based on TOR approved by the Bank will

be conducted by an independent consultant to assess (i) whether the planned compensation and rehabilitation entitlements have been provided to the PAPs as planned in the LARAPs, and (ii) whether adequate income restoration measures were planned, and whether these have enabled the PAPs to at least restore their standard of living, or whether they still face serious problems which require further assistance.

2. If the PAP has not been able to overcome income and the standard of living problems, the Local Governments will provide an extension of the assistance.

3. The budget for External Monitoring and Evaluation will be borne by the Project.

9. GRIEVANCE MECHANISM Project affected people can submit any complaint on LARAP implementation to either Bappeda, Monitoring Team, Sub-project Manager, or the PMU-WINRIP. The Team shall respond it by conducting an investigation and deliberation no later than twelve working days (see Annex 7). For any complaint on disagreement of compensation amount the project will follow the existing regulation (Perpres 36/2005 and 65/006 and BPN No. 3/2007) (see Annex 7).

10. TREATMENT OF INDIGENOUS VULNERABLE PEOPLE

10.1 Indigenous People and Road Development

The social and economic development of all groups of people is a long term aim of both the GOl and the World Bank. With respect to planning and development of an integrated transport network this means taking special efforts

ESS 24

to reduce the physical isolation of communities, thereby allowing them to more equitably share in the social and economic gains of development activities available to other communities. At the same time efforts need to be made not to unduly disrupt the social values and distinct cultural traditions of indigenous peoples.

Setting out a fixed procedure for dealing with indigenous peoples is difficult since each project and types of impacts are likely to vary considerably. What is required is sensitivity to the unique needs and concerns of each group. Planners must exercise judgment in identifying which communities and groups will require special attention.

The World Bank identifies "indigenous peoples" as " .... social groups with a social and cultural identity distinct from the dominant society that makes them vulnerable to being disadvantaged in the development process” (Operational Directive 4.10). The concern of the World Bank is that peoples so identified share in the development process, but in a manner which does not disrupt or damage their unique socio-cultural heritage.

'Isolated Vulnerable Peoples' (Masyarakat Terasing, previously translated as 'Isolated Peoples commonly referred to now as Komunitas Adat Terpencil') are not necessarily culturally or ethnically different in the eyes of the GOI but are physically residing in remote areas having poor communications and access to services.

10.2 Government of Indonesia Approach

In general terms, Bina Marga believes that the construction of new/improved roads in the vicinity of 'Isolated Vulnerable People' provides considerable benefits to those people but accept that there are also some disbenefits to such people. These views being based on the post construction evaluation of some projects and other reports, including the recently completed VI study "Independent Monitoring and Evaluation of the Impact of Kabupaten Road Projects on Isolated Peoples for Regions in Sumatra and Kalimantan" and a similar study done by Universitas Cendrawasih in Irian Jaya.

For the purposes of Road and Bridge Development, 'Isolated Vulnerable Peoples' are deemed to include, at least, those identified in Departement Sosial's "Data dan lnformasi Pemberdayaan Adat Terpencil (2002) and "Basil Pendekatan sosial Budaya 1995/1996". However, prior to proceeding with the detailed planning/design of any new/improved road in a remote area, the latest available information on 'Isolated Vulnerable Peoples' should be obtained from the appropriate offices of Dinas Sosial at Province and Kabupaten and from the local community and NGO's.

In particular, it is thought that improved accessibility, due to the availability of a new/improved road, will provide the 'Isolated Vulnerable Peoples' with better access to education and health facilities, and economic opportunities. Potential disbenefits include exploitation by persons from outside of the community, a loss of identify/culture and an inability to fulfill newly created opportunities, due to a lack of training/education/financial resources.

10.3 Screening for Indigenous Peoples It is essential that all sub-projects are screened for any potential impact on indigenous peoples at the earliest opportunity in the planning process. In practical terms the particular difficulty however with indigenous people is that it can be difficult to define with any decree of accuracy who are indigenous peoples and where they are located. Precisely who the indigenous peoples are and where they are located are outside the scope of this project and advice will be sought from NGO's, the local community, or Kabupaten or Provincial Government. In order to ensure that appropriate actions are taken, any sub-project within WINRIP located within 10 kilometers of any known indigenous peoples will be screened to determine whether further studies are necessary, such as a Social Impact Assessment (SIA) or an Indenous Peoples Planning Framework (IPPF).

10.4 World Bank Guidelines

The World Bank have prepared a set of guidelines (OP. and BP. 4.10) for road projects passing through or close to Indigenous Peoples. These guidelines provide a suitable approach for dealing with Indigenous Peoples in the context of the WINRIP.

The following section outlines firstly the Bank's guidelines for dealing with indigenous peoples and secondly outlines the GOI procedures and processes.

10.5 Recommended Guidelines and Approach for Treatment of Indigenous People

Guidelines

ESS 25

Where it is determined that a subproject will pass close to (within 10 km) or through an indigenous people community, a process will be followed to ensure full consultation, participation and consent of all peoples. The social and economic benefits of the road should be in harmony with their cultural preferences. This is in accordance with the World Bank's OD 4.10 on guidelines for indigenous peoples and present GOI recommendations. • Provide full consultation and participation with the Indigenous Peoples; • Avoid or minimize potentially adverse effects of such sub-projects.

In order for meaningful consultation and participation to take place, several steps will be put in place, including:

• Information dissemination will be in the local language or languages;

• A representative / leader and an NGO representative or a social scientist knowledgeable in the Indigenous Peoples' history and tradition will always be present in all discussions with clusters of indigenous peoples; and

• All meetings will be recorded and shared with the concerned groups.

Approach

If Indigenous Peoples are identified as being potentially adversely affected an Indigenous Peoples Planning Framework (IPPF) should be prepared.

This sets out:

(a) The types of programs and subprojects likely to be proposed for financing under the project; (b) The potential positive and adverse effects of such programs or subprojects on Indigenous Peoples; (c) A plan for carrying out the social assessment for such programs or subprojects; (d) A framework for ensuring free, prior, and informed consultation with the affected Indigenous Peoples’ communities at each stage of project preparation and implementation (see paragraph 10 of this policy). (e) Institutional arrangements (including capacity building where necessary) for screening project-supported activities, evaluating their effects on Indigenous Peoples, preparing IPPs, and addressing any grievances; (f) Monitoring and reporting arrangements, including mechanisms and benchmarks appropriate to the project; (g) Disclosure arrangements for IPPs to be prepared under the IPPF.

The Social Assessment:

• The breadth, depth, and type of analysis required for the social assessment are proportional to the nature and scale of the proposed project’s potential effects on the Indigenous Peoples.

• The social assessment includes the following elements, as needed:

(a) A review, on a scale appropriate to the project, of the legal and institutional framework applicable to Indigenous Peoples.

(b) Gathering of baseline information on the demographic, social, cultural, and political characteristics of the affected Indigenous Peoples’ communities, the land and territories that they have traditionally owned or customarily used or occupied, and the natural resources on which they depend.

(c) Taking the review and baseline information into account, the identification of key project stakeholders and the elaboration of a culturally appropriate process for consulting with the Indigenous Peoples at each stage of project preparation and implementation (see paragraph 9 of this policy).

(d) An assessment, based on free, prior, and informed consultation, with the affected Indigenous Peoples’ communities, of the potential adverse and positive effects of the project. Critical to the determination of

ESS 26

potential adverse impacts is an analysis of the relative vulnerability of, and risks to, the affected Indigenous Peoples’ communities given their distinct circumstances and close ties to land and natural resources, as well as their lack of access to opportunities relative to other social groups in the communities, regions, or national societies in which they live.

(e) The identification and evaluation, based on free, prior, and informed consultation with the affected Indigenous Peoples’ communities, of measures necessary to avoid adverse effects, or if such measures are not feasible, the identification of measures to minimize, mitigate, or compensate for such effects, and to ensure that the Indigenous Peoples receive culturally appropriate benefits under the project

Construction Period

During construction of the road, the DGRI and the subproject contractor should meet with the Indigenous Peoples community leaders to discuss the contractor's works schedule / program and any potential problems, so as to ensure good relations between both the community and the contractor throughout the construction period.

During construction of the road to provide job opportunities (on-site) to the inhabitants of the 'Indigenous Peoples' community. If necessary, training should be provided, so that they can actively participate in the road development.

11. ADDITIONAL COMMUNITY CONSULTATION REQUIREMENTS

Some additional community consultation requirements are referred to below. It should be stressed that consultation with the local community and their representatives is an essential element of road development. The consultation program will have the following main elements:

• To inform the community of the proposed sub project, its scope, its extent and timing and duration; • To consult all families directly affected by the project: i.e. those families who will have land or buildings

acquired or partially acquired, demolished or partially demolished. The consultation should focus on; • To consult, in accordance with Government regulations and requirements during the preparation and

approval of UKL/UPL/AMDAL and abbreviated LARAP/LARAP; • To consult the community prior to and during the construction phase to ensure all members are aware of

the construction activities and to give sufficient warning of temporary loss of access, road diversions and other disturbances.

All consultation must be organised and led by the Kabupaten and local community leaders and representatives. The Consultants and Contractors should not lead the consultation but should attend and provide expert advice and support where necessary. It is recommended that all the community consultation requirements outlined in EINRIP ESS are followed wherever necessary and appropriate. In particular based on other recent programs (including EINRIP) it is important that the following aspects are covered during consultation:

• Project affected families must be identified at the earliest opportunity to ensure effective consultation; • Where possible project affected families should be shown the approved detailed design to indicate how they

will be affected and exactly where the improved road will pass; • All local community leaders and representatives must be involved at the earliest opportunity and briefed by

the Project or the Kabupaten. The local leaders and representatives need to be able to provide advice and support to those families directly affected.

• Compensation for land must be ‘fair’ to all parties. Unnecessarily low (NJOP values) or unreasonably high (values based on unreal potential development values) should be avoided.

• All agreements, payments and consultation must be clearly recorded, and must be signed by all parties involved;

• Any agreements with the communities or individuals must be arrived at in open discussion and agreement. There should be no forced agreements or undue encouragement.

PART IV – ENVIRONMENTAL SPECIFICATIONS Ensuring well managed and environmentally acceptably construction activities can be achieved through the inclusion of specific ‘Environmental’ specifications in the General Specifications. The EINRIP program included the preparation of Environmental specifications which was a significant amendment to specifications normally used by Bina Marga. The EINRIP Environmental Specifications were widely publicised to all parties (including Contractors) by Bina Marga at the commencement of the EINRIP program. These EINRIP Specifications have been used as a basis for

ESS 27

enhanced technical specifications for WINRIP and are included in Appendix 4. A number of additions and amendments have been made based on recommendations made in the Aide Memoire;

a. Spoil disposal: This is covered in a new sub paragraph: 1.17.2.8. (b). It covers the management, storage and disposal of all spoil materials. b. Quarry management The existing sub paragraph 1.17.2.10 is strengthened to ensure good environmental management of the Contractors Quarry activities. c. Contractors camps Revised paragraph 1.17.2.10 (e) strengthens the management of the Base Camp d. Erosion and sedimentation management This is covered in existing paragraph 1.17.2.7 (a) and in the contents of paragraph 1.17.2.1. e. Other matters: Paragraph 1.17.2.2 (g) Strengthening watering of the site to reduce dust. Paragraph 1.17.2.5 (h) Safety of Explosives in Quarries Paragraph 1.17.2.10 (d) Repair and damage of haul routes

These amendments can be seen in the attached revised Environmental Specifications in Annex 4. Requirement for additional pay items in the BoQ

Many of the activities covered in the Environmental Safeguards referred to in the section above are matters of good construction management and require Contractors to undertake certain good management activities. In these cases no separate pay item is appropriate. The previously prepared Environmental Specifications included the following paragraph: 1.17.1 BASIS FOR PAYMENT

Separate payment shall be made for some environmental management operations executed in accordance with this Section of these Specifications where actual operations are required. These separate pay items are listed in the table below.

For other activities included in Section 1.17 which rely on good management of construction activities that ensure minimum disturbance to the environment and local communities no separate payment shall be made. . The cost of this work shall be included in the Unit Price of all other Pay Items included in the Contract, which prices shall be deemed full compensation for furnishing all materials, labour, equipment, tools and other incidental necessary for the environmental management. If the Contractor fails in the performance of this work, the Engineer, without relieving the contractor of his responsibility, shall be entitled to carry out such work as he deems to be necessary and to charge the Contractor with the full cost of rectification thereof which sum shall be deducted from any money due or which may become due to the Contractor under the Contract. The Engineer will be responsible for defining the works necessary to rectify the issue and preparing a cost estimate.

The details of the pay items are included in Annex 4.

ANNEX 5 PMU_UPDATE05032012 Page 1 of 4 9/18/2012

ANNEX 5 THE PROJECT MANAGEMENT UNIT


ANNEX 5 : THE PROJECT MANAGEMENT UNIT

1. SUMMARY Project management will be coordinated by a Project Management Unit (PMU-WINRIP), chaired by the Director of Planning (Bipram) in Directorate General of Highways (DGH). The PMU will ensure implementation of all aspects of the Project Management Manual (PMM) and the preparation and submittal to the lender and Steering Committee of monthly, quarterly and annual progress reports on project implementation. 2. DUTIES AND RESPONSIBILITIES The PMU will be responsible for the timely and effective conduct of the following:

1. Making recommendations to the Steering Committee, carrying out policies determined by the Steering Committee and coordinating implementation of all aspects of the Project in line with the Loan Agreement;

2. Providing Loan management by coordinating and monitoring communications in relation to WINRIP, both internally within DGH and between DGH and external agencies;

3. Monitoring of all Project activities using the Project Implementation Plan (PIP) and Project Management Plan (PMM) as yardsticks until Project completion, including overseeing all activities detailed in the Anti-Corruption Action Plan (ACAP);

4. Keeping the Project Management Manual (PMM) up to date and ensure that its users are aware of its contents;

5. Ensuring that unaudited reports prepared on time - these reports include; financial reports, procurement and TA and physical progress reports, and consolidated unaudited interim financial reports for the whole Project for submission to IBRD;

6. Timely submission of unaudited financial reports to IBRD no later than 30 days after the end of the respective quarter;

7. Assisting in the facilitation of exchanges of communications as requested between the Directorate of Planning, Directorate General of Highways and IBRD;

8. Following up matters relating to quality of physical works based on reports received;

9. Making recommendations on proposals for technical and administrative matters that require IBRD approval;

10. Serving as the primary point of contact for all IBRD Project related inquiries; 11. Ensuring effective implementation of the Anti Corruption Action Plan; 12. Carrying out other duties as required by the PMU related to the Loan Agreement

and its attachments. 3. STRUCTURE AND STAFFING

The full time professional positions in the PMU-WINRIP are as follows:

1. Executive head at an appropriate senior level; 2. Assistant 1 for Planning and Programming; 3. Assistant 2 for Procurement, Implementation and Supervision;


4. Assistant 4 for Monitoring and Financial Reporting; 5. Assistant 5 for Environmental Management and Monitoring.

There will also be two full-time sub-professional staff, Receptionist / Secretary and Computer Operator. The organization ands staffing of the PMU will be as shown in Figure 1. Figure 1: Organization Structure and Staffing of PMU-WINRIP

4. EQUIPMENT This sub-component will include an adequate inventory of office and communications equipment to support management of the project and administration of the PMU-WINRIP by the Directorate of Planning in DGH.


5. INCREMENTAL OPERATING COSTS This component of the WINRIP cost represents marginal expenditures which would not be incurred if the Project were not implemented. The additional expenditures incurred by the WINRIP will include additional staff travel, out-of–station per diem allowances, communications, consumables, web page operation and maintenance, advertising of bidding, printing and publication of Project information, rental of meeting facilities and payments for other specific output-related activities. It will not include Government staff salaries and routine allowances and honoraria. Based on recent experience of the PMUs for other recent projects and allowing for unit cost increases, an average monthly expenditure of US$ 18,000 is expected. This would total US$ 864,000 for a total of some 48 months (6 + 39 +3) of implementation.

Project Implementation Plan (PIP) for WINRIP Annex 6

ANNEX 6 Proc Arngmts_UPDATE05032012 Page 1 of 7 9/18/2012

ANNEX 6

PROCUREMENT ARRANGEMENTS



ANNEX 6 PROCUREMENT ARRANGEMENTS

1. GENERAL PROCUREMENT REQUIREMENTS The general procurement requirements are outlined in order of procedure, in the following documents:

1. The Project Loan Agreement; 2. The World Bank’s “Guidelines for Procurement under IBRD Loans and ADA’s

Credits, May 2004” Revised May 2010 (the Procurement Guidelines); 3. The World Bank’s “Consulting Services Manual, May 2004” Revised May

2010 (the Consultant Procurement Guidelines); 4. Presidential Decree No 54 of 2010 and its subsequent amendments, insofar

as it is consistent with 1, 2. and 3. above, as varied by procurement arrangements to be set out in the Loan Agreement;

5. The Project Management Manual (PMM) for WINRIP. 2. SPECIAL PROCUREMENT REQUIREMENTS

2.1 PRIOR REVIEWS AND APPROVALS BY IBRD IBRD will undertake Prior Review of all procurement over predetermined thresholds (see Table 1) to support issuance of No Objection Letters (NOL) at each stage of the procurement process. Prior Review for a civil works contract will consider, among other things, whether a Chief Supervision Engineer has been appointed by DGH for the respective contract. Prior Review of the DSC contract will consider, among other things, the adequacy of the remuneration for field staff and the qualifications, experience and background of the person(s) nominated as the Chief Supervision Engineer(s). In addition, documentary evidence of the satisfactory completion of any environmental or social impact studies, and land acquisition, must be submitted as a pre-condition for issuance of a NOL for Procurement. Documentary evidence of the satisfactory completion of any SLARAP or LARAP activities is to be submitted as a pre-condition for issuance of a NOL for Contract Award. IBRD requires prior review and approval to support issuance of NOL for each procurement. The respective documents which must be submitted for IBRD review and NOL issuance at each stage of civil works, goods and consultant services procurement are summarized below:

1. Copies of all draft Bidding Documents prior to their release to potential bidders or short-listed firms, including; • Budget cost estimates, • Owner’s estimate, • Timed Bidding schedule, • Invitation to bid, • Instructions to bidders/RFP,



Table 1 : Summary of Prior Review Thresholds and Procedures

Description and Value Procurement Procedures Civil Works

Construction contracts (roads and bridges) US$ ≥10 million Construction contracts (roads and bridges) US$ <10 million

ICB – Limited international competitive bidding (IBRD eligibility criteria) with Pre –Qualification and Prior Review. NCB – Limited National competitive bidding (IBRD eligibility criteria) with Post -Qualification and Prior Review.

Goods (if any)

Goods over US$ 200,000 ICB – Limited international competitive bidding (IBRD eligibility criteria) with prior review

Goods under US$ 200,000 NCB – National competitive bidding with prior review

Consultants Services Implementation support and technical assistance over US$ 100,000

ICB – international bidding with prior review, Quality and Cost Based Selection (QCBS)

• General Conditions of Contract, • Special Conditions of Contract, • Specifications, designs and drawings and ToRs, • Schedule of quantities.

2. Copies of all draft Bidding Documents prior to their release to potential

bidders or short-listed firms, including; • Bidding and evaluation schedule, • Bid opening record, • Evaluation of all bids for administration, technical and arithmetic errors, • Record of all clarifications (if any), • Copy of bid advertisement, • Copy of bid security from recommended lowest bidder, • Lowest evaluated bidder qualification summary, • Unit price details or lump sum price breakdown, • Value of Owner’s Estimate.

3. Copies of signed contract document detailing any contract amendments.

4. Amendments to contracts; • Technical justification and consideration for costing, • Correspondence between Engineer, Project Manager and Contractor, • Proposals for adjustment of Major Pay Items (if any), • Revised detailed work schedule by pay item.



3. REGISTRATION AND POSSIBLE ELIGIBILITY RESTRICTIONS

1. Bidding shall not be restricted to pre-registered firms. 2. Where registration is required, the lowest evaluated bidder identified in

the evaluation process;

• shall be allowed a reasonable amount of time to complete the registration process prior to contract signing, and

• shall not be denied registration for reasons not related to their capability and resources to successfully perform the contract, which shall be verified through post-qualification.

4. PRE-QUALIFICATION Pre-qualification procedure will be applied for International Competitive Bidding for prior review. These will be based on agreed criteria between the IBRD and DGH before procurement commences. 5. POST-QUALIFICATION Post-qualification procedures will be applied for National Competitive Bidding. These will be based on agreed criteria between the IBRD and DGH before procurement commences. 6. JOINT VENTURES A bidder declared the lowest evaluated responsive bidder shall be required to form a joint venture or to sub-contract part of the works, services or the supply of goods as a condition or award of contract if the value exceeds Rp 50,000 million (works), Rp 10,000 million (goods) or Rp 5,000 million (services). 7. PREFERENCES

1. No preference of any kind shall be given to individual bidders. 2. Regulations issued by the sectoral ministry, provincial and local

regulations, which restrict national competitive bidding procedures to a class of contractors or a class of suppliers shall not be applicable to procurement procedures under the Loan.

8. ADVERTISING

1. Invitations to bid shall be advertised in at least one widely circulated national daily newspaper allowing a minimum of 30 days for the preparation and submission of of bids and allowing potential bidders to purchase bidding documents up to 24 hours prior to the deadline for the submission of bids;

2. All tender notifications must be advertised in national newspapers, on the

MPW Semi E-Procurement system, on the WINRIP website, UNDB on-line and dg Market websites;



3. In addition to availability on the internet free of charge, bid documents shall be made available by mail or in person, to all who are willing to pay the reasonable required fee;

4. Bidders domiciled outside the area of the unit responsible for the

procurement shall be allowed to participate regardless of the estimated value of the contract;

5. Foreign bidders complying with the IBRD eligibility criteria shall not be

precluded from bidding. If a foreign firm is declared the lowest evaluated bidder, it shall be given a reasonable opportunity for registering for operation in Indonesia.

9. BID SECURITY At the bidder’s option, Bid Security shall be in the form of a letter of credit or bank guarantee from a reputable bank. 10. BID OPENING AND BID EVALUATION

1. Bids shall be opened in public, in accordance with the requirements of

the World Bank Procurement Guidelines; 2. Evaluation of bids for goods and civil works shall be carried out in strict

adherence to the criteria declared in the bidding documents and contracts shall be awarded to the lowest technically qualified and responsive bidder. For consultancy services under QCBS, award will be made on the basis of the scoring methodology advised in the bidding documents;

3. Bidders shall not be eliminated from detailed evaluation on the basis of

minor, non-substantial deviations; 4. No bidder shall be rejected merely on the basis of a comparison with the

Owner’s Estimate and budget ceiling without IBRD’s prior concurrence; 5. The evaluation of technical proposals shall be completed within four

weeks of the deadline for receipt of proposals, and the proposal for the award of contract shall be completed, along with the draft contract, within four weeks after completion of a technical evaluation or following the IBRD’s no-objection to the technical evaluation report;

6. The qualifications and experience of members of the procurement

committee shall be fully documented, retained on file to serve as evidence of their suitability to serve as members of the committee and available for subsequent review by IBRD and other interested parties.

11. REJECTION OF BIDS

1. All bids shall not be rejected and new bids solicited without IBRD’s prior concurrence

2. When the number of responsive bids is less than three, rebidding shall

not be carried out without IBRD’s prior concurrence.



12. PROCUREMENT ARRANGEMENTS Without limitation on the provisions of this Schedule and of the Procurement Guidelines and Consultant Guidelines, the following provisions shall apply in respect of goods, works and consultants’ services to be procured under the Project

1. The Procurement Plan, including all updates thereof, shall be made publicly available promptly after their finalization;

2. All short lists of consultants shall be made available to any member of the

public promptly upon request;

3. A summary of the evaluation of all bids and proposals for specific contracts shall be disclosed to all bidders and parties submitting proposals therefore, promptly after the notification of award to the successful bidder / consultant. Information in such summaries will be limited to a list of bidders / consultants, all bid prices and financial proposals as read out at public meetings for bids and financial proposals, all bids and proposals declared non-responsive (together with reasons for such an assessment), the name of winning bidder / consultant and the contract price. Such summaries will be made available to any member of the public promptly upon request.

4. Contract award information for all contracts for goods, works and consultant

services shall be made publicly available and published widely (including on the Project Website), and be made available to any member of the public upon request, promptly after such award.

5. The public shall be permitted to attend bid openings in respect thereof.

6. In the case of consultants’ services:

• A Procurement Agent (appointed by IBRD) shall officially witness the

opening of technical and financial proposals, and certify the minutes of opening of technical / financial proposals, and

• A Procurement Agent (appointed by IBRD) shall be required to keep on a safe place one copy of the technical proposals submitted by each consultant (once they are opened), the sealed financial proposals (before they are opened), and one copy of the financial proposals (once they are opened).



13. CONTRACT PACKAGES TO BE ADVERTISED WP-1 Table 2 : Contract Packages to be advertised WP-1

Package Province Type IDR (mn)

US$ (mn)

Post / PreQual

Date of Advert

Krui – Biha Lampung Capacity Expansion 148,668.00 16.52 Pre-

qualification 30 Dec11 Padang Sawa – Simpang Empat incl.Air Gadang Brg

West Sumatra

Capacity Expansion 207,390.30 23.04

Pre-qualification

30 Dec11

Manggopoh – Padang Sawah

West Sumatra

Capacity Expansion 152,434.90 16.94 Pre-

qualification 30 Dec11

Ipuh - Bantal Bengkulu Capacity Expansion 226,275.10 25.14 Pre-

qualification 30 Dec11

14. PROCUREMENT PROJECT PLAN Table 3 : Procurement Project Plan

Procurement Plan of Implementation Support and Road Sector Institutional DevelopmentWestern Indonesia National Roads Improvement ProjectName of Executing Agency: Directorate General of Highways , Ministry of Public Works.

Edit 230212

Schedule

Allocated Contract Actual Submission WB NOL Submission WB NOL

2 Implementation Support

Schedule 11-Oct-11 01-Nov-11 21-Dec-11 10-Jan-12 07-Feb-12 22-Feb-12 07-Mar-12 18-Apr-12 16-May-12 30-May-12 14-Jun-12 28-Jun-12 19-Jul-12 02-Aug-12

Actual 26-Nov-10 7-Jun-11 30-Jan-12 16-Aug-11

Schedule 11-Oct-11 01-Nov-11 21-Dec-11 10-Jan-12 07-Feb-12 22-Feb-12 07-Mar-12 18-Apr-12 16-May-12 30-May-12 14-Jun-12 28-Jun-12 19-Jul-12 02-Aug-12

Actual 26-Nov-10 7-Jun-11 9-Sep-11

3 Road Sector Institutional Development (DGH)Capacity Building for DGH Environment/ Schedule

Risk Mitigation and Road Safety Unit

(developing roadmap, norm, standard, procedure, criteria for disaster risk management in road sector, risk analysis and standad implementation)

Actual

T E R

QCBS Prior

5,000,000

1,000,000

b

Date of Receipt of Proposals

QCBS

QCBS

Prior

Prior

Evaluation and Short ListSubmission RFP to WB

EOI advertised in newspaper

WB NOL to RFP

T O T A L

Review by Bank

(Prior/Post)

WB provide agreement to

REOI

a

Ref. No. Contract Description

Project Cost (US$) Procurement Method

Core Team Consultant (Project Management, Technical Assistant, Enviromental & Social Aspect and Road safety Audit)

Design and Supervision Consultant (Design AWP-2 & 3 and Construction Supervision of Civil Works Project)

10,000,000

Negotiation & Draft

Contract

Contract Sign

Completion Date Remarks

WB NOL to evaluation of

Tech.Proposal

Service Start date

Period (Month)

Final evaluation of quality & cost

Procurement Plan of Civil WorksWestern Indonesia National Roads Improvement Project (WINRIP)Name of Executing Agency: Directorate General of Highways , Ministry of Public Works.

Qualification Schedule Submission Notification

Sub - Project Link No. Length Criteria Actual of of(Km) IDR (x10⁶) USD million IDR (x10⁶) (Pre/Post) Application Qualification

A W P - 11 Krui - Biha Lampung 053.0 25.00 ICB Prior 148,668.00 16.52 Pre Schedule 12-Jan-11 09-Feb-11 09-May-11 07-Aug-11 25-Nov-11 20-Jan-12 02-Mar-12 16-Mar-12 06-Apr-12 20-Apr-12 08-Jun-12 03-Aug-12 17-Aug-12 27-Aug-12

Actual 25-Jan-11 21-Feb-11 02-Nov-11 28-Dec-11 30-Dec-11 28-Feb-122 Padang Sawah - Sp.Empat West Sumatera 047.2 40.90 ICB Prior Schedule 12-Jan-11 09-Feb-11 09-May-11 07-Aug-11 25-Nov-11 20-Jan-12 02-Mar-12 16-Mar-12 06-Apr-12 20-Apr-12 08-Jun-12 03-Aug-12 17-Aug-12 27-Aug-12

Including Air Gadang Bridge 0.10 Actual 25-Jan-11 21-Feb-11 02-Nov-11 28-Dec-11 30-Dec-11 28-Feb-123 Manggopoh - Padang Sawah West Sumatera 047.1 32.00 ICB Prior 152,434.90 16.94 Pre Schedule 12-Jan-11 09-Feb-11 09-May-11 07-Aug-11 25-Nov-11 20-Jan-12 02-Mar-12 16-Mar-12 06-Apr-12 20-Apr-12 08-Jun-12 03-Aug-12 17-Aug-12 27-Aug-12

Actual 25-Jan-11 21-Feb-11 02-Nov-11 28-Dec-11 30-Dec-11 28-Feb-124 Ipuh - Bantal Bengkulu 015.1 42.40 ICB Prior 226,275.10 25.14 Pre Schedule 12-Jan-11 09-Feb-11 09-May-11 07-Aug-11 25-Nov-11 20-Jan-12 02-Mar-12 16-Mar-12 06-Apr-12 20-Apr-12 08-Jun-12 03-Aug-12 17-Aug-12 27-Aug-12

Actual 25-Jan-11 21-Feb-11 02-Nov-11 28-Dec-11 30-Dec-11 28-Feb-12Sub Total AWP - 1 734,768.30 81.64

A W P - 2Group - 1/2

5 Simpang Rampa - Poriaha North Sumatera 015. 11.10 NCB Prior 55,126.00 6.13 Post Schedule 01-Dec-12 15-Dec-12 08-Dec-12 22-Dec-12 12-Jan-13 02-Mar-13 20-Apr-13 04-May-13 11-May-13Actual

6 Ps. Pedati - Kerkap Bengkulu 010.0 25.00 NCB Prior 72,018.00 8.00 Post Schedule 01-Dec-12 15-Dec-12 08-Dec-12 22-Dec-12 12-Jan-13 02-Mar-13 20-Apr-13 04-May-13 11-May-13Actual

Group - 2/27 Indrapura - Tapan West Sumatera 019.0 19.50 ICB Prior 96,921.00 10.77 Pre Schedule 12-Jan-13 02-Feb-13 31-Jan-13 14-Feb-13 21-Feb-13 28-Mar-13 02-May-13 16-May-13 30-May-13 13-Jun-13 01-Aug-13 19-Sep-13 03-Oct-13 10-Oct-13

Actual8 Bts.Kota Pariaman - Manggopoh West Sumatera 024.0 46.80 ICB Prior 183,268.00 20.36 Pre Schedule 12-Jan-13 02-Feb-13 31-Jan-13 14-Feb-13 21-Feb-13 28-Mar-13 02-May-13 16-May-13 30-May-13 13-Jun-13 01-Aug-13 19-Sep-13 03-Oct-13 10-Oct-13

Actual9 Rantau Tijang - Kota Agung Lampung 026.1 42.00 ICB Prior 149,831.00 16.65 Schedule 12-Jan-13 02-Feb-13 31-Jan-13 14-Feb-13 21-Feb-13 28-Mar-13 02-May-13 16-May-13 30-May-13 13-Jun-13 01-Aug-13 19-Sep-13 03-Oct-13 10-Oct-13

Actual10 Simpang Empat - Sp.Air Balam West Sumatera 034.1 61.70 ICB Prior 241,617.00 26.85 Pre Schedule 12-Jan-13 02-Feb-13 31-Jan-13 14-Feb-13 21-Feb-13 28-Mar-13 02-May-13 16-May-13 30-May-13 13-Jun-13 01-Aug-13 19-Sep-13 03-Oct-13 10-Oct-13

ActualGroup - 3/2

11 Bantal - Mukomuko Bengkulu 015.2 50.10 ICB Prior 157,820.00 17.54 Pre Schedule 25-Apr-13 16-May-13 14-May-13 28-May-13 04-Jun-13 09-Jul-13 13-Aug-13 27-Aug-13 10-Sep-13 24-Sep-13 12-Nov-13 31-Dec-13 14-Jan-14 21-Jan-14Actual

12 Kambang - Indrapura West Sumatera 017.2 55.20 ICB Prior 171,948.00 19.11 Pre Schedule 25-Apr-13 16-May-13 14-May-13 28-May-13 04-Jun-13 09-Jul-13 13-Aug-13 27-Aug-13 10-Sep-13 24-Sep-13 12-Nov-13 31-Dec-13 14-Jan-14 21-Jan-14Actual

13 Sp Rukis - Tj Kemuning Bengkulu 006.1 56.30 ICB Prior 225,481.00 25.05 Pre Schedule 25-Apr-13 16-May-13 14-May-13 28-May-13 04-Jun-13 09-Jul-13 13-Aug-13 27-Aug-13 10-Sep-13 24-Sep-13 12-Nov-13 31-Dec-13 14-Jan-14 21-Jan-14Actual

Sub Total AWP - 2 1,354,030.00 150.45A W P - 3

Group - 1/314 Painan - Kambang West Sumatera 017.1 31.50 ICB Prior 118,993.00 13.22 Pre Schedule 20-Jul-13 10-Aug-13 08-Aug-13 22-Aug-13 29-Aug-13 03-Oct-13 07-Nov-13 21-Nov-13 05-Dec-13 19-Dec-13 06-Feb-14 27-Mar-14 10-Apr-14 17-Apr-14

Actual15 Sibolga - Batas Tapsel North Sumatera 016.1 36.00 ICB Prior 129,228.00 14.36 Pre Schedule 20-Jul-13 10-Aug-13 08-Aug-13 22-Aug-13 29-Aug-13 03-Oct-13 07-Nov-13 21-Nov-13 05-Dec-13 19-Dec-13 06-Feb-14 27-Mar-14 10-Apr-14 17-Apr-14

Actual16 Seblat - Ipuh, Including Bengkulu 009.4 34.50 ICB Prior 110,237.00 12.25 Pre Schedule 20-Jul-13 10-Aug-13 08-Aug-13 22-Aug-13 29-Aug-13 03-Oct-13 07-Nov-13 21-Nov-13 05-Dec-13 19-Dec-13 06-Feb-14 27-Mar-14 10-Apr-14 17-Apr-14

Air Lalang & Air Guntung Bridge 0.052 Actual17 Sp.Gng Kemala - Pugung Tampak Lampung 061.1 36.80 ICB Prior 104,238.00 11.58 Pre Schedule 20-Jul-13 10-Aug-13 08-Aug-13 22-Aug-13 29-Aug-13 03-Oct-13 07-Nov-13 21-Nov-13 05-Dec-13 19-Dec-13 06-Feb-14 27-Mar-14 10-Apr-14 17-Apr-14

Including Way Taau Bridge(**) 0.03 ActualGroup - 2/3

18 Mukomuko - Batas Sumbar Bengkulu 015.3 25.80 NCB Prior 69,233.00 7.69 Post Schedule 30-Oct-13 20-Nov-13 13-Nov-13 27-Nov-13 25-Jan-14 15-Mar-14 03-May-14 17-May-14 24-May-14Actual

19 Lais - Bintunan Bengkulu 009.1 11.60 NCB Post 37,558.00 4.17 Post Schedule 30-Oct-13 20-Nov-13 13-Nov-13 27-Nov-13 25-Jan-14 15-Mar-14 03-May-14 17-May-14 24-May-14Actual

20 Lubuk Alung - Sicincin West Sumatera 002.0 14.60 NCB Prior 54,557.00 6.06 Post Schedule 30-Oct-13 20-Nov-13 13-Nov-13 27-Nov-13 25-Jan-14 15-Mar-14 03-May-14 17-May-14 24-May-14Actual

21 Lubuk Alung - Kuraitaji West Sumatera 027.0 16.80 NCB Prior 65,788.00 7.31 Post Schedule 30-Oct-13 20-Nov-13 13-Nov-13 27-Nov-13 25-Jan-14 15-Mar-14 03-May-14 17-May-14 24-May-14Actual

Sub Total AWP - 3 689,832.00 76.65

Total AWP - 1 , 2 & 3 2,778,630.30 308.74

Ref. No. Province Procurement Method

Prior/Post Review Request

Date

Estimated Cost Contractor

Name

Construction

PeriodAppr'd

/NOL Date

Invitation for Bids

Date

Bid Opening

Date

Bid Evaluation Report

NOL Date

Contract Signature

DateSubmitted Date

207,390.30 Pre

Pre

Invitation for Pre-

qualification

Evalt.Qualification Report

Request Date

Appr'd /NOL Date

Submitted Date

Appr'd /NOL Date

23.04

Contract Amount

Design Bidding Document (including qualification)Estimated Cost


ANNEX 8 FinManPlan_FINAL240212 Page A.8.1 of 10 9/18/2012

ANNEX 8

FINANCIAL MANAGEMENT PLAN



APPENDIX 8

FINANCIAL MANAGEMENT PLAN

1. INTRODUCTION The Financial Management Plan (FMP) has been prepared to ensure that fiduciary requirements are applied to budgeting, disbursements, accounting, contract administration, financial reporting and monitoring of all expenditures under the Project. The FMP is described briefly in Section 3.3 of the Project Implementation Plan. This Annex provides more detail on key aspects of the FMP. Financial Management activities for WINRIP are described in more detail in the Project Management Manual (PMM), where sample formats are provided to illustrate how records are entered, how financial data is extracted from the database and how data are presented to management.

2. EXISTING BUDGETARY CONTROL SYSTEMS

The Government has established mandatory systems covering the four activities which comprise Budget planning and implementation. Designed by the Ministry of Finance (MoF), they represent a rational procedure commencing with programming proposals and culminating in the reporting process. These activities are as follows:

• Planning / Work Plan. A formal budget proposal is prepared by each Satker (Work Unit managing a component of the Project) to the Ministry of Finance. The relevant document is the Rencana Kerja dan Angaran – Departemen dan Lembaga (RKA-KL).

• Budget Formulation. A budget is prepared for each Satker by MoF. This is presented in Dokumen Isian Pelaksanaan Anggaran (DIPA).

• Payments System. Payments are made based on Payment Requests or Surat Perintah Membayar (SPM) prepared by authorized SPM issuers. MoF Treasury Offices, known as Kantor Pelayanan Perbendaharaan Negara (KPPN), issue Payment Orders, Surat Permohonan Pencairan Dana (SP2D), for the payment of funds.

• Reporting. An accounting system, Sistem Akuntansi Instansi (SAI), is used by each Satker to record their expenses and to generate electronic files, Arsip Data Komputer (ADK), containing transactions details and summaries.

The output of the four activities is consolidated upwards through two intermediate tiers of management to provide, at central Government level, totals for each Line Ministry and Institution within the Central Government administration. While all four activities are satisfactory in isolation there is a lack of integration. Data produced by one cannot automatically be input to the next. Also, when output data are submitted up three levels in the managing structure, transmission is by disk rather than by electronic transfer. These are shortcomings and are being addressed by the Government. But, with some 20,000 Satker offices, the development and implementation of improvements is problematic.



3. BUDGETING AND FUND AVAILABILITY The Government budget preparation procedures are described in Section 3.3.2 of the PIP Main Text. These are supposed to be completed in early January with the issue of the final budget document (DIPA). At that time the Ministry of Finance advises each Budget User (Pengguna Anggaran - eg. Line Ministry) of its total allocation and how this is divided between its Directorates and ultimately Work Units (Satker), such as individual projects. Efficient project management is essential to ensure that realistic forecasts of funding needs are prepared and submitted in a timely manner during planning and budgeting process so that the DIPA reflects the real needs of the project. A problem outside the control of the project is that in most years there have been delays in the issue of DIPA. The effect of this on project implementation is reviewed in Section 4, Risk Management. It should also be noted that current regulations require all Satker officials to be formally reappointed at the beginning of each fiscal year. The large number of these officials has led to delays in the formal appointments, by way of official letter, of some. Until such letters of appointment are received, no official has the authority to act and project implementation must be temporarily halted. This risk is referred to in the PIP in Section 4.1, Risk Management. Budgetary or organizational problems may result in delays in payments to contractors. Where permitted under the Terms and Conditions of Contract, this may result in claims for compensation being submitted. This represents a financial risk to the Project. 4. DISBURSEMENT PLAN Based on the Project Implementation Schedule in Annex 12 of the PIP, the estimated disbursement schedule during each six-month period during the Project is shown in Table 1. The amount estimated to be required during the first six months is US$ 19 million. The average amount for each six month period is US$ 44 million, peaking at US$ 88 million during the 5th six month period. Table 1 : Estimated Disbursement per Six Month Periods (US$ millions)

Period Estimated Amount (US $ millions) Start Finish 6 Month Period Cumulative

January 2012 June 2012 0 0

July 2012 December 2012 18.78 18.78

January 2013 June 2013 33.25 52.03

July 2013 December 2013 49.88 101.91

July 2014 December 2014 58.78 160.69

July 2014 December 2014 88.17 248.86

January 2015 June 2015 53.00 301.86



July 2105 December 2015 35.33 337.19

January 2016 June 2016 12.81 350.00 5. DISBURSEMENT MECHANISMS As noted in Section 3.3.3(a), there are three channels for disbursement of loan funds. These channels are described briefly hereunder and in more detail in the Project Management Manual (PMM). 5.1. SPECIAL ACCOUNT (RK) It is expected that a Special Account (RK) will be set up in Bank Indonesia (BI) specifically for the Project to handle WINRIP funding and disbursements. IBRD will provide initial forward funding in an agreed sum to be deposited in this Special Account. When a payment is made for eligible expenditure, as evidenced by the payment documentation (SP2D), Bank Indonesia (BI) is advised by KPPN and BI debits the project Special Account with the equivalent sum in loan currency. To replenish the Special Account, the FMR quarterly financial reporting system is used to furnish IBRD with forecasts of disbursements expected to be required during the next three months. If there are insufficient funds in the Special Account to meet this expenditure, IBRD will transfer sufficient funds to meet forecast needs. The FMR also provides the data needed by IBRD to record actual disbursements made in its own loan account records. The Special Account will be liquidated at the end of the Project and all unspent funds returned to the IBRD. For some small items of expenditure, where activities are implemented through self-management, funds are advanced by government to the Satker. Such advances cannot be drawn from the Loan funds, unless and until, the expenditure is duly accounted for through the Payment Order. Such expenditures are identified by a special suffix (GU) They are included with other payments (SPM-LS) when reimbursement from the Loan Account is sought. 5.2. DIRECT PAYMENTS (DP) Exceptionally, the Government of Indonesia may request direct payment to a contractor from IBRD. This request must be in writing and require the prior agreement of the IBRD. If agreed to by them, the IBRD would then arrange for funds to be transferred direct to the bank account of the supplier, contractor or consultant. Such requests need to be submitted at least 30 days in advance of the payments due date. The rate of exchange to be used for determining the amount of US Dollar withdrawal will be the cost on the date of withdrawal of purchasing the currency required by the supplier, contractor or consultant.



5.3. REIMBURSEMENT TO GOI BY IBRD In exceptional circumstances there may be insufficient funds on the Special Account to reimburse GoI. If and when such occasions arise, the GoI will send a claim for reimbursement direct to IBRD and funds are to be transferred to the central treasury (Bendahara Umum Negara or BUN) account in Indonesia. Such reimbursements will be made in Indonesian Rupiah. The amount of each withdrawal from the Project Loan shall be calculated as the equivalent in terms of the cost in US$ on the date of withdrawal of purchasing Rupiah. 6. PAYMENT PROCEDURES Payments due to contractors under civil works contracts will be certified by the Engineer. Other payments will be approved using procedures as set out in the PMM. The payment procedure prescribed by the Government must be adhered to. It is described in brief hereunder:

a) A request for payment (invoice), approved by the Engineer, is presented to the Satker by the contractor;

b) Head of Work Unit (Satker) checks for conformity and issues a payment request (SPP) to the SPM Verifier / Issuer in the Satker;

c) The SPM Verifier / Issuer checks both the supporting documentation and the adequacy of the unspent budget allocation for that type of expense. If satisfactory, the SPM Verifier / Issuer issues the payment request (SPM) and sends it to the Treasury Office (KPPN);

d) KPPN carries out additional conformity checks and if satisfied issues the payment order (SP2D);

e) The SP2D is then forwarded from KPPN to Bank Indonesia who then transfers funds from the Special Account to the contractor’s nominated bank account;

f) Copies of the SP2D are then provided from KPPN to the appropriate Satker for their records;

g) When payment is made to the contractor, Bank Indonesia notifies KPPN that the transaction is completed.

There are to be no processing fees or fees of any kind charged for any of the above procedures. Steps b, c, and d, noted above, are expected to be completed within 5 working days each. In the case where a step takes more than five days, the PMU will inform IBRD in the Monthly Progress Report explaining in detail where and why the delay(s) have occurred and the likely payment date. Payments eligible for funding from the Special Account are assigned the suffix “RK” on the SP2D and SPM documents. Copies of SP2D-RK are provided to MoF which lists them and attaches the list to a Statement of Expenditure (SOE) which will be submitted to the IBRD for the latter’s own record keeping. If the Loan funds were withdrawn through Special Account, the withdrawal reference serial number is followed by the suffix “PB” (eg. xxx / PB). If the funds were



through “Reimbursement”, “SBUN” is added as suffix to the reference serial number (eg. xxx / SBUN). Direct payments which do not pass through the Special Account will be booked against the Loan account by IBRD directly. The flows of funds and documents are shown in the following figures:

• Figure 1: Foreign exchange payments from the Special Account, • Figure 2: Rupiah payments from the Special Account for contracted

activities, • Figure 3: Rupiah payments from the Special Account fro self-managed

activities, • Figure 4: Direct Payment procedure, • Figure 5: Rupiah payments when Special Account has insufficient funds.

7. PROJECT COST RECORDS AND FINANCIAL MIS For loan-funded projects there are two cost recording systems, operated by GoI and the Lending Agency. They differ both in their objectives and their formats as follows:

1. GoI System – based on SPM and SAI sub-systems, these are part of the overall budgetary control system and will be maintained by each Satker as part of their routine financial recording and reporting activities. Costs are recorded as follows; • Cumulatively only over a single financial, • Expressed in Rupiah, • Booked at the time the SPM / Sp2D is issued, • Cost-coded according to the Government chart of accounts which

are based on type of cost (MAK codes)

2. IBRD System : based on disbursements to borrower. Costs are recorded as follows; • Cumulatively over the whole Loan period, • Expressed in Loan Currency ( i.e. cumulative totals are only in US$,

although individual draw-downs will generally show also the amount in the currency of the payment),

• Based on the Statement of Accounts (SOE) and therefore are not up-to-date with respect to actual expenditures already incurred,

• Cost-coded according to • Loan Cost categories as specified in the Loan Agreement.

Given the above differences, it is essential that the financial records maintained by the Project provide a continuous on-going reconciliation between the GoI records and the IBRD records. Thus the project records must:

a) Show for each Rupiah payment, the equivalent amount in US$ for

reconciliation between GoI records and IBRD records, b) Show cumulative totals which show both annual GoI fiscal year totals

in Rupiah and project life totals in US$



c) List SPM’s recorded by GoI which have not yet been recorded by IBRD because no SOE has been received by IBRD,

d) Reconcile formally the project records of cumulative expenditures in Loan currency and Loan drawdown’s as shown in the IBRD’s loan statements.

The project also needs to monitor commitments through records of each contract including Addenda agreed and pending. The PMM will provide additional information regarding the refinements that will be provided by the PMU / PMUC to ensure consistency and accuracy in the financial reporting. Accurate and up-to-date bookkeeping within the Project’s Management Information System (MIS) is essential not only for record keeping but also for preparing the Financial Monthly Report. It is also a prerequisite, in combination with other technical and administrative data, for good management and progress monitoring by PMU. 8. FOREIGN EXCHANGE TRANSACTIONS It is planned that expenditure under WINRIP will be made in Rupiah via a Special Account even though the IBRD Loan will be US Dollar denominated. Therefore US Dollars will be sold in exchange for Rupiah each time the Special Account is replenished. The Financial Management Plan provides for actual exchange rates to be monitored and also provides a mechanism to continually update the cost of the whole project in US$ by assuming an exchange rate for future transactions. Fluctuations in exchange rates during project implementation have had significant impacts on previous Loan performances; WINRIP is unlikely to prove the exception. In WINRIP preparation, an exchange rate of Rp 9,000 per 1 US$ has been assumed as base case.



Figure 1: Payment Procedure for Foreign Exchange from Special Account

Notes: 1. Invoice from Contractor / Consultant / Supplier to Work Unit 2. Work Unit submits SPM-RK (Payment Request) for foreign exchange to Special KPPN 3. Special KPPN issues SP2D-RK (Payment Order) for the value of the foreign exchange to Central BI4. Central BI transfers funds equal to foreign exchange in SPM5. Central BI reports to the Directorate General of Treasury followed by KPPN issuance of SP2D Approval

7. Replenishment from IBRD to the Special Account in Central BI8. Delivery of Payment Advice

= Flow of funds = Document flow

6. Directorate General of Treasury submits a Replenishment Application based on Central BI Statement and SP2D Approval

WORK UNIT SPECIAL KPPN VI JAKARTA

IBRD

CENTRAL BI SPECIAL ACCOUNT

CONSULTANT / CONTRACTOR /

SUPPLIER

2. Payment Request

1. Invoice

6. Application for Replenishment

3. Payment

Order 5. Notification

8. Payment Advice

7. Replenis

hment4.Transfer

Figure 2: Payment Procedure for Rupiah from Special Account

Notes: 1. Invoice from Contractor / Consultant / Supplier to Work Unit 2. Work Unit sends SPM-LS RK (Payment Request) together with supporting documents 3. KPPN issues SP2D-LS RK (Payment Order) to Branch of BI or Bank Operasional/Bank Persepsi4. Branch of BI transfers funds to accopunt of Contractor/Consultant/Supplier5. Debit advice Note of BI Branch to Central BI

8. Donor makes fund transfer to Special Account in Central BI9. Donor sends Payment Advice to Directorate General of Treasury


6. If sufficient funds in Special Account, Central BI debits Special Account with the US$ equivalent and credits Directorate Generla of Treasury based on the debit note7. Directorate General of Treasury submits to Donor application for replenishment with Withdrawal Application supported by list of SPM/SP2D and Statement of Special Account from BI

Funds sufficient

WORK UNIT KPPN

IBRD

BI BRANCH OFFICE

CONSULTANT / CONTRACTOR /

SUPPLIER

2. Payment Request

1. Invoice

3. Payment

Order

6. Bank State-ment

9. Payment Advice

7. Replenishment ApplicationDIRECTORATE GENERAL OF TREASURY

CENTRAL BI

SPECIAL ACCOUNT

4.Transfer

5.Debit Advice

Insufficient funds see Figure 5

8 Replenishment



Figure 3: Payment Procedure for Revolvong Fund

Notes: 1. Work Unit submits SPM-UP (Advance Payment Request) to KPPN with an Expenditure Plan2. KPPN issues SP2D-UP (Advnace payment Order) debiting the State Cash Account3. BI Branch transfer funds to Work Unit's account (only for UP not GU)4. Work Unit submits SPM-GU (Expenditure Payment Request)

8. BI Central sends Bank Statement to Ditjen of Treasury9. Ditjen of Treasury submits Application of Replenishemnt to Donor10. Donor transfers money to Special Aaccount in BI 11. Donor sends payment advice to Ditjen of Treasury


6. Copy of SP2D along with other documents is sent to Ditjen of Treasury7. BI Branch sends debit advice note to BI Central (only SP2D-GU not UP)

5. KPPN issues SP2D-GU debiting Special Account. On the basis of SP2D-GU, a Payment Order is issued to debit the Special Account.

WORK UNIT KPPN

IBRD

BI BRANCH OFFICE

1. Advance Payment Request (SPM-UP)

8. Bank State-ment

11. Payment Advice

DIRECTORATE GENERAL OF TREASURY

CENTRAL BI

SPECIAL ACCOUNT

6. Copy SP2D-GU

7.Debit Advice

10 Replenishment

4. Expenditure Payment Request (SPM-GU)

2. SP2D-UP

Payment order for advance

5. SP2D-GU

Payment order for

Expenditure

3. Transfer

9. Replenishment Application

Figure 4: Direct Payment Procedure

Notes: 1. Invoice from contractor / consultant / supplier2. Work Unit submits Funds Withdrawal Application to Special KPPN VI Jakarta

4. Donor makes direct transfer to bank account of Contractor . Consultant / Supplier


6. Based on Payment Advice, Special KPPN VI Jakarta issues SP3 (instructions to book transaction) and submits to BI

7. Based on SP3, Central BI records the transaction in Rupiah for BUN's account and sends note to Special KPPN VI Jakarta

5. Donor submits Payment Advice to Special KPPN VI Jakarta with copy to BI.

3. After Special KPPN VI Jakarta investigates the application and supporting documents, then Application is signed by Authorised Representative and sent to IBRD

WORK UNIT SPECIAL KPPN VI JAKARTA

IBRD

2. Application

7. Trans action Note

5. Payment Advice

BANK INDONESIA

5. Copy of Payment Advice

3. Application

CONTRACTOR / CONSULTANT / SUPPLIER

1. Invoice

6. SP3

4. Transfer



Notes: 1. Invoice from Contractor / Consultant / Supplier2. Work Unit sends SPM-LS RK Rupiah (Payment Request) along with supporting documents3. KPPN issues SP2D-LS RK (Payment Order) to Branch of BI or Bank Operasional / Bank Persepsi4. Branch of BI makes the transfer to account of Contractor / Consultant / Supplier

9. Donor sends Payment Advice to Ditjen of Treasury


8. Donor makes reimbursement in Rupiah to Central Gzovernment Account, debits the Loan Account with equivalent US$

Figure 5: Payment Procedure for Rupiah When Special Account has Insufficient Funds

6. If insufficient funds in Special Account, BI will notify Ditjen of Treasury7. DG Treasury prepares application for reimbursement comprising withdrawal application supported by list of SPM/Sp2D denoted "SBUN"

5. BI Branch sends Debit Advice Note to Central BI

WORK UNIT KPPN

IBRD

BI BRANCH OFFICE

2. Payment Request

Bank State-ment

9. Payment Advice

DIRECTORATE GENERAL OF TREASURY

CENTRAL BI

SPECIAL ACCOUNT

6. Payment Documentation

5.Debit Advice

8. Reimbursement

7. Application for Reimbursement

CONTRACTOR / CONSULTANT /

SUPPLIER

1. Invoice3.

Payment Order

4. transfer


Annex 9 Training Program FINAL240212 Page 1 of 5 24/09/2008

ANNEX 9

TRAINING COMPONENT



APPENDIX 9 : TRAINING COMPONENT

1. NEED FOR TRAINING PROGRAM One of the major risks to effective project implementation and management derives from the likelihood that project management staff does not have adequate training in or experience of the management of large-scale projects.

Procedures to mitigate these risks include the need to conduct comprehensive training of staff in all participating entities involved with the procurement, financial management and supervision of the project.

In response to this need, an Annual Training Program has been prepared, which identifies the major training requirements to be addressed. This program builds on previous training programs prepared and implemented by DGH to strengthen management staff and support the implementation of loan programs like WINRIP.

Activity of training will be carried out and supported in CTC contract, including the budget which use provisional sum budgets.

2. OUTLINE OF WINRIP TRAINING PROGRAM

The Annual Training Program to support WINRIP will include intensive courses and refresher training and workshops, highlighting new and poorly-understood aspects of the procedures and safeguards. It includes a limited range of technical topics, other than environmental management.

The Training Program includes the following components, summarized and described below:

1. Procurement Training : For the Procurement Working Groupd Committees (POKJA) of each entity.

2. Training in Project Management : Annual course for prospective key staff.

3. Refresher Training in Project Management : Annual refresher course for key staff of project units.

4. Project Management Manual (PMM) Training : Initial training / annual refresher training in use of PMM.

5. Training in Reporting for FMR : Initial training / subsequent refresher training in the details of monthly financial and other reporting requirements for FMR and other financial management aspects of the project.

6. Environmental Workshop : Annual workshops to disseminate environmental management and monitoring procedures to contractors, consultants and key project staff.

7. Training in Treasury (Brevet A) : Annual training for financial staff of project units.



8. Works Planning and Programming : Annual workshop to prepare and update 3 year rolling programs of civil works.

9. Workshop on Road Safety Audit

2.1. PROCUREMENT TRAINING COMPONENT

2.1.1. Purpose of Training

To make sure that members of Procurements Committees in each participating entity are fully familiar with requirements of Perpres 54/2010 and WB Procurement Guidelines, plus provisions of PMM regarding procurement (including the Anti-Corruption Action Plan, ACAP).

The intention is to provide in-depth training once a year, before the main tendering activity, and timed to ensure that this is not delayed..

For WP 1, the first training session will be organized by PMU/PPC, and will be held soon after completion of the WINRIP Loan Agreement, after the PMU and Procurement Committees for AWP 1 have been established.

2.1.2. Who Receives Training Procurement training is intended to more particularly for members of Procurement Committees.:

.

2.2. TRAINING IN PROJECT MANAGEMENT

Head of Work Units, Commitment Officers and Treasure in the project administrative units (Satker) at National / Provincial level are required to have attended a special training program before being appointed.

2.2.1. Purpose of Training To train candidates for future appointments as key project staff in all aspects of project management.

2.2.2. Who Receives Training Prospective key staff (Heads of Work Units, Commitment Officers and Treasury) who do not yet have a certificate in project management. The candidates will be selected from officials of the public works agencies in the 3 / 4 provinces with WINRIP Subprojects.

.



2.3. REFRESHER TRAINING IN PROJECT MANAGEMENT

2.3.1. Purpose of Training To give staff currently occupying key position in Work Units a brief updating in latest developments in project management.

2.3.2. Who Receives Training Key staff (Heads of Work Units, Commitment Officers and Treasurers) should receive training.

.

2.4. PROJECT MANAGEMENT MANUAL (PMM) DISSEMINATION

2.4.1. Purpose of Training To introduce related implementation staff to the provisions of the PMM, and the need to properly and fully observe these during WINRIP project implementation.

2.4.2. Who Receives Training All groups participating in project implementation should be included in the audience addressed by this component..

2.5. TRAINING IN REPORTING FOR FINANCIAL MANAGEMENT REPORT

2.5.1. Purpose of Training To provide staff at project level with training in the preparation and submission of monthly reports on disbursements, procurement activities and project progress.

2.5.2. Who Receives Training Staff to receive this training will include but not limited

• Staff of the units involved in recording and reporting project performance information of each project (2 persons per project)

• Kepala Bagian Keuangan in each Province (2 per entity)

.

2.6. ENVIRONMENTAL MANAGEMENT WORKSHOPS

2.6.1. Purpose of Training The training is intended to provide staff and consultants with information on the Environmental Special Clauses in works contracts and to enhance their awareness of their responsibilities both under the project and in the wider context of all works implementation.

.



2.7. TRAINING IN TREASURY MANAGEMENT

2.7.1. Purpose of Training To provide staff currently occupying key financial positions in Work Units with full understanding of financial record keeping and compliance with Ministry of Finance and Treasury standards and procedures.

2.7.2. Who Receives Training Training will target key financial staff (Treasurers, SPM Issuing Officers, and Accountants).

.

2.8. TRAINING IN WORKS PROGRAMMING

2.8.1. Purpose of Training The aim of this training will be to train staff in implementing an annual procedure for preparing Three-year Rolling Programs and budgets for works implementation, design, supervision and administration which are supported by regional agencies.

2.8.2. Who Receives Training The staff of West Sumatra Balai and provincial Satker, Bappeda, Sekwilda and Bapedalda



ANNEX 9

TRAINING COMPONENT



APPENDIX 9 : TRAINING COMPONENT

1. NEED FOR TRAINING PROGRAM One of the major risks to effective project implementation and management derives from the likelihood that project management staff does not have adequate training in or experience of the management of large-scale projects.

Procedures to mitigate these risks include the need to conduct comprehensive training of staff in all participating entities involved with the procurement, financial management and supervision of the project.

In response to this need, an Annual Training Program has been prepared, which identifies the major training requirements to be addressed. This program builds on previous training programs prepared and implemented by DGH to strengthen management staff and support the implementation of loan programs like WINRIP.

Activity of training will be carried out and supported in CTC contract, including the budget which use provisional sum budgets.

2. OUTLINE OF WINRIP TRAINING PROGRAM

The Annual Training Program to support WINRIP will include intensive courses and refresher training and workshops, highlighting new and poorly-understood aspects of the procedures and safeguards. It includes a limited range of technical topics, other than environmental management.

The Training Program includes the following components, summarized and described below:

1. Procurement Training : For the Procurement Working Groupd Committees (POKJA) of each entity.

2. Training in Project Management : Annual course for prospective key staff.

3. Refresher Training in Project Management : Annual refresher course for key staff of project units.

4. Project Management Manual (PMM) Training : Initial training / annual refresher training in use of PMM.

5. Training in Reporting for FMR : Initial training / subsequent refresher training in the details of monthly financial and other reporting requirements for FMR and other financial management aspects of the project.

6. Environmental Workshop : Annual workshops to disseminate environmental management and monitoring procedures to contractors, consultants and key project staff.

7. Training in Treasury (Brevet A) : Annual training for financial staff of project units.



8. Works Planning and Programming : Annual workshop to prepare and update 3 year rolling programs of civil works.

9. Workshop on Road Safety Audit

2.1. PROCUREMENT TRAINING COMPONENT

2.1.1. Purpose of Training

To make sure that members of Procurements Committees in each participating entity are fully familiar with requirements of Perpres 54/2010 and WB Procurement Guidelines, plus provisions of PMM regarding procurement (including the Anti-Corruption Action Plan, ACAP).

The intention is to provide in-depth training once a year, before the main tendering activity, and timed to ensure that this is not delayed..

For WP 1, the first training session will be organized by PMU/PPC, and will be held soon after completion of the WINRIP Loan Agreement, after the PMU and Procurement Committees for AWP 1 have been established.

2.1.2. Who Receives Training Procurement training is intended to more particularly for members of Procurement Committees.:

.

2.2. TRAINING IN PROJECT MANAGEMENT

Head of Work Units, Commitment Officers and Treasure in the project administrative units (Satker) at National / Provincial level are required to have attended a special training program before being appointed.

2.2.1. Purpose of Training To train candidates for future appointments as key project staff in all aspects of project management.

2.2.2. Who Receives Training Prospective key staff (Heads of Work Units, Commitment Officers and Treasury) who do not yet have a certificate in project management. The candidates will be selected from officials of the public works agencies in the 3 / 4 provinces with WINRIP Subprojects.

.



2.3. REFRESHER TRAINING IN PROJECT MANAGEMENT

2.3.1. Purpose of Training To give staff currently occupying key position in Work Units a brief updating in latest developments in project management.

2.3.2. Who Receives Training Key staff (Heads of Work Units, Commitment Officers and Treasurers) should receive training.

.

2.4. PROJECT MANAGEMENT MANUAL (PMM) DISSEMINATION

2.4.1. Purpose of Training To introduce related implementation staff to the provisions of the PMM, and the need to properly and fully observe these during WINRIP project implementation.

2.4.2. Who Receives Training All groups participating in project implementation should be included in the audience addressed by this component..

2.5. TRAINING IN REPORTING FOR FINANCIAL MANAGEMENT REPORT

2.5.1. Purpose of Training To provide staff at project level with training in the preparation and submission of monthly reports on disbursements, procurement activities and project progress.

2.5.2. Who Receives Training Staff to receive this training will include but not limited

• Staff of the units involved in recording and reporting project performance information of each project (2 persons per project)

• Kepala Bagian Keuangan in each Province (2 per entity)

.

2.6. ENVIRONMENTAL MANAGEMENT WORKSHOPS

2.6.1. Purpose of Training The training is intended to provide staff and consultants with information on the Environmental Special Clauses in works contracts and to enhance their awareness of their responsibilities both under the project and in the wider context of all works implementation.

.



2.7. TRAINING IN TREASURY MANAGEMENT

2.7.1. Purpose of Training To provide staff currently occupying key financial positions in Work Units with full understanding of financial record keeping and compliance with Ministry of Finance and Treasury standards and procedures.

2.7.2. Who Receives Training Training will target key financial staff (Treasurers, SPM Issuing Officers, and Accountants).

.

2.8. TRAINING IN WORKS PROGRAMMING

2.8.1. Purpose of Training The aim of this training will be to train staff in implementing an annual procedure for preparing Three-year Rolling Programs and budgets for works implementation, design, supervision and administration which are supported by regional agencies.

2.8.2. Who Receives Training The staff of West Sumatra Balai and provincial Satker, Bappeda, Sekwilda and Bapedalda


ANNEX 10 RiskMa_FINAL 240212 Page 1 of 4 9/18/2012

ANNEX 10

RISK MANAGEMENT



APPENDIX 10 : RISK MANAGEMENT

Events rarely turn out as predicted. The WINRIP implementation plan (PIP) is based on a set of assumptions regarding the future which will likely not prove to be entirely accurate and therefore impact on Project progress and satisfactory fulfillment. It is prudent, therefore, to assess the scope of the risks attending implementation, measure their likely probability of occurrence and the significance of their potential impact. By this means checks can be incorporated into the management of the Project to minimize the threat from those risks which would have a negative impact on implementation and maximize the impact of risks (opportunities) which would have a positive impact. The table on the following pages attempts to identify the risks (and opportunities), their likelihood of occurrence, the significance of their impact and the measures proposed to minimize the threat, or minimize the negative impacts, and maximize the positive impacts from opportunities to enhance the Project’s outputs. The agencies responsible for risk management are also shown.



Annex 10: Full Operational Risk Assessment Framework (ORAF) - Negotiation and Board Package Version1 Project Development Objective(s)

Description: The Project Development Objective (PDO) is to increase the effective use of national roads along the Western Sumatra Corridor by reducing road user costs.

PDO Level Results Indicators:

1. Average passenger travel times reduced by at least 20% on project roads. 2. Average vehicle operating cost for a typical car, bus and heavy truck reduced by at least 5%, 8%, and 10% respectively, on project

roads. 3. Increase of AADT on project road sections as per forecast

Risk Category Risk Rating Risk Description Proposed Mitigation Measures

Project Stakeholder Risks L

The Borrower, NGOs, residents in the project areas, or other donors may object to the project.

Implementing Agency Risks

H

Under staffing in PMU and insufficient coordination within the IA. Lack of familiarity with Bank procurement and FM requirements on the part of staff assigned for such work, in particular members of the Procurement Committees.

DGH has recently established a Sub-Directorate dedicated to the preparation and implementation of projects financed by donors and will be the PMU. Project preparation consultants (PPC), project management consultants (Core Team Consultants, CTC) and Design and Supervision Consultants (DSC) will support the PMU and PIUs. MPW is currentely establishing Procurement Services Units, ULPs, at central and Balai levels and enhancing the use of the e-tendering system. An Anti-Corruption Action Plan (ACAP), building on lessons from past and ongoing Bank supported projects, will be adopted for the project.

1 This is the version that should be used for Negotiations and submission for Board Approval



Risk Category Risk

Rating Risk Description Proposed Mitigation Measures

Project Risks

• Design

MI

Quality of design of the first year program. Detailed designs for the first year program prepared by the PPC. Bank review of first year program designs. CTC support for the designs of the second and third year programs.

• Social & Environmental

ML

Land acquisition and resettlement process may prove to be difficult and could delay civil works.

Government has confirmed that it will allocate appropriate budget for land acquisition and resettlement. Environmental management and monitoring will be included in bid documents and contracts. Adequate safeguards staff will be included in the PMU/PIUs, and in the CTC and the DSC. Bank will supervise implementation of safeguards on a regular basis.

• Program & Donor L

This is a stand-alone project and is not dependent on other donors' activities.

• Delivery Quality

MI

Weak contract management and quality monitoring.

Project area roads are exposed to earthquake related disasters, e.g., landslides, pavement damage, bridge collapse.

CTC will enhance project management processes, including construction management, monitoring and evaluation.

Detailed designs will include mitigation of seismic risks. The Project includes a disaster risk response component.

Risk Rating at Preparation

Overall Risk Rating during Implementation

Comments

MI MI

This project is similar to past and on-going projects with a reasonably well-performing IA. Project design has been enhanced, based on experience; in particular through the ACAP The Bank team will provide implementation support both through formal missions and on an on-going basis through country office based staff, especially on fiduciary and safeguards matters.

1

ANNEX 11

ANTI-CORRUPTION ACTION PLAN

ANNEX 11 : ANTI-CORRUPTION ACTION PLAN

1. The objective of this WINRIP Anti-Corruption Action Plan (ACAP) is to identify governance risks and mitigation measures beyond the standard control systems employed in the past projects. This Action Plan (i) maps potential governance risks; and (ii) presents program activities to address these risks in the form of an Action Plan led by the implementing agency (DGH) and supported by the government systems. It also complies with the World Bank Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grant, October 2006. 2. Lessons Learned. The Plan draws lessons from previous road sector projects, namely SRIP and EIRTP 1 and 2, to strengthen and improve the effectiveness of the measures employed to mitigate project related governance risks.

i. The ACAPs in the past projects focused on mitigating collusion risks by directly imposing conditions in the procurement process, such as hiring of a procurement agent (for consultancy services) and procurement advisors (for civil works), and prohibition of pre-qualification to reduce opportunities for bidders to know who will be bidding. In practice, however, many of these conditions impeded the progress of project implementation, while their intended effect was limited. For example, in most of the large bidding cases in Indonesia the bidders know other participants anyway. Thus, prohibition of pre-qualification did not serve its original purpose, while post qualification for large contracts caused serious delays in the evaluation process, along with speculations of biased interpretation of qualifications. In contrast, a well established complaints handling mechanism should be effective against collusion risks since most past collusion cases were whistle-blown by competitors who were not involved in the collusion. Monitoring of this process could in turn be strengthened by more closely tracking signs of manipulation in the submitted bids, e.g., through unit price analysis and review of bid securities by the Core Team Consultant (CTC).

ii. Past experience also indicates that enhanced transparency and oversight can effectively contribute to governance improvements. Greater inclusion of civil society likely enhances project management, and reduces the risk of civil society misunderstanding of the scope and objectives of the project. The project management can also benefit from the civil society as an informed but objective source of information. In recent projects, this has been accomplished by a combination of (i) sound disclosure policy, (ii) independent oversight, (iii) improved monitoring through an Information Management System, (iv) stringent auditing, and (v) a well established complaints handling mechanism. These measures have improved the transparency of the project implementation and management. It has enhanced the civil society’s interest to these public works, and it has led to a more attentive project management approach by the implementing agency. Good practices and additional oversight, such as the use of Community Representative Observers (CROs) in the bid opening processes and Third Party Monitoring (TPM) during construction, will thus be sustained and used to complement technical and financial audits of the project. Additional effort, however, needs to be made to energize and expand civil society oversight, especially in remote

3

areas by advertisement and follow-up training. In so doing TPM interests will be enhanced by properly bearing necessary costs and expenses such as their report production, which was not covered by the project budget before. With these improvements, it is expected that civil society oversight can be made more effective than before.

3. Action Plan Principles. The following provides principles of the Action Plan:

i. Improved Effectiveness of Procurement Procedures within Ministry of Public Works. Procurement process remains one of the highest governance concerns. Procurement of the expected 21 contracts will be undertaken by the Ministry of Public Works, either in Jakarta or in the relevant provinces. The plan is thus formulated based on the centralized model allowing better monitoring and quality. The following procurement packages are expected:

• 15 ICB and 6 NCB works contracts; • Five consultancy services contracts including for Core Team Consultant and

Design and Supervision Consultants. • One goods contract.

The Ministry of Public Works will enhance the procurement implementation and monitoring with the following schemes:

• Semi E-tendering on the MPW official public website for both works and consultant services contracts. The official website, www.pu.go.id will publish key information related to WINRIP which includes: invitation for bids, download of bidding documents, bid clarifications, minutes of bid opening, and information of bid award. (Notes: Other requirements can be added after no objection from the Bank.)

• Establish criteria for nominating procurement committees; • No rebids: no sub project is eligible for financing should there be a need for a

rebid due to corruption and/or collusion.

ii. Enhancement of the MPW IT based National Road Project Monitoring System. Following recommendations resulted from a study on the National Road Monitoring System conducted by the KPK in 2009, DGH agreed to implement a set of DG-wide corruption prevention action plans. The agreement took the form of formal letter signed by the DG to the KPK numbered UM.01.11-Db/893 dated November 26, 2009. The action plan comprises 17 areas, grouped into institutional, human resources and processes. The plan was publicly communicated at the end of April 2010, through a seminar supported by the Bank whereby the DG presented the plan, followed by KPK’s views and commitment declared by the Vice Minister of Public Works to implement the plan. One of the actions relevant to this ACAP is to enhance the usage of the Ministry’s IT system (Integrated SiPP1) to monitor financial, technical and physical progresses of

1 SiPP or Sistem Pemantauan Proyek (Project Monitoring System) compiles and presents managerial reports such as contract scheduling, payment, and issues reported or complaints generated from projects. In the future the system will be integrated with Simpajatan or Sistem Pengawasan Jalan dan Jembatan (System for Roads and Bridges Monitoring), a system which monitors technical progress, to allow better integration of information for managers and policy makers.

http://www.pu.go.id/

national road projects through website. This action is aimed at developing a system to enable project supervision and monitoring which is publicly accessible. Once in place (the IT integration is scheduled to be completed at the end of 2011)2, the system will enable the MPW management to better access information on road projects in timely manner, and information will be available to external stakeholders. This is expected to significantly improve project managerial performance. This system will also allow civil society organizations (such as academia, media, professional associations) to participate in the monitoring of national road projects.

The IT based integrated monitoring system will be implemented on a pilot basis by selecting two national road projects from every province. The MPW has agreed with the Bank to include WINRIP as part of the pilot program. The implementation of aforementioned action plan will be monitored by the KPK, following a formal request from DGH seeking KPK’s support in supervising national projects, particularly WINRIP to identify the governance risks, fraud, collusion, coercion or obstruction.

iii. Enhanced Disclosure Provisions and Transparency. The MPW will provide necessary information in the PIP, PMM on its website, and in the bidding documents, such as contact point for complaint (mail and email address, phone, fax, text message). The contact will also include the Bank’s Fraud and Corruption Hotline. The MPW will hold Annual Accountability Meetings to enhance accountability and project information sharing with civil society. The PMM will provide guidelines on disclosure of information related to the project. MPW official website will display critical information on WINRIP, to enhance both internal and external monitoring of the project:

• Work Plan and Procurement Plan; • Quarterly newsletter containing information on the list of contracts,

implementation progress, project related activities, number, types and status of complaints in each location. The newsletter will also be made available to civil society in both hardcopy or through electronic mailing system;

• Mid-Term Review Report, promptly after completion of the mid-term review implementation support is carried out in accordance with the loan agreement;

• All final audit reports (financial or otherwise, including qualified audit reports) prepared in accordance with the loan agreement and all formal responses of the government in relation to such reports. The publication should be done within one month after the report is accepted as final.

• Contracts awarded with information on general scope of work (with location), value, and summary information of the awarded firms/contractors. The practice in other projects demonstrates that disclosure of contracts awarded will help in reducing fraudulent practices.

iv. Civil Society Participation in Oversight. MPW will actively encourage representatives of civil society groups to attend public bid openings (and sign attendance list at the opening), and other key procurement steps. A contact database will be

2 The deadline for the submission of proposals was February 24th, 2011 and DGH has received 35 bids and is currently proceeding with the bid evaluation. The Consultant work will be completed by the last quarter of 2011.

5

maintained if interviews are required to acquire better information of some observations. The selection of CRO and TPM in the past projects was based on local interests. The CROs were mostly local university staff, and the TPMs were knowledgeable persons hired by the selected NGO. The CROs are required to submit a report on their bid process observations, and the TPMs are required to independently monitor the progress of the implementation of each package. The Guidelines on the selection and role of observers will be provided in the PMM, including the past best practice. For example, the past exemplary CRO reports will be referred to for the new CROs. The MPW website will display, for each package, the value of contract awarded, name of contractor, location, scope of contract, and will have regularly updated pictures of works being performed. The web-based reporting system will also generate public voluntary oversight of the project. MPW will arrange meetings with universities particularly civil engineering faculties to encourage them to participate in overseeing the national road projects at least through website.

v. Complaints Handling Mechanism. A complaints handling mechanism will be enhanced by the MPW. The mechanism will include provision for recording, referral, and follow up investigations of substantial complaints by the Inspectorate General, or third party audit to ensure independency and reliability. All complaints received will be acknowledged to the complainant within 7 days of receipt, with a copy to the Bank. Bid-related complaints received during bid evaluation period will be responded after the contract award. Strict procedures to ensure anonymity of informants will be enforced. Tracking of the status of investigations and measures taken will be reported on quarterly basis. Complaints deemed possible serious infringements may be further investigated by the Bank. Through its anti-corruption hotline and complaints which can directly be made online to the Integrity Vice-Presidency (INT). vi. Sanctions & Remedies. Clear sanctions and remedies are an important final step in the effort to fight against corruption. This Project has zero tolerance for corruption. Any person (government, non-government, consultant, facilitator, contractor etc.) can be sanctioned if sufficient evidence is available. In all procurement and consultant contracts, evidence of corruption, fraud, collusion, coercion and obstruction will result in termination of the relevant contract, possibly with additional penalties imposed (such as fines, blacklisting, etc.) in accordance with the Bank and Government regulations. The Government will exercise its contractual remedies, and the Bank’s disbursement to any given contract can be suspended or stopped completely if cases of fraud and corruption are not dealt with effectively.

4. Corruption Risk Mapping Matrix and Actions. Limiting the governance risks in this project starts with identifying potential risk areas called a corruption risk mapping. The exercise maps potentials of governance risks and assesses the corresponding level of risk. Based on the identified risk levels, a set of mitigation actions is formulated. The Corruption Risk Mapping Matrix is presented at the end of this Annex in Table A8.1. The WINRIP ACAP presented in the Corruption Risk Mapping Matrix is based on the above principles and the experience in the sector over the recent years. The main areas of actions are stated below.

A. Enhanced Disclosure and Transparency B. Enhanced Civil Society Oversight C. Enhanced Complaints Handling Mechanism D. Mitigation of Collusion, Forgery and Fraud Risks E. Sanctions and Remed

WINRIP – ANTI-CORRUPTION ACTION PLAN

annex 11 acap_final 240211 Page 7 of 11 11/7/2010

Table A8.1: Corruption Mapping Matrix

Risk Area Level of Risk

Opportunity for weak Governance Mitigation Actions

Enhanced Disclosure and Transparency

Medium

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

1. MPW will provide the contact information for complaints related to WINRIP in the PIP, PMM, MPW website and in the bidding documents.

2. Each work program (WP-1, 2 and 3) and the Procurement Plan will be published on the official website of MPW and made available to the public as a part of the public disclosure policy of the project. The Procurement Plan will be updated annually.

3. MPW will publish a quarterly newsletter on the official website of MPW including information concerning the list of contracts, implementation progress, project-related workshops and the number, typology and status of complaints. MPW will send the quarterly newsletter to the civil society forum in each project province in hardcopy or through an electric mailing system.

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

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

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

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

Enhanced Medium Lack of external 8. MPW will actively encourage representatives of civil society groups to attend the public bid






Civil Society Oversight

oversight leads to less demand for project accountability.

openings and other key procurement steps. Community Representative Observers (CROs) will be invited from local universities or other selected independent institutions, and will sign the attendance list for the procurement/selection process. Guidelines on appropriate procedures will be provided in the PMM.

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

10. MPW will hold Annual Accountability Meetings to enhance accountability and sharing of project information. The first of these meetings will be held at the province level before procurement of contractors or service providers, so that any civil society and community representatives can be selected in a transparent manner. The agenda of each meeting will be widely distributed among interest parties.

Enhanced Complaints Handling Mechanism

Medium

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

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

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

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

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

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

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

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




Mitigating Collusion, Forgery and Fraud Risks

High

From the past records, there are high risks of collusion, kickbacks and bribes, overpayment and poor delivery of contracts.

12. MPW will use the “Semi E-Tendering” on the MPW official public website for both works and consultant services. The official website (www.pu.go.id) will publish key information related to WINRIP which includes; (a) invitation for bids, (b) download of bidding documents, (c) bid clarifications, (d) minutes of bid opening, (e) information of contract award. Other requirements can be added after no objection from the Bank.

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

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

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

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

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

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

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

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

Sanctions and Remedies Medium

Weak Sanctions and Remedies does not prevent future corruption

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

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

http://www.pu.go.id/






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

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

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

weeksWINRIP PROJECT PREPARATION Jan09 Dec10 24

Initial Project Screening Jan09 Mar09 15Feasibility Studies Mar09 Oct09 8Environmental Screening Mar09 Dec09 10Draft PIP, PMM and ACAP Nov.09 Dec.10 14WP-1 Final Engineering Design Jul09 Aug.10 2WP-1 Approvals from BinTek May10 Dec.10 8

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

LOAN PREPARATION PERIOD Feb.11 Dec.11 44PROJECT LOAN AGREEMENT Feb.11 Dec.11 44

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

INITIATE WP-1 PROCUREMENT Jan.11 Aug.12 80Establish PPU and PMU Jan.11 Feb 12 56 ç çEstablish Procurement Committees Nov 11 Des.11 8WP-1 tendering and award Des11 Aug.12 36

PROCURE IMPLEMENTATION SUPPORT July11 July12 52Prepare EOIs for CTC, DSC and other TA as necessary May11 July11 12EOI period July11 Aug.12 56 çSelection CTC/DSC July11 July12 52 ç ç ç ç ç ç ç ç ç

weeksLOAN PERIODPROCURE IMPLEMENTATION SUPPORT July11 June16 260

Mobilize consultants (CTC and DSC) July12 June17 260WP-2/3 PROJECT PREPARATION July11 Dec14 182

Completion of WP-1 tendering Dec11 Aug12 36WP-2/3 AMDAL and land acquisition Jul11 Dec.14 182WP-2 designs Sept12 Apr13 32WP-3 designs Mar13 Sep13 28

WP-2/3 PROCUREMENT Mar13 Apr14 56WP-2 Approvals, NOLs, tendering and award Mar13 Oct13 32WP-3 Approvals, NOLs, tendering and award Jun13 Apr14 44

WINRIP IMPLEMENTATION Sep12 Mar16 186WP-1 implementation Oct12 Sep14 96WP-2 implementation Des13 Des15 96WP-3 implementation May14 Jun16 96 LCD

effective date March 2012, Loan Clossing Date December 2017

S O N D

2017

J F M A J J A S O N DJ F M A J J

Apr May Jun

Nov

J A S O N D O NJ

Oct Nov Dec

2016

A

Nov Dec Jan Feb Mar

ANNEX 12 : WINRIP PROJECT PREPARATION AND IMPLEMENTATION SCHEDULE

PROJECT PREPARATION Start Finish DurationJan Feb Mar Apr May Jun Jul Aug Sep Oct Jul Aug Sep

LOAN PREPARATION Start Finish Duration 2011

Jan Feb March April May

J

Dec

PROJECT IMPLEMENTATION Start Finish Duration 2011 2012 2013 2014 2015

June July August Sept Oct

J F M A M JJ A MS O N D J F M A M J A S O N D J F M J DJ F M A J

2009 2010

J A SJ A S O N DJ F M A MA