Afg Sa

Supplementary Appendix A
OUTLINE TERMS OF REFERENCE FOR CONSULTANTS I. Design Review and Supervision Consulting Services A. Background and Objective
1. The Government of Afghanistan will construct about 80 km long Hairatan to Mazar-eSharif railway line (the Project), financed by the Asian Development Bank (ADB). It forms part of transport corridors 3 and 6 of Central Asia Regional Economic Cooperation (CAREC), connecting Central Asia to South Asia, the Caucasus, and the Middle East. The Project is a government priority and consistent with its Railway Development Plan for Afghanistan. A railway line from Hairatan to Mazar-e-Sharif will (i) improve links between Afghanistan and neighboring countries, and (ii) develop an integrated transport network that caters for different cargo. At a later stage, the railway network will be extended to Herat in the west and Tajikistan in the east. The Ministry of Public Works is the Executing Agency (EA) for the Project. 2. A firm of international consultants in association with the national consultants will be engaged under the Project to assist with the detailed design review, approval, procurement activities, construction supervision and monitoring the project implementation as per the specifications and the completion schedule. The duration of the construction project is estimated 12 months and about 6 months will be required for operational testing and trial running of the railway system. The consulting firm will be engaged according to ADB's Guidelines on the Use of Consultants. The detailed tasks and the consultants' team composition are described below. 3. The construction contract is a design-built contract and will require detailed design review and approval by the supervision consultants. The consultants will ensure that procurement of civil works and material under the Project are undertaken efficiently, in best practices, and in compliance with ADB's Guidelines for Procurement and the specifications. The international consultants should also ensure the on-the-job training to transfer technical know-how, engineering, and project management experience to the EA's project staff. 4. The Project TA consultants are preparing the preliminary design of the permanent way, track, rails, signaling, telecommunications, rolling stock, fittings and terminal facilities. The TA consultants have identified one section from Hairatan to Mazar-e-Sharif for procurement. The design-built contract will be procured following ADB's Procurement Guidelines. 5. In general, the construction works to be implemented under the civil work contract for estimated 12 months for the upgrading of the railway station and yard in Hairatan, the track from Hairatan to a suitable location near the Mazar-e-Sharif airport (about 80 km) (where transshipment terminal is being planned), and transshipment terminal including a junction arrangement will comprise: (i) subgrade earth and stone works including side slopes stabilization, strengthening and protection, retaining wall and the drainage of the road embankment and cutting; bridge and culvert works and their associated subworks; railway track works including rail pre-assembly, laying track and switches, ballasting and tamping for all main lines and station lines; station yard works including freight yard and special lines, platforms, stores, station building and passenger and freight transport facilities, and access roads to stations and transshipment terminal;
(ii) (iii) (iv)
(v) (vi) (vii) B.
installation of signaling and telecommunication facilities; preparation for oil powered railway system and electric power supply for works, and facilities; water supply and drainage works. Scope of the Services
6. The services to be provided by the consulting firm will be, but not limited to, the following two phases: 1. Design Review, Procurement, and Construction Supervision Phase a. (i) Preliminary Activities review preliminary design and estimated costs prepared by the TA consultants and identify major deficiencies that should be incorporated in the detailed design, including rolling stock, signaling, telecommunications, station, platform, and other facilities required for full railway system operations; review, comment, and approve detailed design and costs of the Project prepared by the contractor, including rolling stock, signaling, telecommunications, station, platform, and other facilities complete before initiating works at the site (this activity of design and approval will be in parts by the contractor to enable the contractor to initiate physical work activities at the site simultaneously); conduct environmental and social surveys of the site, review and update environmental plans, initial environmental examination/environmental impact assessments as required; collect baseline data and information for benefit monitoring during implementation and after project completion as required in the project documents; update land acquisition and resettlements plans and follow up timely implementation with the EA and other agencies as required. Procurement and Construction Supervision Activities administer contract (including management of performance securities, return of bid bonds, advance payments); monitor materials and equipment delivery program and schedules; inspect goods, materials, equipment, and machinery upon delivery to ensure compliance with specifications and issue immediate notices of any deficiencies found or non-compliance and certify completeness; at all stages, ensure compliance of ADB's Procurement Guidelines for procurement of works, materials, and services by the contractor. Also ensure that the national regulations, specifications, relevant international engineering standards are fully followed as applicable; review, recommend, and approve rolling stock equipment; review, recommend, and approve signaling and telecommunication equipment and installations;
(ii)
(iii)
(iv)
(v)
b. (i) (ii) (iii)
(iv)
(v) (vi)
(vii)
review and approve unit rates where required to implement the works at the required quality control standards; (viii) review the contractor's quality control program; (ix) develop guidelines for the project performance and monitoring system and implement it after ADB's approval; (x) supervise the contractor's manpower, plant and equipment availability schedule; (xi) monitor timely delivery of materials at the site, as scheduled; (xii) ensure supply of spare parts, equipment warranties and supply of user's manuals by the suppliers/manufacturers; (xiii) advise necessary changes in the plans or specifications; (xiv) assist the EA to review and justify extra work and time extension claims of the contractor and submit to ADB with recommendations and documentation; (xv) assisting the EA to scrutinize withdrawal applications of the contractor and recommend to provisional payments; (xvi) Liaison with ADB and other relevant bodies; (xvii) prepare project accounts and financial statements in accordance with the Grant Agreement and Project documents; and (xviii) prepare monthly and quarterly progress reports; (xix) after project completion, collect data and information and prepare project completion report; (xx) inspect the works completed and certify for payment (xxi) participate in the sample collection and laboratory testing along with the contractor representative c. (i) (ii) (iii) On-the-Job Training Assistance review and ensure contractor's commitment to training of the EA staff, commissioning of the equipment; train in the procedures for international procurement following ADB's Procurement Guidelines; train in project management skills; field supervision, material testing and quality control aspects; compliance review for environmental impacts and mitigation; compliance review of land acquisition and resettlement plans; and baseline surveys and benefit monitoring.
2.
Constructed Facilities: Testing and Trial Running Phase (i) review and certify completion of construction of civil works, installation of equipment and machinery, including signaling and telecommunications before initiating testing and trail running; ensure commissioning of all machinery and parts, test and run railway trial as per the operations manuals and manufacturer's recommendations; arrange issuance of safety certification for railway undertakings and safety authorizations for infrastructure managers. The safety certificate comprises two parts: one for railway operations (including verification of compliance of railway infrastructure, railway vehicles, railway traffic sequencing); and the other for the
(ii)
(iii)
(iv)
(v) (vi)
safety management system in compliance with the applicable regulations; considering the importance of operation and maintenance of railway systems, ensure the uptimes of the railway are systematic, and outline predefined criteria for structural, functional and safety requirements; outline threshold for the needs for replacements of parts, software, and hardware; carry out necessary safety reviews and inspections necessary to run the railway operations smoothly and maintenance of the system.
7. The consultants will provide additional services related to the Project based on agreed rates and upon request and approval of the EA. Such additional services will be subject to prior approval by ADB. C. Required Expertise
8. Approximately 100 person-months of international and 100 person-months of national plus regional consultants will be required to accomplish the required tasks. Exact personmonths for consultants' services will be decided during contract negotiations. The consultants will have expertise in design review of the project components; procurement; and contract administration based on "Uzbekistan gauge" design specifications, construction supervision, quality control and monitoring; environmental and social aspects including land acquisition and resettlement; engineering (various disciplines). Brief terms of reference of the specialist consultants are mentioned below. The consultants will arrange translation and interpretation services required. D. 9. Submission of Reports
The consultant will submit two copies each of the following reports to ADB and the EA: (i) a brief monthly report highlighting the progress made and main developments during the month reported, and the problems that need to be brought to ADB's attention, should be faxed to ADB by the third week of every month; a detailed quarterly progress report should cover all aspects of the services and the Project, covering the progress made during the quarter and on a cumulative basis, program of work for the next quarter, difficulties encountered and assistance needed, if any; a final report that will summarize all consulting activities and their results on completion of services. Facilities
(ii)
(iii)
E.
10. Offices, laboratories, transportation, and accommodation for the consultants' full time and short time international and national staff, and the counterparts (all furnished and equipped, together with appropriate services, and maintenance) for the Project will be provided through the civil works contract.
F.
International Staff
11. The Team Leader will be responsible for coordination among all international and national experts, their availability and performance to supervise and monitor contractor's works, reporting. He will have overall responsibility for monitoring all three phases defined above to ensure that the contractors/suppliers complete work on time and within budget following correct quality and safety standards and best practices. All the international and national specialists will report to the Team Leader. (i) Team Leader/Resident Railway Engineer (18 person-months). A graduate degree in civil or railway operations engineering with adequate relevant experience of railway construction projects including design. Be fluent in English and have strong management and communications skills. Procurement Specialist (5 person-months). A degree in civil engineering with adequate experience of procurement of goods and services for railway projects and familiar with ADB's Procurement Guidelines, FIDIC, and other related contracting conditions. a. Major involvement in Phase 1: (i) Railway Engineer (Track Works) (9 person-months). A graduate degree in civil engineering and concrete technology with adequate experience of railway design and construction. Soil Engineer (Geologic) (4 person-months). A graduate degree in civil engineering with adequate relevant experience. Bridges and Culverts Engineer (3 person-months). A graduate degree in civil- structural design engineering with adequate relevant experience. Civil Engineer for Building and Station Facility Specialist (11 person-months). A graduate degree in civil engineering with adequate relevant experience. Architect (2 person-months). A graduate degree in architecture with adequate relevant experience. Environmental Specialist (4 person-months). A graduate degree in environment with adequate relevant experience. Land Acquisition and Resettlement Specialist (4 personmonths). A graduate degree in social development with adequate relevant experience.
(ii)
(ii) (iii)
(iv)
(v) (vi) (vii)
b.
Major involvement in Phase 2: (i) Railway Operation Specialist (12 person-months). A graduate degree in mechanical engineering with adequate relevant experience. Signaling and Telecommunications Engineer (8 personmonths). A graduate degree in electrical engineering with adequate relevant experience. Materials & Depot Specialist (6 person-months). A graduate degree in civil engineering with adequate relevant experience. Railway Safety Specialist. (6 person-months). A graduate degree in mechanical engineering with adequate relevant experience.
(ii)
(iii) (iv)
(v)
Railway Maintenance Specialist (8 person-months). A graduate degree in civil engineering with adequate relevant experience.
G. 12.
National Consultants
The national consultants will report to the Team Leader for instructions and guidance. (i) (ii) (iii) (iv) (v) (vi) (vii) Surveying Technician (6 person-months). A graduate degree in civil surveying engineering with relevant experience. Soil Laboratory Technicians (2 persons with 6 person-months each). A graduate degree in civil engineering with relevant experience. Materials Engineer (6 person-months). A graduate degree in civil and materials engineering with relevant experience. Concrete Laboratory Technician (8 person-months). A graduate degree in civil and concrete technology with relevant experience. Environmental Specialist (6 person-months). A graduate degree in environment with relevant experience. Land Acquisition and Resettlement Specialist (6 person-months). A graduate degree in social development with relevant experience. Socioeconomic Surveyor (4 person-months). A graduate degree in social sciences with relevant experience. Regional Consultants (nationals from Central Asian countries and Afghanistan) Civil Engineers (two persons with 6 person-months each). A graduate degree in civil engineering- with relevant experience of railway construction. Bridges and Culverts Engineer (8 person-months). A graduate degree in civil engineering with relevant experience of railway construction. Mechanical Technician for Rolling Stock (10 person-months). A graduate degree in mechanical engineering with relevant experience. Signaling and Telecommunication Technician (10 person-months). A graduate degree in electrical and telecommunications with relevant experience. Procurement Specialist (12 person-months). A graduate degree in civil engineering with experience of procurement of goods and services for railway projects and familiar with the ADB's Procurement Guidelines.
H. (i) (ii) (iii) (iv) (v)
II.
Advisor for Institutional and Capacity Development A. Background
13. Afghanistan currently has no operating railways, and ADB is providing a grant for construction the first route. However, there are a range of significant issues that remain to be addressed, including but not limited to the aforementioned institutional structure for regulatory and operating roles, as well as basic operational issues such as the railway gauge to be used and tariff structure. In summary, Afghanistan is beginning to establish its railway sector and all relevant subjects necessary for railway operations and management will need to be addressed.
B.
Objective
14. The objective of the assignment is to advise and assist the Government in the development of the railway sector and related institutions to provide competitive railway services efficiently and economically. An advisor will be required to undertake the following tasks in accordance with the detailed scope of services: (i) (ii) (iii) Prepare long term railway development plan and the institutional development of the railway sector. Prepare draft railway legal framework and regulations. Prepare draft concession agreement for operation and maintenance of the railway lines advise the Government in implementing of all activities related to the establishment and launch of the railway operator. Develop a training program. Scope of Services
(iv) C.
15. The scope of services for completing the above tasks will include but not limited to the following: 1. Railway Network and Institutional Development Program
16. Identify routes and corridors for railway lines that would provide connectivity to main centers of commerce and trade in the country, as well as to other countries in the region. The specific railway lines should be prioritized for maximum benefits to the economy and impact on poverty reduction, such that these may be built as to provide value for money through reduced cost of transportation and living. 17. Provide justification and make recommendations as to the railway gauge to be adopted for development of the railway network in the country. Consideration will be given to the railway gauge in operation in other countries in the region to facilitate unhindered movement of goods and passengers across the borders. 18. Prepare a 10-Year Railway Development Program for the railway sector covering all aspects, including construction of railway network, technology and computerization, inputs for transportation production and safety of operation, railway management system for increased efficiency and financial sustainability. The program should be complete with justification to facilitate its adoption by the Government. This document is intended to become the primary planning tool for both short and long term planning and construction of railway lines. Determine future investment requirements of the railway network and identify possible sources of funding. 19. Provide guidelines for monitoring the performance of the sector and regulation of concessions. Develop specific, real, and measurable performance indicators for the railway sector and for operations of the railway related to relevant international standards which will subsequently be used to assess the effectiveness of the railway operator. 20. Define and layout efficient railway institution, management, operation and maintenance of the railway sector that incorporates the best practices which have been successfully implemented in similar situations.
2.
Draft Railway Legal Framework and Regulations
21. Review the completeness and adequacy of the existing policy, legal, and regulatory framework and recommend changes to facilitate development of the railway sector. 22. Review the current legislation relevant for the railway sector and assess its adequacy and/or shortcomings. 23. Provide the technical inputs for an appropriate approach, and suggested legal and regulatory framework for Governments consideration. 3. Draft Operation and Maintenance Concession Agreement.
24. Lay down the procedures for concessioning of the railways assets through a competitive bidding process, including (a) activities necessary to pre-qualify interested investors/ bidders; (b) draft prequalification terms and conditions, based on objective and quantifiable criteria; (c) draft invitation for prequalification of bidders for a concessioning contract; (d) prepare bidding terms and conditions that are objective and quantifiable; and (e) all other documentation necessary to complete the concession agreement. 25. Assist and advise the Government on the arrangements for a concession for operation and maintenance of the Hairatan Mazar-e-Sharif line with Uzbekistan Railway Company (UTY). 26. Prepare an information memorandum for UTY. As a minimum, include in the information memorandum (a) general information on the country; (b) current situation and the role of the various institutions (Government ministries, regulator, concessionaire, and others); (c) current sector legislation and regulations; (d) current tariff structure and its regulation; (e) background and operations of the railway in Afghanistan; (f) proposed rail sector and the role of various institutions; (g) proposed sector legislation and regulations; (h) proposed level of service requirements and their regulation; (i) proposed concession, including list of main assets, future investment plan for fixed assets, market analysis; (j) proposed process for selecting concessionaire, including a tentative timetable; (k) and any other relevant information. 27. Prepare guidelines to assist the proposed government entity that will be responsible for monitoring and ensuring compliance with the concession agreement and any other ongoing contractual obligations between the Government and the concessionaire. 4. Develop Training program
28. Develop a training program to build the capacity of identified staff in railway operation and maintenance, and in the Government to manage the railway sector. The training program shall, inter alia, cover (a) selected staff in management and operations of the railway, and interface with the concessionaire; and (b) study tour to countries for better understanding of management, operation and maintenance aspects as applied to the railway sector. 29. Overseas training would only be considered for staff on applicable courses in railway management and planning, and for senior staff in the Government on railway management topics. It is anticipated that the maximum length of any of these courses shall be no longer than two weeks
D.
Input
30. An international consultant shall be engaged for 10 months. He/she shall have adequate experience in railway sector to be able to cover the above tasks. E. Working Arrangements
31. The advisor will report to the Executive Committee (EC) chaired by a Minister. The advisor will report periodically to the EC and ADB, and will seek guidance from those entities as appropriate. 32. The Government will provide the following assistance and facilities to the advisor. (i) Facilitate smooth entry into the country, and ensure that Government provides all necessary visa and entry permits for the advisor. The Government will provide to the Consultant a detailed list of the national requirements for this, prior to entry. Exempt the consultant from local income taxes, and from customs duties on personal effects for the advisor, as well as equipment, instruments, and supplies authorized by the Government to be imported by the advisor for use on the project. Necessary assistance will be provided for the expeditious customs clearance of all these items. Provide all necessary relevant reports, documents and information as may be available and required for the fulfillment of the consultants obligations. Provide furnished and air-conditioned office accommodation. Landline telephone and internet services. Secretarial support Reporting Requirements
(ii)
(iii) (iv) (v) (vi) F. 33.
The consultant will provide the following reports: (i) Inception report 1 month after commencing the services. This report shall include a detailed task schedule for the remainder of the project. It will list all the deliverables for the project with target dates for submission. It shall comment on any findings during the inception period, and propose any refinements to the Terms of Reference. Such refinements should be agreed with the Government before the submission of the Inception Report. This report shall propose all the training courses to be carried out under the project, with details of training courses, venues and/or training institutions, names of the participants and timing of courses. A progress report to be submitted within 10 days of the end of each month. The monthly report should briefly describe the contract data with a list of remaining inputs, travel plans of staff, and the activities during the month, with a forecast for the activities during the next quarter. It should also note any key issues that may be an impediment towards progress of the project, and note any action taken or to be taken to resolve the issues. A draft final report at the completion of services, to be followed by a final report 1 month after receiving the Governments and ADBs comments on the draft final report. All reports will include working papers prepared during the period to which the report refers. All reports shall be submitted in the English language. The reports shall be submitted in three copies each to the Government and ADB.
(ii)
(iii)
(iv)
Supplementary Appendix B
FINANCIAL ANALYSIS AND FINANCIAL PROJECTIONS I. INTRODUCTION
1. The objective of this supplementary appendix is to conduct financial analysis and financial projections for the Hairatan to Mazar-e-Sharif Railway Development Project (the Project), part of an integrated multimodal transport system in Afghanistan. Detailed objectives are: (i) (ii) (iii) (iv) estimate the railways financial internal rate of return (FIRR); calculate the weighted average cost of capital (WACC); compare the expected FIRR with the weighted average cost of capital (WACC); and conduct the financial forecast and evaluate the potential financial performance of the railway agency;
2. It is assumed that the Hairatan to Mazar-e-Sharif Railway is operated as an independent agency. It is also assumed that the railway agency will eventually: (i) (ii) be subject to corporate income tax, business tax and any surcharges; and undertake design, construction and operation of the railway, and bears associated risks.
3. The expected construction period for this project is 2 years (20092010) and the expected operation period is 25 years, from 2011 to 2035. FIRR was estimated for the period from 2009 to 2035 and pro forma financial statements were prepared for the period from 2009 to 2035. All costs and revenues are expressed in 2009 constant prices in US dollars. 4. The financial analysis and financial projections need to be read with the economic analysis (Appendix 7). The financial analysis and projections were conducted in accordance with ADBs Guidelines. II. A. Cash inflow FINANCIAL ANALYSIS
5. The cash inflow of the proposed railway was determined by freight traffic forecast and tariff rate, and is generally from two sources: (i) (ii) 1. operating revenue; and other revenues. Operating Cash inflow
6. A weighted average railway tariff of $0.07 per tonne kilometer was used in this project. It was assumed that this rate remain constant for the operational life of the project. The traffic forecast for the project period is presented in Table 1. The total traffic forecast in tonne kilometer is derived by multiplying the traffic in Table 1 by the length of the railway and numbers of days in one year.
Table 1: Traffic forecast in tonne kilometer per day Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Source: Consultants estimates.
Daily Traffic 5,487 6,175 6,949 7,821 8,802 9,905 11,147 12,545 14,118 15,889 17,881 20,124 22,647 25,487 28,683 32,280 32,280 32,280 32,280 32,280 32,280 32,280 32,280 32,280 32,280
2.
Other Income
7. Actually, the railway firm will receive additional revenue from loading and unloading, warehouse, storage, and parcel service in the train stations. Provided the similarity of the proposed railway to other railway in Asia, a conservative value of 0.005% of freight revenue is assumed in this study. B. Cash outflow 1. Capital Expenditure
8. Detailed project capital costs, including base costs, physical contingency, and price contingency, are illustrated in Table 2. The total project cost is $169.5 million. Capital costs during the construction period for financial analysis include all incremental outlays related to the project, but exclude interest during construction and price contingency in calculating financial internal rate of return. Annual capital cost outlay for civil works and others during construction period was assumed at 10% in year 2009 and the rest in 2010. Rolling stock (locomotives and passenger coaches) was not included in the cost estimates. They may be purchased at the end of the construction period with local loan or leased from other railway company.
Table 2: Project Cost Estimates (US$ million)

Total Cost Base Cost 1 Railway Construction a. Land acquisition and resettlement b. Civil and railway works c. Design review and supervision 2 Railway Section and Institutional 3 Taxes and Duties Subtotal (A) Recurrent Costs 1 Project Management Support Subtotal (B) Total Base Cost Contingencies 1 Physicalc 2 Priced Subtotal (C) Total Project Cost (A+B+C) % of Base Cost by financier % ADB GOVT % GOVT
Item
A.
ADB
0.5 130.0 4.0 0.7 4.0 139.2 0.5 0.5 139.7
B.
0.4 93.1 2.9 0.5 2.9 99.6 0.0 0.4 0.4 100.0
0.0 130.0 4.0 0.7 0.0 134.7 0.5 0.5 135.2
0.0 100.0 100.0 100.0 0.0 96.8 100.0 100.0 96.8
0.5 0.0 0.0 0.0 4.0 4.5 0.0 0.0 0.0
100.0 0.0 0.0 0.0 100.0 3.2 0.0 0.0 0.0
C.
16.0 13.8 29.8 169.5
11.5 9.9 21.3 121.3
16.0 13.8 29.8 165.0
100.0 100.0 100.0 97.3
0.0 0.0 0.0 4.5
0.0 0.0 0.0 2.7
Source: consultants' estimates.
9.
Rolling stock was excluded for the project financial analyses. 2. Operating and maintenance costs
10. Annual operating and maintenance costs for the proposed railway include the following components: fixed costs (mainly maintenance cost) and variable costs. Variable costs are calculated by multiplying the unit cost by appropriate quantities. Fixed (maintenance) costs for the railway project are assumed in Table 3. Table 3: Maintenance Costs Operating Cost Component Routine Maintenance Major Maintenance 3. Taxes Assumption 1% of project cost 5% of project cost
11. Table 4 summarizes the taxes applicable to the railway firm in Afghanistan. It is assumed that the income tax rate and business tax rate are 20% and 23% respectively on the firms across Afghanistan. Table 4: Taxes Rates Tax Business tax Corporate income tax Tax on revenue Before-tax profit Tax rate 2.03.0 % 20 %
Source: MPW and consultants assumptions
4 C.
Weighted average cost of capital (WACC)
12. In theory, the WACC is zero if ADB is the only contributor of the project as a grant. However, there is an opportunity cost for ADB funds. Table 5 illustrates the estimate of after-tax WACC by following the ADB guidelines. WACC is estimated at 1.9% Table 5: Estimate of the WACC Item Amount ($ million) Weighting Nominal Cost Tax Rate Tax-Adjusted Nominal Cost Inflation Rate Real Cost Weighted Component of WACC Weighted Average Cost of Capital (Real)
Source: consultants estimates.
ADB 165 97% 3.00% 3.00% 2.91% 1.00% 1.89% 1.84% 1.87%
Government 4.5 3% 7.00% 0.00% 7.00% 6.00% 0.94% 0.03%
Total 169.5 100%
1.87%
D.
Financial Internal Rate of Return (FIRR)
13. The result is illustrated in Table 6. Table 5 shows the FIRR of 3.18% with minimum track access charge of 35% of rail freight transport tariff at $0.07 per tonne km, greater than the 1.9% WACC. Therefore, the project is viable if fixed fee and/or revenue sharing scheme with a prospective rail operator is within the estimated range. Table 6: FIRR the base case Cash Outflow Capital Operating Expenditure Outflows 16.12 145.08 0.00 0.00 1.61 1.61 1.61 1.61 1.61 8.06 1.61 1.61 1.61 1.61 1.61 1.61 1.61 Cash Inflow Operating Inflows 0.00 0.00 3.57 4.02 4.52 5.09 5.73 6.44 7.25 8.16 9.19 10.34 11.63 13.09 14.73
Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Net Free Cash Flow -16.12 -145.08 1.96 2.41 2.91 3.48 4.11 -1.62 5.64 6.55 7.57 8.72 10.02 11.48 13.12
Year 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Cash Outflow Capital Operating Expenditure Outflows 1.61 1.61 8.06 1.61 1.61 1.61 1.61 1.61 1.61 1.61 1.61 1.61
Cash Inflow Operating Inflows 16.58 18.66 21.00 21.00 21.00 21.00 21.00 21.00 21.00 21.00 21.00 21.00 FIRR NPV
Net Free Cash Flow 14.97 17.05 12.94 19.39 19.39 19.39 19.39 19.39 19.39 19.39 19.39 -12.85 3.18% 33.98
32.24
Source: ADB staff estimates.
E.
Sensitivity Analysis
14. The FIRR for the project are tested under the unfavorable parameters. The results of the sensitivity analysis are presented in Table 7. It shows that FIRR is highly sensitive to tariff and capital costs. Table 7: Summary Results of Sensitivity Analysis Switching Value 19% 83% -14%
Base case 20% increase in capital cost 20% increase in O&M cost 10% decrease in freight transport tariff
Source: ADB staff estimates.
FIRR 3.2% 1.8% 2.9% 2.2%
NPV 34.0 (1.1) 25.8 9.0
III. A. Assumptions 1. General
FINANCIAL PROJECTIONS
15. The financial projections presented in Table 9 were prepared on a nominal basis based on assumptions outlined in the following paragraphs. 16. Domestic inflation rates have been assumed to be 6.0% from year 2010 while international inflation rates have been assumed to maintain 1.0% throughout the projection period.
17. It assumed the railway agency is operating as an independent entity. The government bears the foreign exchange risk. 2. Revenues and Cost of Sales
18. The railway agencys primary source of revenue will be from the track access charge if operation and management will be done by a professional rail operator. Railway agency was assumed to be established and operated by a professional manager. The company would have the capital of $156 million. Refer to paragraph 6 for traffic forecast and tariff. 3. Expenses a. Operating Expenses
19. Operating expenses include operation and maintenance, salaries and wages, depreciation, amortization and administrative expenses. 20. Repairs and maintenance costs are forecast as a percentage 1% of gross fixed assets in service, and regular overhaul of 5% of gross fixed assets (consistent with FIRR table). 21. Administrative and overhead costs include rent, utilities, office expenses, travel, security, audit and directors fees, insurance, supplies etc. Fixed expenses or administrative and overhead costs include rent, utilities, office expenses, travel, security, audit and directors fees, insurance, supplies etc. Fixed expenses are estimated at $76,470 per km and variable expenses are computed on the basis of 4.5% of freight traffic. They are adjusted upward to reflect domestic inflation. 22. A straight-line depreciation method is adopted for railway assets in this study. An average annual depreciation rate of 4% was assumed for different categories of capitalized fixed assets, including rolling stock. The residual value is assumed at zero at the end of the project period for the purposes for financial forecast. b. Tax Expense and Dividend Payments
23. The effective tax rates on railway firm are shown in Table 4. For the purpose of financial forecast it is assumed that business taxes are levied on revenue and corporate income tax are estimated at earnings after interest. 24. It was assumed that the railway firm will not pay dividends. In addition, grant from ADBs contribution is treated as equity. B. Pro forma financial statements
25. Based on the above assumptions, the three pro forma financial statements were produced through financial forecast. This is done by using the same base data as above for 2 years of construction period and 25 years of operation (2011 to 2035) in the base case. The three pro forma statements (income statement, balance sheet and cash flow statement) were produced for the project and are shown below. The projections presented in this supplementary appendix are in accordance with internationally accepted standards
C.
Financial Performance
26. Through financial forecast, we can see the financial performance and financial sustainability of the railway entity during the construction and operation periods that extends to year 2035. For an independent revenue generating entity with capital structure comprising long term debt and equity, the important indicator of financial risk is the annual debt service ratio, which indicates the extent to which firms net cash inflows cover debt outflow. A further indicator is the potential return that could be earned on equity and assets. Table 8: Proforma Financial Statements (million Af)
fiscal year ending 20 March Income Statement Summary Revenue Operating Expenses Net Profit before Tax Tax Net Income after Tax Cash Flow Summary Net Cash from Operating Net Cash from Financing Net Cash from Investing Increase in cash and cash equivalents Balance Sheet Summary Fixed Assets Current Assets Total Assets Current Liabilities Long-term Debt Equity Net profit transferred Total liabilities and equity Key Performance Indicators Return on Equity Long-term Debt to equity (%) Current ratio Accounts receivable (months) Operating Margin 2010 6,743 1,078 5,665 2,096 3,569 2011 8,888 897 7,995 2,958 5,037 2012 12,215 1,066 11,160 4,129 7,031 2013 17,478 1,493 15,999 5,920 10,079 2014 25,992 1,748 24,262 8,977 15,285 2015 40,120 2,177 37,967 14,048 23,919 2016 64,191 2,994 61,231 22,656 38,576 2017 106,321 4,348 102,025 37,749 64,276 2018 182,092 7,280 174,901 64,713 110,187 2019 322,122 11,741 310,531 114,896 195,635 2020 587,977 21,382 566,862 209,739 357,123 2021 1,106,349 41,029 1,065,831 394,357 671,474
2,727 0 21 2,748
4,910 0 26 4,936
6,704 1,000 34 7,738
9,709 0 39 9,748
14,384 0 44 14,428
22,121 0 51 22,172
35,140 0 62 35,202
57,934 0 82 58,015
98,262 0 119 98,381
173,595 0 182 173,777
314,655 1,000 301 315,956
588,340 0 547 588,888
14,814 1,164 15,978 117 3,569 3,686
19,331 1,672 21,002 105 8,606 8,711
26,690 2,369 29,059 131 1,000 15,636 16,767
35,847 3,315 39,162 154 1,000 25,716 26,870
49,651 4,836 54,487 194 1,000 41,001 42,195
71,141 7,334 78,475 263 1,000 64,921 66,183
105,533 11,651 117,184 396 1,000 103,496 104,892
162,558 19,124 181,682 619 1,000 167,772 169,390
259,423 32,932 292,355 1,104 1,000 277,959 280,063
431,174 57,556 488,730 1,844 1,000 473,594 476,438
743,377 105,078 848,456 3,447 2,000 830,717 836,164
1,325,177 198,023 1,523,200 6,718 2,000 1,502,191 1,510,908
25% 0% 9.9 2 84%
27% 0% 15.9 2 90%
28% 0% 18.1 2 91%
30% 0% 21.5 2 92%
33% 0% 24.9 2 93%
36% 0% 27.9 2 95%
40% 0% 29.4 2 95%
43% 0% 30.9 2 96%
47% 0% 29.8 2 96%
50% 0% 31.2 2 96%
54% 0% 30.5 2 96%
57% 0% 29.5 2 96%
FINANCIAL MANAGEMENT ASSESSMENT Table of Contents 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Introduction Organizational Structure and Governance Fund Flow Arrangements and Grant Distursement Finance Division and Staffing Arrangements Accounting Standard, Policies, and Principle Accounting and Recording Procedures Asset Management Budgeting System Auditing Financial Reporting Accounting System Conclusions Recommendations Action Plan Financial Covenants Supervision Plan 2 2 4 5 5 6 6 6 6 7 7 7 8 9 9 9 10 18 29 30 31
Appendix 1 Financial Management Assessment Questionnaire Appendix 2 Terms of Reference for PMO Staff Appendix 3 Sample of Financial Reporting Appendix 4 Sample of Project Reporting Appendix 5 Proposed Accounting and Recording Procedures
2 1.
Supplementary Appendix C
Introduction
1. This report aims at assessing the financial management arranges of the implementing agency. Detailed objectives include: (i) (ii) (iii) (iv) (v) (vi) (vii) review of the legal status and organizational structure; identification of the fund flow arrangements; review of the structure of finance division and its staffing arrangements; assessment of the accounting standard, policies, procedures, budgeting, payment, cash management, and fixed asset management; assessment of the auditing arrangements; review of the financial reporting system; and evaluation of the accounting system in the implementing agency.
2. The Hairatan to Mazar-e-Sharif Railway Development Project is part of an integrated multimodal transport system in Afghanistan linking this landlocked country to its neighboring countries. The consultants are supposed to undertake a study on this railway development in the northern part of Afghanistan and provide advice and recommendations to the Government. The implementing agency of this project is Ministry of Public Works (MPW). 3. The financial management arrangements of the implementing agency have been assessed based on the results of ADB Financial Management Assessment Questionnaires, which were completed with the assistance of the implementing agency. The consultants delivered the questionnaires to the implementing agency first and conducted a face-to-face interview with the financial staff in the implementing agency. The ADB financial management questionnaire is shown in Appendix 1. 2. Organizational Structure and Governance
4. The organizational structure of MPW is generally appropriate for the needs of the project. The partial organization structure is shown in Figure 1. Under MPW, there are many departments, among which the relevant ones are Planning, Survey and Design, Railway, Administrative Office, Road Maintenance, and PMU (ADB). MPW is a government organization specialized in road and railway construction in Afghanistan. Project Management Unit (PMU) for ADB projects for roads and others is already established. Railway Department is a coordinating department in MPW. 5. A separate project implementation unit (PIU) will be set up and established specific to the Project. The PIU will handle day-to-day project activities for project implementation and will be responsible for procurement, fund withdrawals, and reporting to ADB have specific responsibility. A PIU director professionally qualified in project management, with experience in project management and civil works will be recruited by ADB. The PIU director will have complete authority to manage the unit, coordinate with the contractor and supervision consultant, and administer the project implementation. The Ministry of Public Works (MPW) will be the executing agency (EA). MPW will ensure that, during the entire period of project implementation, the PIU is adequately staffed with sufficient experience in engineering, financial, procurement, administrative, and secretarial staff; and equipped with the necessary office space, equipment, and facilities (to be provided by the works contract). During the implementation the PIU staff will report to the PIU Director on day to day project related activities. The organizational structure for PIU is in Figure 2. The PIU director will report to ADB on all matters with EA informed.
6. The PIU will oversee all activities under the Project, including project preparation if any required and implementation, as well as monitoring and reporting. A suitable management information system will be introduced in the PIU to manage the Project. The PIU will prepare progress reports and will submit them to the EA and ADB every quarter. It will also submit other required performance and monitoring reports twice a year. Overall progress and compliance with conditions of the Grant Agreement will be monitored regularly with periodic reports to ADB. Reports will include evaluation of issues or problems and recommend remedial actions. 7. Concerted efforts are needed from the Government to accomplish the railway project completion, which require undertaking various activities within extremely limited time period and taking all the decisions on a fast track basis. In order to administer the project effectively, the Government will constitute an Executive Committee (EC), with representatives from MPW, MOF and MOCI, chaired by the Minister of Commerce and Industry until such time that other arrangements are agreed between Government and ADB. The EC will provide overall guidance, facilitate all approvals from various agencies and finalize agreements with UTY that are required for smooth implementation of the project and operation and maintenance (O&M), and coordinate with PIU director. Figure 1: Partial Organizational Structure of MPW
MPW
Planning
Survey& Design
Administrative Office
Railway
Road Maintenance
Existing PMU (ADB)
Source: MPW
Figure 2: PIU Structure

ADB MPW
DIRECTOR Project Implementation Unit
Supervision Consultants
Engineering
Financial
Administration
Security
Contractor (UTY)
8. MPW has extensive experience in implementing external assistance projects, especially ADB projects: (i) (ii) (iii) (iv) (v) 9. ADB Loan 2254/Grant 0054: North-South Corridor; ADB Loan 149: Pol-e-Khomri to Mazare-sharif Road Project; ADB Loan 2140: Andkhoy-Qaisar Road Project; ADB Grant 0012 Qaisar-Balamorghab Road Project; and ADB Grant 0081 Laman-Balamoreghab Road Project.
In addition, it has also implemented two MFF Grant projects: (i) (ii) Jabulsarag-Eshkashim Road Project; and Bagrami-Saparg Road Project.
3.
Fund Flow Arrangements and Grant Disbursement
10. The fund flow arrangements from ADB to MPW are illustrated in Figure 3. The ADB grant will be channeled to MPW though Ministry of Finance (MOF). The fund is grant so no repayment is required. Figure 3: Fund Flow Arrangements
ADB
Ministry of Finance
MPW
11. MPW has experience in managing fund transfer from ADB, but has no experience in hedging foreign exchange risk since MOF assumes this responsibility.
12. The ADB grant of around US$ 165 million will be disbursed over a period of 2 years. Disbursement from ADB fund grant will follow the ADBs traditional reimbursement procedures with payments against full documentation or against statement of expenditures. 13. MPW has an imprest account in Afghanistan Bank, the central bank of Afghanistan. The imprest account is operated by the implementing agency for transaction purposes and is controlled by MOF. A new imprest account will be established for the proposed investment. 4. Finance Division and Staffing Arrangements
14. The structure of the finance division under the existing PMU for ADB road projects is shown in Figure 4. Within the division there are three positions: financial manager and two project accountants. There are detailed terms of references for the financial positions and other positions in PMU, which clearly define the roles, responsibilities, line of reporting and constraints. Detailed terms of references are shown in Appendix 2. As defined in the terms of references, the two project accountants do exactly the same job. Figure 4: Structure of Finance Division Financial Manager
Project Accountant
Project Accountant
Source: MPW PMU
15. The financial manager and one project accountant have 5 year experience in accounting while the other project accountant has only two year experience. All of the three staff does not have degrees or professional qualifications in accounting and finance. 16. The three staff has been trained in ADB procedures. Various training programs on finance and accounting have been provided by MOF and ADB. The accounting staff usually has 5 year contract with MPW, renewable every year. MPW currently has no vacancy for accounting and financial positions although additional staff is needed for the division. For the new PIU to be set up under the project, its services will be outsourced and financed by the grant to minimize risks associated with lack of staff resources with relevant skills. 17. Obviously, the existing finance division and staff are not appropriate for the proposed project since the staff significantly lacks experience and professional knowledge in accounting and finance and there are not separate functions between the two project accountants. 5. Accounting Standard, Policies, and Principle
18. MPW does not follow any accounting standard, policies, regulations in line with international practice, instead simply follows the ADB requirements. The manuals issued by
MOF for the accounting policies and regulations are used to guide the routine accounting. The existing policies and regulations will be used for the proposed project. Only MOF has power to change the accounting policies and regulations. The conflict of interest and insider transaction are not defined in the accounting policies. 19. Cash is the base of accounting and will be adopted by MPW for the proposed project. In addition, the accounting principle currently adopted by MPW is characterized by its single entry system. 6. Accounting and Recording Procedures
20. MPW does not have a comprehensive set of accounting procedures that allow for recording of financial transactions. Rather, it has a simple accounting procedure based on ADBs guideline for project purpose. A complete chart of accounts has not been established. The procedures for controls are not well established and enforced. The functions for authorization, financial transaction, recording and asset management are not performed by different persons respectively and are not separated under the existing accounting practice in MPW. In addition, the recording procedures in MPW do not follow the international practice. 21. In accordance with the regulations on the accounting documents in Afghanistan, the financial statements, accounting and supporting documents for ADB projects are retained permanently. 7. Asset Management
22. Technical Deputy Minister is the authorized signatory in the bank accounts. MPW maintains an adequate, up-to-dated cash book for daily receipts and payments. Banks and cash are reconciled once a month. Any unusual items on the bank reconciliation will be investigated and approved by Technical Deputy Minister. 23. MPW has already established a system to protect its assets from fraud, waste and abuse. The subsidiary record for fixed assets is updated and reconciled with main accounts. Physical inventory of fixed assets is conducted quarterly. MPW only purchases insurance for certain assets such as special equipment. 8. Budgeting System
24. MPW has a budgeting system for ongoing ADB road projects, which covers mainly financial targets and contains the important activities for project construction and development. Actual expenditures are compared with budget every month. The budget does not usually change. MOF is responsible for preparing the budget and also approve the budget. Previous experience shows that there is not significant deviation between budget and actual expenditures. 9. Auditing
25. MPW does not have an internal auditing department. However, the internal audit function is assumed by Control Office and Audit (COA), a representative office from MOF with around 15 staff located in MPW. The background and qualification of COA are not known. Adequate measures and actions will be taken once problems are identified from internal auditing. The COAs auditing scope also cover the proposed project.
26. MPWs financial statements are regularly audited by Alliott Hadi Shahid Accounting Firm, an external auditor. The auditing reports are usually released in 15 days after the audit is completed. The external auditing is based on the international standards. MPWs external auditor will also be the auditor for the proposed project. 10. Financial Reporting
27. MPWs financial Statements are prepared monthly based on ADBs requirements. Only MPW headquarter is responsible for preparing the financial statements. A sample of financial statement of MPW is shown in Appendix 3. The same reporting system will be used for the proposed project. The financial statement only contains the information related to progress of grant (or loan) disbursements and payment. 28. MPW also has a comprehensive reporting system for physical progress, financial information and other project information. A sample of the report is shown in Appendix 4. 11. Accounting System
29. MPWs financial statement is produced from an automated accounting system, which is designed by the consultants for ADB projects. An MPW financial staff is usually trained by the consultants for this system. The financial data is confidential, but can be made available upon requested. 12. Conclusions
30. Based on the assessment above, the existing organizational structure of MPW is generally appropriate to the existing construction business and the proposed ADB project. The fund channeling arrangements are clearly defined. The current accounting policies, procedures, and reporting system adopted by MPW are only suitable only for ADB projects. 31. However certain shortfalls are found as follows: (i) The MPWs financial staff does not have experience in business accounting. The staff is only familiar with ADB projects book keeping and lacks expertise and knowledge on financial accounting and managerial accounting. MPW does not follow an internationally accepted accounting standard, regulation, policy, but only follows the ADBs requirements. As a result, MPW has adopted a simple book keeping system for ADB project, which might not be suitable for other donor projects. Based on the existing accounting principles, the accounting system currently adopted by MPW is characterized by its case basis and single entry system. Cash basis means that the expenses in MPW are booked when they are actually paid, rather than when incurred. The existing accounting is a single entry system that records each transaction as either debt or credit without a corresponding entry. The current accounting procedures and recording procedures are not adequate for the organization and the proposed project. The functions for authorization, financial transaction, recording and asset management are not separated in MPW. The recording procedures in MPW do not follow the international practice. The existing budgeting system of the implementing organizations is not suitable to the proposed projects. The current budgeting is prepared by MOF rather than by MPW. As a consequence, the projects budget might not be realistic.
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
The current reporting system is not appropriate for the organization and the proposed project. From the Appendix 3, we can see that the financial report is actually a report on grant (or loan) disbursement and payment, rather than a standard financial statement. Information related to current assets, fixed asset, short term and long term financing, and equity is not reflected in the report. In addition information related to cash inflow and cash outflow is not reported. MPW does not have an internal auditing department and effective internal control system. The internal control function is currently assumed by COA, a representative of MOF. The existing software of MPW is not appropriate for the organization and the proposed project. The existing software is designed mainly for ADB projects and is not typical accounting software. As a result, many accounting functions and reporting functions are not performed.
13. 32.
Recommendations Therefore, the recommendations are as follows: (i) The MPWs financial staff should be trained on business accounting and project accounting. The training programs should cover principles of financial accounting and managerial accounting, project accounting, and business accounting. MPW should follow a an accounting standard, regulation, policy, principle and accounting system on construction project in line with international practice. The accounting standard, regulation, policy, principle and accounting system on construction project should be designed by MOF. Consistent with this, MPW should change its accounting principles to accrual basis and double entry system. MPW should adopt a accounting procedures and recording procedures in line with international practice. The proposed accounting and recording procedures are shown in Appendix 5. MPW should prepare the budget for investment projects, which will be approved by MOF since it is directly involved in project development and financing. The budget should cover detailed financial and physical targets. MPW should prepare at least two financial statements: balance sheet and cash flow statement for the projects in addition to the statements for ADB. The financial statement should contain most important information relation to its assets, financing, equity, and cash flow positions. MPW should establish an internal auditing department and effective internal control system. In the same time, COA, a representative of MOF, should become an external auditing organization on behalf of government rather than an internal auditing organization. This could be minimized by using outsourced PIU to provide objectivity where conflicts of interest could influence a decision. The MPWs accounting software should be revised for accounting and budgeting purposes. In addition, the software should also be revised for producing standard financial statements such as balance sheet and cash flow statements.
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
14. 33.
Action Plan Actions required are shown below: Before 1 January 2010 (i) (ii) (iii) (iv) (v) Agree with supervision consultants on feasible financial arrangement amongst the listed recommendations. Agree with MPW to recruit professional financial and accounting staff although the risk is minimized by outsourcing PIU staff. Train the existing and newly hired financial and accounting staff to ensure that adequate financial management arrangements are in place. Adopt and implement an accounting and financial management system for ADB projects in line with international practice Purchase an accounting software specialized in project accounting
15.
Financial Covenants (i) (ii) MPW shall ensure that a satisfactory financial management system is maintained during the project implementation. MPW shall submit audited annual financial statements of the project to ADB no later than six months of the end of the six-month fiscal period to which they relate.
16.
Supervision Plan
34. Closer supervision would be required for the setting up of PIU at the preparation stage to ensure compliance with the proposed financial management systems and staffing enhancement, and understanding of ADB requirements.
10
Supplementary Appendix C1
FINANCIAL MANAGEMENT ASSESSMENT QUESTIONNAIRE MPW, Afghanistan Topic 1. Implementing Agency 1.1 What is the entitys legal status / registration? Response PPW, a government organization specialized in road and railway construction. Yes, the projects include: ADB Loan 2254/Grant 0054: North-South Corridor; ADB Loan 149: Pol-e-Khomri to Mazaresharif Road Project; ADB Loan 2140: AndkhoyQaisar Road Project, ADB Grant 0012 QaisarBalamorghab Road Project; and ADB Grant 0081 LamanBalamoreghab Road Project; and MFF Grant: Jabulsarag-Eshkashim Road Project and Bagrami-Saparg Road Project Ministry of Economy Independent government organization Yes, see attached for partial organization. ADB MOF - MPW Remarks
1.2
Has the entity implemented an externallyfinanced project in the past (if so, please provide details)?
1.3 1.4 1.5 2. 2.1
2.2
2.3 2.4
What are the statutory reporting requirements for the entity? Is the governing body for the project independent? Is the organizational structure appropriate for the needs of the project? Funds Flow Arrangements Describe (proposed) project funds flow arrangements, including a chart and explanation of the flow of funds from ADB, government and other financiers. Are the (proposed) arrangements to transfer the proceeds of the loan (from the government / Finance Ministry) to the entity satisfactory? What have been the major problems in the past in receipt of funds by the entity? In which bank will the Imprest Account be opened?
Yes, many similar ADB projects have been implemented through this PMU. No Afghanistan Bank, Central Bank
11
Topic 2.5 Does the (proposed) project implementing unit (PIU) have experience in the management of disbursements from ADB? 2.7 Does the entity have/need a capacity to manage foreign exchange risks? 2.8 How are the counterpart funds accessed? 2.9 How are payments made from the counterpart funds? 2.10 If part of the project is implemented by communities or NGOs, does the PIU have the necessary reporting and monitoring features built into its systems to track the use of project proceeds by such agencies? 2.11 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are proper guidelines formulated to record and value the labor contribution? 3. Staffing 3.1 What is the (proposed) organizational structure of the accounting department? Attach an organization chart. 3.2 Identify the (proposed) accounts staff, including job title, responsibilities, educational background and professional experience. Attach job descriptions and CVs of key accounting staff. 3.3 Is the project finance and accounting function staffed adequately? 3.4 Is the finance and accounts staff adequately qualified and experienced? 3.5 Is the project accounts and finance staff trained in ADB procedures? 3.6 What is the duration of the contract with the finance and accounts staff? 3.7 Indicate key positions not contracted yet, and the estimated date of appointment. 3.8 Does the project have written position descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all of the officers, managers, and staff? 3.9 At what frequency are personnel transferred?
Response Yes, they are PMU specialized in ADB projects. No, it is managed by Ministry of Finance Usually they are grants rather than loans. No counterpart fund is required. MPW is the only organization for implmenting the project.
Remarks
No
See attached.
See attached.
No, the PMU needs another accountant. No Yes 5 years and renew every year NA Yes, there are terms of references for all accounting staff, see attached. Not usually been transferred
12
Topic 3.10 What is training policy for the finance and accounting staff? 4. 4.1 Accounting Policies and Procedures Does the entity have an accounting system that allows for the proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and sources of funds? Will the project use the entity accounting system? 4.2 Are controls in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained? 4.3 Is the chart of accounts adequate to properly account for and report on project activities and disbursement categories? 4.4 Are cost allocations to the various funding sources made accurately and in accordance with established agreements? 4.5 Are the General Ledger and subsidiary ledgers reconciled and in balance? 4.6 Are all accounting and supporting documents retained on a permanent basis in a defined system that allows authorized users easy access? Segregation of Duties 4.7 Are the following functional responsibilities performed by different units or persons: (i) authorization to execute a transaction; (ii) recording of the transaction; and (iii) custody of assets involved in the transaction? Are the functions of ordering, receiving, accounting for, and paying for goods and services appropriately segregated? Are bank reconciliations prepared by someone other than those who make or approve payments?
Response Remarks The financial staff attends one day training programs in accounting every year. Yes, it only follows the ADB project accounting system.
No, the two accounting staff does the same job.
There is no chart of accounts, only ADB project accounting items. Yes, it strictly follows the ADB procudures. NA All statements and supporting documents for ADB project are retained permanently.
The three functions are not performed by three different persons respectively. The four functions are not separated under the existing system. Bank reconciliations are usually conducted by financial manager of the PMU, not the one the deputy Ministor, who authorizes payments.
4.8
4.9
13
Topic Budgeting System 4.10 Do budgets include physical and financial targets? 4.11 Are budgets prepared for all significant activities in sufficient detail to provide a meaningful tool with which to monitor subsequent performance? 4.12 Are actual expenditures compared to the budget with reasonable frequency, and explanations required for significant variations from the budget? 4.13 Are approvals for variations from the budget required in advance or after the fact? 4.14 Who is responsible for preparation and approval of budgets? 4.15 Are procedures in place to plan project activities, collect information from the units in charge of the different components, and prepare the budgets? 4.16 Are the project plans and budgets of project activities realistic, based on valid assumptions, and developed by knowledgeable individuals? Payments 4.17 Do invoice-processing procedures provide for: (i) Copies of purchase orders and receiving reports to be obtained directly from issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations? 4.18 Are all invoices stamped PAID, dated, reviewed and approved, and clearly marked for account code assignment? 4.19 Do controls exist for the preparation of the payroll and are changes to the payroll properly authorized? Policies And Procedures 4.20 What is the basis of accounting (e.g., cash, accrual)? 4.21 What accounting standards are followed?
Response
Remarks
The budget includes only physical budget. The budget contains sufficient details.
Actual expenditures are compared monthly.
Approval is needed for any variations from budget. MPW and MOF respectively Yes, the procedure is clearly defined.
The budgets and plans are realistic.
The invoice processing procedures strictly follow the ADBs procedures.
No, MOF is responsible for the payment. No
Cash ADB accounting standard
14
Topic 4.22 Does the project have an adequate policies and procedures manual to guide activities and ensure staff accountability? 4.23 Is the accounting policy and procedure manual updated for the project activities? 4.24 Do procedures exist to ensure that only authorized persons can alter or establish a new accounting principle, policy or procedure to be used by the entity? 4.25 Are there written policies and procedures covering all routine financial management and related administrative activities? 4.26 Do policies and procedures clearly define conflict of interest and related party transactions (real and apparent) and provide safeguards to protect the organization from them? 4.27 Are manuals distributed to appropriate personnel? Cash and Bank 4.28 Indicate names and positions of authorized signatories in the bank accounts. 4.29 Does the organization maintain an adequate, up-to-date cashbook, recording receipts and payments? 4.30 Do controls exist for the collection, timely deposit and recording of receipts at each collection location? 4.31 Are bank and cash reconciled on a monthly basis? 4.32 Are all unusual items on the bank reconciliation reviewed and approved by a responsible official? 4.33 Are all receipts deposited on a timely basis?
Response Yes, the guideline is issued by MOF. Not Only Ministry of Finance has power to change the accounting principle. Yes
Remarks
No
All staff has a copy.
Dr. Wli Mohuad Rasool, Technical Deputy Ministor Yes, see attached.
Yes
monthly Dr. Wli Mohuad Rasool, Technical Deputy Ministor NA. The PMU is not responsible for any receipts and payment.
Safeguard over Assets 4.34 Is there a system of adequate safeguards to Yes, there is a system. protect assets from fraud, waste and abuse? Yes 4.35 Are subsidiary records of fixed assets and stocks kept up to date and reconciled with control accounts? 4.36 Are there periodic physical inventories of Every quarter fixed assets and stocks?
15
Topic 4.37 Are assets sufficiently covered by insurance policies? Other Offices and Implementing Entities 4.38 Are there any other regional offices or executing entities participating in implementation? 4.39 Has the project established controls and procedures for flow of funds, financial information, accountability, and audits in relation to the other offices or entities? 4.40 Does information among the different offices/implementing agencies flow in an accurate and timely fashion? 4.41 Are periodic reconciliations performed among the different offices/implementing agencies? Other 4.42 Has the project advised employees, beneficiaries and other recipients to whom to report if they suspect fraud, waste or misuse of project resources or property? 5. Internal Audit 5.1 Is there an internal audit department in the entity? 5.2 What are the qualifications and experience of audit department staff? 5.3 To whom does the internal auditor report? 5.4 Will the internal audit department include the project in its work program? 5.5 Are actions taken on the internal audit findings? 6. External Audit 6.1 Is the entity financial statement audited regularly by an independent auditor? Who is the auditor? 6.2 Are there any delays in audit of the entity? When are the audit reports issued? Is the audit of the entity conducted according to the International Standards on Auditing?
Response Only some assets are covered. Yes, regional offices of MPW The regional offices report to MPW headquarter.
Remarks
Yes
Yes
Yes, legal department.
No NA NA NA NA
6.3
The financial statements are regularly audited by Alliott Hadi Shahid, an accounting firm. No delay. The auditing reports are released within 15 days. Based on the international standards.
16
Topic 6.4 Were there any major accountability issues brought out in the audit report of the past three years? 6.5 Will the entity auditor audit the project accounts or will another auditor be appointed to audit the project financial statements? 6.6 Are there any recommendations made by the auditors in prior audit reports or management letters that have not yet been implemented? 6.7 Is the project subject to any kind of audit from an independent governmental entity (e.g., the supreme audit institution) in addition to the external audit? 6.8 Has the project prepared acceptable terms of reference for an annual project audit? 7. Reporting and Monitoring 7.1 Are financial statements prepared for the entity? In accordance with which accounting standards? 7.2 7.3 Are financial statements prepared for the implementing unit? What is the frequency of preparation of financial statements? Are the reports prepared in a timely fashion so as to useful to management for decision making? Does the reporting system need to be adapted to report on the project components? Does the reporting system have the capacity to link the financial information with the project's physical progress? If separate systems are used to gather and compile physical data, what controls are in place to reduce the risk that the physical data may not synchronize with the financial data? Does the project have established financial management reporting responsibilities that specify what reports are to be prepared, what they are to contain, and how they are to be used? Are financial management reports used by management?
Response No for the PMU, MPW
Remarks
Same auditor
Any suggestions on auditing report are accepted. The financial statements are regularly audited by CAO (Control and Audit Office). Yes
The financial statements are prepared in accordance with ADBs standard. No Financial statements are prepared every month.
7.4
7.5
The same reporting system will be used for the project components. Yes, see attached physical report.
7.6
The reporting responsibilities are clearly defined.
7.7
Yes, they are used in decision making.
17
Topic 7.8 Do the financial reports compare actual expenditures with budgeted and programmed allocations?
7.9
8. 8.1
8.2
8.3 8.4
Response Remarks Yes, at the end of each quarter, actual expenditures are compared with the planned expenditures. Are financial reports prepared directly by the from automated accounting system automated accounting system or are they prepared by spreadsheets or some other means? Information Systems Is the financial management system Yes, although the computerized? accounting is a simple book keeping. Can the system produce the necessary The financial statements project financial reports? for ADB are produced from the this system. Is the staff adequately trained to maintain Yes, they are well trained. the system? Does the management organization and Yes processing system safeguard the confidentiality, integrity and availability of the data?
NA: irrelevant
Supporting Documents (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) Financial regulations, standards or pronouncements used by the project/entity Information concerning the legal and organizational structure of the entity Extracts or copies of important legal documents, agreements, or minutes Information concerning the sector, economic and legislative environment within which the entity operates Evidence of consideration of the work of the Internal Auditor (if applicable) and conclusions reached Analyses of significant ratios and trends (revenue generating projects) Draft format of the financial statements produced by the project/entity Copies of communications Chart of Accounts Project or entity Financial Management Manual Audit terms of reference Terms of reference and curriculum vitae for key financial and accounting personnel Operational manual Copy of most recent audit report (if applicable)200203 available ISO 9001 documentation (manual for systems and procedures)
18
TERMS OF REFERENCE FOR PMO STAFF 1. The Ministry of Public Works (MPW) is implementing various road projects in the Islamic Republic of Afghanistan. For implementation of the projects funded by the Asian Development Bank (ADB), a Program Management Office (PMO) is proposed to be established within MPW by transforming the existing PMU to PMO. The PMO will handle implementation related tasks that would include (a) procurement civil works and consultants services, (b) monitor the progress of day-to-day project implementation, (c) accord various approvals including approval for variations, extension of time, (including obtaining approvals of the donors, etc.), etc., (d) prepare progress reports (e) prepare withdrawal applications for disbursement, (f) maintain project accounts and complete loan financial records for auditing and (g) ensure compliance of various Loan and Grant covenants, etc. 2. The terms of reference of the PMO staff will be as under: 1. Program Director a. The Program Director will have overall responsibility for management and implementation of all ADB financed projects in MPW. He/she shall work under the Minister [or Deputy Minister (Technical) if authorized by the Minister] and his/her duties and responsibilities will include, but not limited to: (i) (ii) Coordinate with ADB and other Donors for implementation of various road projects in MPW. Oversee procurement planning, monitor the procurement of civil works and services to ensure that all the activities are performed as per the plan and take corrective actions to speed up the procurement activities. Monitor implementation of civil works and consultants services, make periodical site visits, hold discussions with local Governors and other stakeholders to seek their support in implementation of the projects, hold discussions with the contractors and consultants concerning project implementation and assist in taking immediate steps/decisions to augment the project implementation. Review the monthly progress reports submitted by various consultants to assess project implementation and take/communicate important decisions of the Employer to the contractors and consultants to avoid any potential delays. Monitor annual contract award and disbursements projects vis-vis the actual performance and take corrective actions. Monitor the implementation of the projects to ensure that the works are executed as per the technical specifications and the requirements set out in the contracts. Maintain regular communication with ADB, MOF, MPW officials and other Ministries to support implementation of the projects.
(iii)
(iv)
(v) (vi)
(vii) b.
The ideal candidate should posses degree or masters degree in civil (Road) Engineering, with around 15 years experience in handling procurement, contract administration and other technical aspects of implementing large road projects funded by the Government or the multilateral agencies (ADB, WB, USAID, EC, etc.). The ideal candidate should
19 road
have a thorough specifications, etc. 2. Deputy Program Director a.
understanding
of
contractual
matters,
The Deputy Program Director shall work in close coordination with the the Program Director. He/she shall assist the Program Director for management and implementation of all ADB financed projects in MPW, his/her duties and responsibilities will include, but not limited to: (i) (ii) Coordinate with ADB and other Donors for implementation of various road projects in MPW. Oversee procurement planning, monitor the procurement of civil works and services to ensure that all the activities are performed as per the plan and take corrective actions to speed up the procurement activities. Monitor implementation of civil works and consultants services, make periodical site visits, hold discussions with local Governors and other stakeholders to seek their support in implementation of the projects, hold discussions with the contractors and consultants concerning project implementation and assist in taking immediate steps/decisions to augment the project implementation. Review the monthly progress reports submitted by various consultants to assess project implementation and take/communicate important decisions of the Employer to the contractors and consultants to avoid any potential delays. Monitor annual contract award and disbursements projects vis-vis the actual performance and take corrective actions. Monitor the implementation of the projects to ensure that the works are executed as per the technical specifications and the requirements set out in the contracts. Maintain regular communication with ADB, MOF, MPW officials and other Ministries to support implementation of the projects.
(iii)
(iv)
(v) (vi)
(vii)
b.
The ideal candidate should posses degree or masters degree in civil (Road) Engineering, with around 10 years experience in handling procurement, contract administration and other technical aspects of implementing large road projects funded by the Government or the multilateral agencies (ADB, WB, USAID, EC, etc.). The ideal candidate should have a thorough understanding of contractual matters, road specifications, etc.
A.
Technical Team 1. Project Manager
3.
The duties and responsibilities of the Project Manager will include, but not limited to: (i) (ii) Handle procurement activities for selection of contractors and consultants, Monitor project implementation; interact with the Consultants on a day-to-day basis concerning implementation and take corrective measures.
20
(iii)
(iv) (v) (vi) (vii) (viii) (ix)
(x) (xi)
Review progress reports submitted by the Consultants to assess project implementation and assist the Program Director in taking/communicating important decisions of the Employer (MPW) to the Consultants to avoid potential delays. Coordinate/liaise with Consultants, Contractors, other Ministries and ADB concerning technical matters of the project. Ensure that the works are implemented in accordance with the technical specifications specified in the contract and interim road standards of MPW. Ensuring that the Supervision Consultants perform in accordance with the contract. Processing of various contractual matters including approval of variations, grant of extension of time, etc. Periodical visits to site to assess implementation of the project and resolve any issue relating to the Contractors/Consultants. Review the recommendations of the Engineer on designs prepared by the civil works contractors, method of implementation, final testing, commissioning of the project, etc., and accord Employers approval. Review the IPCs/invoices submitted by the Consultants/Contractors and recommend for payment. Ensuring compliance of loan/grant covenants
4. The ideal candidate should posses degree or masters degree in civil (Road) Engineering, with at-least 5 years experience in handling procurement, contract administration and other technical aspects of implementing large road projects funded by the Government or the multi-lateral agencies. The ideal candidate should have a thorough understanding of contractual matters, road specifications, etc. 2. Assistant Engineer
5. The Assistant Engineer will assist the Project Manager in the day-to-day project implementation and contract administration matters. The duties and responsibilities will include, but not limited to the following: (i) (ii) Handle procurement activities for selection of contractors and consultants, Monitor project implementation; in reviewing progress reports submitted by the Consultants to assess project implementation and assist the Project Manager in taking/communicating important decisions of the Employer (MPW) to the Consultants to avoid potential delays. Ensure that the works are implemented in accordance with the technical specifications specified in the contract and interim road standards of MPW. Assist the Project Manager in processing various contractual matters including approval of variations, grant of extension of time, etc. Periodical visits to site to assess implementation of the project and resolve any issue relating to the Contractors/Consultants. Review the IPCs/invoices submitted by the Consultants/Contractors and recommend for payment. Ensuring compliance of loan/grant covenants
(iii) (iv) (v) (vi) (vii)
6. The ideal candidate should posses degree or masters degree in civil (Road) Engineering, with at-least 2 years experience in handling procurement, contract administration and other technical aspects of implementing large road projects funded by the Government or
21
the multi-lateral agencies. The ideal candidate should have a thorough understanding of contractual matters, road specifications, etc. 3. 7. PIU Engineer
The duties and responsibilities of the PIU Engineer will include, but not limited to: (i) (ii) Monitor project implementation at site; interact with the Consultants on a day-today basis concerning implementation and take corrective measures. Review progress reports submitted by the Consultants to assess project implementation and assist the PMU in taking/communicating important decisions of the Employer (MPW) to the Consultants to avoid potential delays. Coordinate/liaise with Consultants, Contractors, other Ministries and ADB concerning technical matters of the project. Liaise with provincial / local Governments concerning implementation of the project to resolve any issue relating to the Contractors/Consultants. Ensure that the works are implemented in accordance with the technical specifications specified in the contract and interim road standards of MPW. Ensuring that the Supervision Consultants perform in accordance with the contract. Recommend to PMU with respect to various contractual matters including approval of variations, grant of extension of time, etc. Review the recommendations of the Engineer on designs prepared by the civil works contractors, method of implementation, final testing, commissioning of the project, etc., and accord Employers approval. Review the IPCs/invoices submitted by the Consultants/Contractors and recommend for payment. Ensuring compliance of loan/grant covenants
(iii) (iv) (v) (vi) (vii) (viii)
(ix) (x)
8. The ideal candidate should posses degree or masters degree in civil (Road) Engineering, with at-least 5 years experience in handling procurement, contract administration and other technical aspects of implementing large road projects funded by the Government or the multi-lateral agencies. The ideal candidate should have a thorough understanding of contractual matters, road specifications, etc. B. 9. to: Due Diligence Team 1. Environment Manager The duties and responsibilities of the Environment Manager will include, but not limited
(i)
(ii)
(iii)
In respect of new projects to be taken up, review the project proposals to ensure that the project conforms to the environmental policies of ADB and the Government Ensure preparation of environment management plan in accordance with the environmental policies of ADB and the Government and ensure its implementation during the project Review the reports submitted by the supervision consultants to ensure that the environmental safeguards are in place and that project is being implemented strictly in accordance with the environmental policies of ADB and the Government
22
(iv) (v) (vi)
Periodically visit site to assess implementation of the project and resolve any issue relating to the Contractors/Consultants Collate and finalize environmental guidelines for MPW for adherence in project implementation Ensuring compliance of loan/grant covenants
10. The ideal candidate should possess degree or masters degree, preferably in Environmental Science or similar field, with at-least 5 years experience in dealing with environmental safeguards in project implementation, preferable in implementation of road projects. The ideal candidate should have a thorough understanding of environmental policies of ADB and the Government. 2. 11. to: Resettlement Manager
The duties and responsibilities of the Resettlement Manager will include, but not limited
(i)
(ii)
(iii)
(iv)
(v) (vi) (vii)
In respect of new projects to be taken up, review the project proposals to ensure that the project conforms to the resettlement policies of ADB and the Government, including land acquisition policy/law Ensure preparation of resettlement action plan in accordance with the resettlement policies of ADB and the Government, including land acquisition policy/law and ensure its implementation during the project Ensure that the displaced persons are adequately resettled and compensated in accordance with the resettlement action plan approved by ADB and the Government Review the reports submitted by the supervision consultants to ensure that the resettlement safeguards are in place and that project is being implemented strictly in accordance with the resettlement policies of ADB and the Government Periodically visit site to assess implementation of the project and resolve any issue relating to the Contractors/Consultants Collate and finalize resettlement guidelines for MPW for adherence in project implementation, taking into account the laws and regulations of the Government Ensuring compliance of loan/grant covenants
12. The ideal candidate should posses degree or masters degree, preferably in Social Science or similar field, with at-least 5 years experience in dealing with resettlement safeguards in project implementation, preferable in implementation of road projects. The ideal candidate should have a thorough understanding of resettlement policies of ADB and the Government. C. 13. to: Legal Team 1. Procurement Manager The duties and responsibilities of the Procurement Manager will include, but not limited
(i) (ii)
Prepare procurement plans for various projects of MPW for adherence to the time schedule and to avoid potential delays in procurement For procurement of civil works for various road projects in MPW - prepare and finalize bid documents, BOQ, contract documents, technical specifications,
23
(iii)
(iv) (v) (vi) (vii)
drawings, etc., ensure invitation of bids, evaluate proposals and prepare evaluation reports, finalize the contract documents and assist in signing of contracts For procurement of consultants services for various road projects in MPW prepare and finalize notice for invitation of EOIs, evaluate and prepare evaluation reports, prepare RFP documents, ensure invitation of proposals, evaluate proposals and prepare evaluation reports, finalize the contract documents and assist in signing of contracts Liaise with ARDS, MoF, donors and various directorates of MPW for effective procurement Collate and finalize procurement guidelines for MPW for adherence in project implementation, taking into account the laws and regulations of the Government Maintain all procedure records Ensuring compliance of loan/grant covenants
14. The ideal candidate should posses degree or masters degree, preferably in civil (Road) Engineering, with at-least 5 years experience in handling procurement of civil works and consultants services, preferably for road projects funded by the multi-lateral agencies. The ideal candidate should have a thorough understanding of procurement policies of the donors and the procurement law of the Govt. of Afghanistan. 2. Public Liability and Insurance Manager
15. The duties and responsibilities of the Public Liability and Insurance Manager will include, but not limited to: (i) Review all bid documents/contracts to ensure that standard clauses are incorporated with respect to the requirements for furnishing bank guarantees, contractors all risk policy and other insurance policies such as workers insurance policy, third party liability insurance, etc., and consultants professional liability insurance and other insurance policies. For each contract, make a periodical assessment regarding the validity of all the insurance policies and bank guarantees, alternatively take up the matter with the contractor/consultant to revalidate the same. Assist MPW in filing claims arising out of insurance policies or bank guarantees and follow up with the respective agencies, etc. Monitor the implementation of the projects and ensure that there are no damages to the public property or life. In the event of any damage, take suitable measures to recover damages from the concerned party.
(ii)
(iii) (iv)
16. The ideal candidate should posses degree or masters degree, preferably degree or masters degree in any branch of Engineering, with at-least 5 years experience in handling matters relating to public liability, insurance, bank guarantees, etc., preferably for projects funded by the multi-lateral agencies. The ideal candidate should have a thorough understanding of banking and insurance industry. 3. Translator and Interpreter
17. The duties and responsibilities of the Translator and Interpreter will include, but not limited to:
24
(i)
(ii)
(iii) (iv)
(v) (vi) (vii)
Translate all technical documents, contract documents, relevant contract clauses, bid documents, important notifications, etc. in Dari language as may be required by various staff in PMO/MPW Translate all official communication in Dari for submission to various Ministries, within MPW and translate other administrative communication as may be required. Translate the local instructions, laws, orders, and guidelines in English as may be required from time to time for implementation of road projects by MPW. Maintain an inventory (soft copies or hard copies) of all translated technical documents, contract documents and relevant contract clauses, bid documents, guidelines, etc. for the benefit of the Ministry staff. Provide the services as an interpreter in various official meetings, conferences as may be required by the Minister, Deputy Minister or PMO officials. Supervise and monitor the outsourced translation works, if any, and verify accuracy and correctness of the documents. Any other task assigned by the Deputy Minister or the Program Manager.
18. The ideal candidate should posses degree or masters degree in English literature with sound knowledge of technical, legal, financial and contractual terminologies. He/she should have at-least 5 years similar experience preferably having associated with the projects funded by the multi-lateral agencies. 4. Procurement Liaison Officer
19. The Procurement Liaison Officer will assist the Procurement Manager and his/her duties and responsibilities of the will include, but not limited to assisting the Procurement Manager to(i) (ii) (iii) (iv) Prepare procurement plans, bid documents, RFP, etc., for procurement of civil works and services for various projects of MPW Liaise with ARDS, MoF, donors and various directorates of MPW for effective procurement Collate and finalize procurement guidelines for MPW for adherence in project implementation, taking into account the laws and regulations of the Government Maintain all procedure records
20. The ideal candidate should posses degree (college or school) with at-least 2 years experience in handling procurement of civil works and consultants services, preferably for road projects funded by the multi-lateral agencies. The ideal candidate should have a thorough understanding of procurement policies of the donors and the procurement law of the Govt. of Afghanistan. D. Financial and Information Management Team 1. Finance Manager
21. The Finance Manager shall have overall responsibility for financial management of the ADB financed projects. The duties and responsibilities will include, but not limited to(i) Ensure maintenance of financial accounts and adequate records in respect of the ADB financed projects,
25
(ii)
(iii) (iv) (v)
(vi) (vii) (viii) (ix) (x) (xi)
Prepare annual contracts award and disbursements projections (ADB financial year) in consultation with the respective Project Managers and Supervision Consultants, Prepare annual budgets for the projects (Afghan year) ) in consultation with the respective Project Managers and Supervision Consultants, With the assistance of the Project Accountant, seek clearance of the budget allotment from the Ministry of Finance, Review the conditions of the contracts, especially financial covenants, entered into between MPW and the contractors/consultants to ensure compliance, review the IPCs/invoices submitted by the Consultants/Contractors and recommend for payment, With the assistance of the Project Accountant, maintain financial records for disbursements under various contracts and loans / grants, Maintain imprest account and seek replenishment as and when needed Maintain Bank Guarantees (BG) and seek extension of the BG as and when needed or take up the matter for encashment of BG Prepare monthly expenditure statements for various projects under various loans/grants Prepare project accounts and coordinate financial audit Ensuring compliance of loan/grant covenants
22. The ideal candidate should possess preferably a college degree, having at least 5 years experience, preferably in a similar position handling financial accounting, disbursements, contract management, handling imprest account, preparation of budget, preparation of financial reports, preparation of project accounts and financial statements, coordinate audit of financial statements/project accounts, etc. The candidate should have a thorough understanding of ADBs financial management requirements for implementation of ADB (or other donor) financed projects, contract management (preferably FIDIC Conditions of contract), with good written and oral communication skills in English and having computer skills (knowledge of working on MS Excel and MS Word). 2. Project Accountant
23 The Project Accountant will assist the Finance Manager in the day-to-day financial/accounting matters. The duties and responsibilities will include, but not limited to(i) Maintain Books of Accounts, Cash Book, Vouchers, fixed assets register, etc., in respect of the projects under implementation by the Project Implementation Unit (PIU) Assist the Finance Manager in scrutinizing the monthly bills of the contractors/consultants and process for payment Disburse monthly salaries to all staff, make payments for local purchases, etc. Prepare payment vouchers in respect of the payments made and receipt vouchers Record all transactions in the books of accounts (i.e., cash book, imprest fund account, contract ledgers, financial statements, etc.) Prepare the Withdrawal Applications for payments out of loan / grant under the direct payment procedures Any other related work assigned by the Finance Manager.
(ii) (iii) (iv) (v) (vi) (vii)
26
24. The ideal candidate should possess preferably a college degree, having at least 2 years experience, preferably in a similar position with good written and oral communication skills in English and having computer skills (knowledge of working on MS Excel and MS Word). 3. IT Manager
25. The IT Manager will assist the PMU Staff in maintaining IT related services and equipments, network management and providing training to PMU Staff. The duties and responsibilities will include, but not limited to the following(i) Provide network solution for PMU including but not restricted to: Domain organization, AD structure, remote control/support, firewall, antivirus, and maintaining internet network in PMU. Provide general IT support - responsible for all IT tasks for PMU. Assist PMU in assessing the requirements of IT equipments (Computers, Printers, etc.) and assist in procurement of such IT equipments. Focus on proactive problem solving; finding and delivering permanent solutions to problems occurring on a regular basis, instead of providing emergency or reactive support and spending time and energy on troubleshooting the same problems. Should provide report/manual on troubleshooting and the most common network/computer related problems. Adopt a comprehensive work plan of forthcoming activities. Networking installation as LAN / WAN in PMU including liaison with internet service providers (ISP). Ensure implementation and configuration of different software, including antivirus installation. Installation and configuration of Windows and email configuration. Updating IT Inventory, completing the IT item damage report, and managing hand-over of IT assets in conjunction with the PMU Staff, managing IT stock, taking repairable IT items to selected workshop.
(ii) (iii) (iv)
(v) (vi) (vii) (viii) (ix) (x)
26. The ideal candidate should possess preferably a college degree, having at least 2 years experience, preferably in a similar position (preferably with international organizations). Should have previous experience with Windows based networks, Windows Server and Domain/Active Directory. 4. Administration Assistant
27. The Administration Asst. will work with a team of Project Managers and Finance Manager and shall assist the team in the day-to-day administration and office management. The duties and responsibilities will include, but not limited to(i) (ii) (iii) (iv) (v) (vi) Office Management Registering all incoming and outgoing documents/mails related to the projects. Management of all networks, computers, printers, communication equipments and photocopier machine. Management / maintenance of files, inventory, and office transport facilities, maintenance of attendance register, etc. Sending and receiving of official documents from/to the related agencies. Purchase/maintenance of office supplies and stationary, etc.
27
(vii)
Any other related work assigned by the Project Managers and Finance Manager.
28. The interested candidate should possess preferably a college degree, having at least 2 years experience, preferably in a similar position handling office administration and management, coordination and liaison with various ministries, providing necessary advisory services, etc., with good written and oral communication skills in English and having computer skills (knowledge of working on MS Excel and MS Word). E. Results and Research and Development Management Team 1. Results Management Manager
29. The Results Management Manager will coordinate all the matters relating to portfolio management of ADB financed projects being implemented by MPW and assessing the performance of the projects. He/she shall assist the Program Director and Deputy Program Director in the following(i) (ii) Identifying and implementing innovative approaches for project implementation Oversee and support improvement of results monitoring and management in MPW and work within a framework of policies, principles and goals, applying a high degree of freedom in selection of work methods Assisting in introducing results-based development planning and budgeting, monitoring and evaluation Assist in complying to loan/grant covenants and to safeguard policies of ADB Evaluate the performance of the projects and share best practices and lessons learned Develop and lead the implementation of knowledge management plans to increase knowledge sharing among PMO/MPW staff Any other related work assigned by the Program Director and Deputy Program Director.
(iii) (iv) (v) (vi) (vii)
30. The interested candidate should possess a university degree in business administration, economics or related fields; preferably at post graduate level or its equivalent, suitability to undertake the responsibilities mentioned above at the required level having at least 12 years of combined professional experience in development planning, policy analysis, strategic management, results-based management, and project and portfolio management, excellent oral and written communication skills in English and international experience working. 2. Research and Development Manager
31. The duties and responsibilities of the Research and Development Manager will include, but not limited to(i) Review the technical specifications / standards for construction, maintenance and other works and develop standard technical specifications for adoption by MPW for implementation of various works. Update the technical specifications on a periodical basis and organize seminars for MPW staff to provide an exposure to the technical specifications/standards Carry out analysis of material testing methods and other practices adopted by the contractors and consultants and suggest best international practices. Develop Works Manual or other manuals standardizing the systems and procedures for implementation in MPW
(ii) (iii) (iv)
28
32. The ideal candidate should posses degree or masters degree in civil (Road) Engineering, with at-least 5 years experience in handling similar tasks and other technical aspects of implementing large road projects funded by the Government or the multi-lateral agencies. The ideal candidate should have a thorough understanding of road specifications, etc. F. Public Relations and Marketing Team 1. Public Relations Officer
33. The duties and responsibilities of the Public Relations and Marketing Officer will include, but not limited to(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) Monitor publicity and conduct research to find out the concerns and expectations of the potential stakeholders Planning, developing and implementing PR strategies in MPW; Liaising with and answering enquiries from media, individuals and other organizations, on implementation of projects; Developing and distributing press releases to targeted media; Collating and analyzing media coverage; Developing in-house magazines, case studies, speeches, articles and annual reports; Preparing and supervising the production of publicity brochures, handouts, direct mail leaflets, promotional videos, photographs, films and multimedia programs; Organizing events including press conferences, exhibitions, open days and press tours; Maintaining and updating information on the website; Commissioning market research; Fostering community relations through events such as open days and through involvement in community initiatives; Managing the PR aspect of a potential crisis situation.
34. The ideal candidate should posses degree or masters in English, public relations or equivalent, with at-least 5 years experience in handling similar tasks, excellent oral and written communication skills in English and international experience working.
SAMPLE OF FINANCIAL REPORTING

Ministry of Public Works Project Management Unit (ADB) Control Register of Claims received from the Contractors/Consultants Loan / Grant No. 2140 Pkg. MPW/333/Cont1 Contractor Processing in PMU/MoF Date of signature by Minister / Dy.Minister (Public Works)
Date of Signature by Authorized Signatories in MOF (i.e., Withdrawl Application Date) China Railway
Final Contract Value ($) ADB Cumulative Disbursement (US$)
21,843,500 Remarks Balance to be Disbursed (US$)
IPC/ Bill No.
Month
Date of Certification by the Date of Engineer (IPC)/Date Receipt in of Invoice PMU/MPW
Net Value Approved by MPW for Payment (US$)
Cumulative Approved Payments (US$)
Balance to Withdrawal be certified Application under the No. Contract (US$)
Date of despatch to AFRM (ADB)
Amount Paid (US$)
Value Date
MA 2 3 4 5 6 7 8 8 8 9 10 11 12 13
July'06 Upto 30 Apr' 07 Upto Jun'07 Upto Jul'07 Upto Sep'07 Upto Oct'07 Upto Dec'07 Upto Dec 07 22-May-07 8-Jul-07 26-Aug-07 4-Oct-07 18-Nov-07 21-Jan-08 29-Mar-08 5-Apr-08 3-Jun-07 15-Jul-07 28-Aug-07 14-Oct-07
3,276,525.00 966,987.00 1,516,486.09 1,461,625.55 1,254,260.62 1,024,115.00
3,276,525.00 4,243,512.00 5,759,998.09 7,221,623.64 8,475,884.26 9,499,999.26
18,566,975.00 17,599,988.00 16,083,501.91 14,621,876.36 13,367,615.74 12,343,500.74 11,308,586.71 10,298,745.28 10,277,923.81 10,267,513.07 9,155,254.07 8,452,006.27 7,998,251.42 7,309,483.22 6,429,899.22
R0004 R0016 R0023 R0031 R0036 R0043 R0046 R0045 R0048 R0047 15-Jun-08 10-Jun-07 17-Jul-07 18-Sep-07 18-Oct-07 22-Nov-07
30-Jul-06 18-Jun-07 28-Jul-07 1-Oct-07 28-Nov-07 10-Dec-07
31-Jul-06 18-Jun-07 29-Jul-07 2-Oct-07 28-Nov-07 10-Dec-07
3,276,525.00 20-Nov-06 966,987.00 3-Jul-07
3,276,525.00 18,566,975.00 4,243,512.00 17,599,988.00 5,759,998.09 16,083,501.91 7,221,623.64 14,621,876.36 8,475,884.26 13,367,615.74 9,499,999.26 12,343,500.74 10,534,913.29 11,308,586.71 11,544,754.72 10,298,745.28
1,516,486.09 13-Aug-07 1,461,625.55 1,254,260.62 1,024,115.00 1,034,914.03
1,034,914.03 10,534,913.29 1,009,841.43 11,544,754.72 20,821.47 11,565,576.19 10,410.74 11,575,986.93 1,112,259.00 12,688,245.93 703,247.80 13,391,493.73 453,754.85 13,845,248.58 688,768.20 14,534,016.78 879,584.00 15,413,600.78
24-Jun-08
25-Jun-08
1,009,841.43 20,821.47 10,410.74 1,112,259.00 703,247.80 453,754.85 688,768.20 879,584.00
11,565,576.19 10,277,923.81 11,575,986.93 10,267,513.07 12,688,245.93 13,391,493.73 13,845,248.58 14,534,016.78 15,413,600.78 9,155,254.07 8,452,006.27 7,998,251.42 7,309,483.22 6,429,899.22
29
30
SAMPLE OF PROJECT REPORTING

STATUS OF "ADB FUNDED" ROAD PROJECTES IN MINISTRY OF PUBLIC WORKS
STATUS :July-09
NAME OF CONSULTANT CUMULATIVE FINANCIAL PROGRESS ADB and AFG fund IN MILLION US$ CIVIL WORKS 10 11 CONSULT
FUNDING AGENCY
LENGTH IN KM
S/N NAME OF WORK O
REV. Target of Completion COMP.
NAME OF CONTRACTOR
Committed Contract Value in Funds Millon Million US$
Revised CONTRACTVALUE IN MILLION US$
ORIGINAL DATE OF Completion
CUMULATIVE PHYSICAL PROGRESS
REMARKS
loan
Civil Work
Consul tancy
CIVIL WORKS 6
COSULTA COMMENCEM NCY ENT 7 8
TARGET %
ACTUAL %
2 Kandahar - Spin Boldak Road (section 061.4km)
12 Paid by ADB directly
13
14
15
16
17 61km Asphalt work Completed
ADB/ JFPR, 25.00 61.4 KUWAI JFPR 9024 T ADB Canad a
24.173
0.779
MAY 31.2003
AUG 29.2004
30 Nov.05
22. 64
100
100
SHELADIA BSC-C&C J.V. ASSOCIATE S USA
Kandahar - Spin Boldak Road 42.1 (section 61.4-103.5 km)
12.800
11.620
0.500
7-Mar
8-Mar
31-Dec
10.02
0.159
100%
98%
Hamkar Construction
MPW
34.5 Asphalt work completed
Pul e Khumri to Balkh with Link from Naibabad to Hairatan-Package 149
265
ADB JFPR
28.707 LOAN -70 .0 million (NO.1997 AFG) 20.0 Grant(JFPR- 9037) Total 90.0 36.157
1.583
56.000
3.305
9-May-04
8-May-06
2008/09/30 16 /Dece/2008
46.4
2.7
100%
100.00%
SAMWHAN SOUTH KOREA
SHELADIA ASSOCIATE S USA
265km Asphalt work Completed
Balkh via Sheberghan to Andkhoy Package 150
182
ADBJFPR
1.415
38.757
1.835
9-May-04
8-May-06
8-Nov-06
36.98
1.59
100
100
SAMWHAN SOUTH KOREA
MINCONSUL T MALAYSIA
Andkhoy Qaisar Road (Package 2Shirintagab to Almar) Andkhoy Qaisar Road -(Package 1Almar to Qaisar)
70
ADB
Loan $80.00 - 2140AFG
28.177
NA 38,178.000
28Aug. 06
27-Aug-08
9-Aug
16.7
1.830
72.00%
70.940%
SAMWHAN CORPORATI ON
SMEC (Australia)
Andkhoy Qaisar Road (Package 3 Andkhoy to Shirintagab)
85
ADB
26.572 26.572 2.750
28Aug. 06
27-Aug-08
NA
19.200
100.00%
100.00%
SAMWHAN CORPORATI ON
in porgress
55
ADB
21.843 30,368.000
28Aug. 06
27-Aug-08
9-Jun
14.5
76.21%
70.04%
China Railway Shisiju Group Corporation
in porgress
31
PROPOSED ACCOUNTING AND RECORDING PROCEDURES 1. The accounting procedures for MPW should be as follows and are shown in the figure below: (i) (ii) (iii) (iv) (v) (vi) (vii) select and analyse the economic and financial transactions record the transactions document the transactions adjust the accounts close the accounts check the accounts prepare the financial statements Figure SAC5.1: Accounting Procedures
Selection
Recording
Statements
Checking
Closure
Adjustment
Documentation
2. The recording procedures for MPW should be as follows and are shown in the figure below: (i) (ii) (iii) (iv) (v) (vi) document voucher based on original receipts fill in detailed account based on original receipts record in journals of cash and bank accounts based on vouchers prepare summary of voucher based on vouchers prepare general account based on summary of voucher check the balance of journal, detailed account with general account at the end of each month
32
Figure SAC5.2: Recording Procedures
Journals of cash and bank account
Original receipts
Vouchers
Summary of vouchers
Summary of accounts
Detailed Accounts
______ ____
Filling in Checking
AFGHANISTAN RAILWAY DEVELOPMENT PROJECT
SHORT LAND ACQUISITION AND RESETTLEMENT PLAN (SLARP)
HAIRATAN TO MAZAR-E-SHARIF RAILWAY PROJECT
Ministry of Public Works Afghanistan

August 2009
CONTENTS A. INTRODUCTION .............................................................................................................................................1 CHAPTER 1 : IMPACTS-AH/AP CENSUS .........................................................................................................2 CHAPTER 2 : LEGAL AND POLICY BACKGROUND........................................................................................3 CHAPTER 3 : CONSULTATION .........................................................................................................................6 CHAPTER 4 : IMPLEMENTATION ARRANGEMENTS .....................................................................................7 CHAPTER 5 : GRIEVANCE REDRESS PROCESS...........................................................................................9 CHAPTER 6 : SLARP IMPLEMENTATION ......................................................................................................10 CHAPTER 7 : COSTS ........................................................................................................................................11 CHAPTER 8 : SUPERVISION AND MONITORING .........................................................................................11
LIST OF ACRONYMS ADB Af AF AH AP DMS EA EMA GOA Ha IA IR ISC Km LAR LARP M&E MPW MOF NGO NOC O&M PIO PMO PPTA RP SLARP US$ Asian Development Bank Currency of Afghanistan Affected Family Affected Household Affected People Detailed Measurement Survey Executing Agency External Monitoring Agency Government of Afghanistan Hectare Implementing Agency Involuntary Resettlement Implementation and Supervision Consultant Kilometer Land Acquisition and Resettlement Land Acquisition and Resettlement Plan Monitoring and Evaluation Ministry of Public works Ministry Of Finance Non Government Organization No-objection Certificate Operation and Management Project Implementation Office Project Management Office Project Preparatory Technical Assistance Resettlement Plan Short Land Acquisition and Resettlement Plan United States Dollar
GLOSSARY Affected Family: The family affected by the project. Affected People: The people who affected by the project for land acquisition or relocation and that causes loss of income and livelihood or any other type of loss related to social, cultural and infrastructure facility Compensation: Payment in cash or in kind as cost of replacement of their assets, resources and income opportunities that affected due to the project. Cut-off date: The date after which affected people will not be considered eligible for receiving compensation. Detailed Measurement Survey: The detailed inventory of losses that is completed after detailed design and after marking of project boundaries on the ground. Entitlement: Range of measures comprising of compensation, income restoration, transfer assistance, income substitution, Income Restoration: The process of re-establishing APs income to the level s/he enjoyed prior to relocation Inventory of Losses: The pre-appraisal inventory of assets as a preliminary record of affected and/or lost assets Jireeb: Local measurement of area. Approximately 5 Jireebs are equivalent to one hectare Land Acquisition: The process whereby a person is compelled by a government agency to alienate all or part of the land the person owns or possesses to the ownership and possession of the government agency requiring the land for public purpose in return for compensation Livelihood: The total package of earnings either in cash or kind a person generates for his/her survival Malik: A community leader. No-Objection Certificate: The certificate issued by ADB after conducting a comprehensive audit to ensure that APs and their assets have been completely removed from the site to begin civil work Non-titled: Those who have no recognizable rights or claims to the land that they are occupying. Also, includes people using private or state land without permission, permit or grant i.e. those people without legal title to land and/or structures occupied or used by them. ADBs policy explicitly states that such people cannot be denied compensation for the land that they occupy Poor: Those falling below the official national poverty line (equivalent to 2,350 calories per day) of Afghani 700 per person per month (2009) Rehabilitation: Compensatory measures provided under the policy framework on involuntary resettlement other than payment of the replacement cost of acquired assets Relocation: Physical relocation of an AP from a pre-project location of his/her residence Shura: The formal institution established for coordination and implementation of all development activities including conflicts resolution at the community level.
Supplementary Appendix D
SHORT LAND ACQUISITION AND RESETTLEMENT PLAN

A. A.1 INTRODUCTION General
1. The project entails the construction of a new railway from the Afghan-Uzbek border to near Mazar-e-Sharif Airport. The whole alignment is 73.47 km long. This Short Land Acquisition and Resettlement Plan (SLARP) details the impacts of alignment. A map is included next page. 2. This SLARP has been prepared by the Ministry of Public Works (MPW) in order to ensure that the impacts of the Project will be compensated in accordance to the requirements of the ADB Policy on Involuntary Resettlement. The document has been approved by the relevant Afghan authorities and fits relevant Afghani laws and the ADB involuntary Resettlement Policy. The two main objectives of the SLARP are as follows: (i) (ii) A.2 Assess the loss of land and non-land assets, and loss of income and livelihood opportunities; Assess the preliminary cost of SLARP.
SLARP Finalization and LAR-related Conditionalities to Project Implementation
3. This SLARP is based on a final impacts corridor. However if in the course of detailed design the corridor is moved and new impacts will occur it will have to be updated and re-approved by ADB prior to its implementation. Based on ADB policy and practice, project appraisal and project implementation will be subjected to the following LAR-related conditions: (i) (ii) Project appraisal: preparation/disclosure of a Short Land Acquisition and Resettlement Plan (SLARP). Initiation of Civil Works: full delivery of the compensation program certified by a compliance report indicating that this has been carried out in compliance with the SLARP provisions.
CHAPTER 1 : IMPACTS-AH/AP CENSUS

4. The alignment mostly passes through government land, which is unused, and its taking does not cause impacts. Only 880-m2 private land in two plots is affected at Qalinbafans Camp village. B.1 5. Affected Land The affected land will have to be compensated. Table-1 describes the impacts. Table-1 : Land Impacts
Plot 01 02 Type of Land Residential Residential Total Area Area in m2 280 600 880
Affected Families and People 6. In all two families and 15 people will be affected. Table-2 and Tablle-3 separately describe the details socioeconomic conditions of each family. Table-2: Household 1 Composition
SL Name M/F Married Education Occupation Monthly Income Relation with HHH
1 2 3 4 5 6. 7
Abdullah Wife Mother Ahmad Naeem Yassen Daughter
M F F M M M F
Yes Yes Yes Yes No No No
primary Nil Nil Nil Nil Student Nil
Mason House Wife House work Labor Nil Student Nil
45USD Nil Nil 30USD Nill Nil Nil
HHH Wife Mother Son Son Son Daughter
Table-3: Household 2 Composition

SL Name M/F Married Education Occupation Monthly Income Relation with HHH
1 2 3 4 5 6 7 8
Hasim Wife Mother Mohammad Tawab Gulab Faisal Rona Rona
M F F M M M F F
Yes Yes Yes No No No No No
Primary Nil Nil Primary Student Nil Student Nil
Business House Wife Nil Worker Nil Nil Nil Nil
60USD Nil Nil 35 USD Nil Nil Nil Nil
HHH Wife Mother Son Son Son Daughter Daughter
CHAPTER 2 : LEGAL AND POLICY BACKGROUND

7. There are no laws or legislation in Afghanistan that specifically address matters related to involuntary resettlement (IR). However, there are four important laws and policies that provide the basis for acquisition of land for public purpose. These are: (i) (ii) (iii) (iv) The Law on Land Expropriation (8 October 2000); The Land Affairs Management Law (2008); Amendment to The Law of Land Expropriation (3 April 2005); The Land Policy (2006)
8. The comparison of the provisions contained in the above laws with that of ADBs requirement for involuntary resettlement reveals a number of gaps which will be overcome as follows: That LAR should be minimized where possible. The design consultants are required to critically examine the need for LAR and thereby to avoid and/or minimize where possible; That a comprehensive consultation and participation plan is prepared to involve APs in LAR process. The APs should be consulted throughout the process and that they be disclosed with all relevant information; A comprehensive assessment of all affected structures, houses, trees, gardens, plants, crops, etc. is to be undertaken based on the market price and that all APs will be fully compensated prior to their land acquisition; Rehabilitation to ensure that at the minimum APs pre-livelihood standard is maintained; Income losses, livelihood losses and other opportunities will be assessed to include in the compensation and rehabilitation package; All losses to be assessed at replacement costs without allowing for depreciation of buildings and fixtures. APs will be allowed to remove construction materials free of charge; That a full and fair assessment of all land owners/users to be evaluated before a cut off date and the date of census is considered as the cut-off date. Entitled APs will be those with land title, with tax receipts, with formal or informal deeds, or with traditional rights to be vouched by the local jirgas or Community Development Councils. APs will be fully consulted in determining price for their land, property, structures, crops, trees, etc; That a grievance redress process is properly implemented. ELIGIBILITY FOR COMPENSATION: The guiding principle of the SLARP is to ensure all APs/AHs, directly or indirectly, are adequately compensated for their loss of income, land, business, wages, livelihood and other losses. They will also receive rehabilitation assistance as appropriate. There are several elements that determine the eligibility and entitlement of the APs for compensation. These elements are described in the proceeding paragraphs. APs eligible for compensation and rehabilitation assistance are basically of four groups: (i) All APs losing land whether titled, with tax receipts, formal or informal deeds, or with traditional rights to be vouched by the local Jirgas or Community Development Councils. (ii) Sharecroppers and tenants, whether registered or not (iii) Owners of buildings, whether permanent or temporary, trees, orchards, crops, plants or other objects attached to the land, and (iv) APs loosing income, salaries, wages, business and other forms of livelihood. 10. All AH/AP settling in affected areas after the cut-off date (15 August 2009) and who cannot prove that they were not included in the impacts assessment will not be eligible for compensation. Following the
9.
delivery of compensation all APs will be given three months to vacate their properties and remove their houses if they wish to retain salvaged materials. Compensation entitlements are defined in Table-4. Table-4: Entitlement Matrix
Loss Type Residential land Application Residential land in ROW AP Definition Owner of residential land Entitlement Cash compensation at replacement/ market value for residential land Expected Results Compensation for lost land
CHAPTER 3 : CONSULTATION
11. Consultation sessions were conducted on 20 July, 2009, 27 July 2009, 30 July, 2009, and 8 August 2009 at Taza Omed, Gor-e-More, Qalinbafans Camp and Hairatan respectively. Issues discussed in the consultation sessions are merits, demerits of railway alignment, land acquisition and resettlement issues, etc, the consultation sessions were open for all to share and exchange views, ideas and experiences. Decisions and Recommendations of the Consultation Sessions are as follows: Railway must go through government land; agriculture land should not use because it is limited for production; affected people should get cash compensation of any affected property including land so that they can use the money according to their choice. They expressed their interest to establish railway because they will have safe transportation, commodities in cheaper price and better scope for business. In conclusion of each consultation sessions local leaders and community people welcomed this railway intervention as they believe this investment will contribute in their over all socio-economic development.
Consultation held with the people of Qalinbafans Camp village on 14 August 2009 to finalize the assessment of affected land, present position and ownership of land and its price. Discussion held with the Honorable Deputy Minister, Ministry of Public Works, on 14 August 2009. Main issues discussed regarding affected land, prices of land and the process of compensation. 12. Disclosure. This SLARP in English will be posted on the ADB website. The SLARP translated in Dari will be disclosed in the affected villages and will be sent to the two AHs.
CHAPTER 4 : IMPLEMENTATION ARRANGEMENTS

13. The main institutions that will be involved in SLARP implementation are the MPW, Ministry of Finance, provincial and district governors, district property office (municipality), other district agencies (Agriculture, Cartography, Land Affairs Management), court, and community Shura. An Organogram is provided in Figure-1. 14. MPW: MPW has overall responsibility on SLARP preparation and implementation. The PMO, the Implementation/Supervision Consultants (ISCs) and counterpart staff are responsible for the dat-to-day SLARP management and monitoring. The Implementation and Supervision Consultants will analyze the cadastral maps, carry out DMS, identify vulnerable groups, and assist relevant agencies in conducting compensation negotiation with the APs, up-date SLARP, in close collaboration and consultation with the district governor and relevant line agency staff. The ISCs will submit the updated SLARP to the MPW for approval. 15. Local Governments: Local government agencies involved in updating and finalization of the SLARP are the property office of the district municipal authorities, and the local Land, Agriculture and Cartography offices. The district coordination committee that will function within PIO will provide an effective mechanism for inter-agency coordination and to officially endorse surveys. The composition of the district coordination committee includes the district governor, a representative of each relevant agency, ISCs and the implementing NGO. This committee will have the overall responsibility for supervision of land and property valuation, acquisition, and approval of compensation rates. The individual agencies will exercise their functions as provided for in the relevant laws, coordinated by the district committee 16. Central Government: The agencies at central government level are the MPW who will have the overall responsibility for agency coordination and lead the entire process as well as the final approval of the up-dated SLARP prior to its implementation. The other offices that will closely work with MPW include Central Land Affairs Management Department, the local government including property offices, the Ministry of Agriculture, Irrigation, and Livestock (MAIL), Ministry of Justice and the Ministry of Finance, the latter as the Executing Agency (EA). These offices will provide advice on SLARP up dating and its implementation, and assist resolve matters that district teams are not able to resolve. 17. Shuras: These informal groups will assist SLARP implementation for what concerns definition of entitlement and eligibility to compensation, public consultation and complaint and grievances.
Figure 1: Organizational Chart for Project Implementation
Government ofAfghanistan
ADB
EMA MPW
PMO
(Consultants and counterpart staff)
Provincial & District Staff of MPW
PIO (District
Coordination Committee)
Local Government Agencies
SHURA Men Women
AP
CHAPTER 5 : GRIEVANCE REDRESS PROCESS

18. The Project has established a grievance redress process to ensure the respect of this SLARP provisions and avoid potential civil works delays. Table -5 indicates steps and mechanisms of grievance resolution. Table 5: Grievance Resolution Process
1. First, complaints resolution will be attempted at district level with the involvement of the Shuras, the senior district property supervisor, the district governor and implementation NGO. 2. In absence of settlement, APs may lodge a complaint to the PMO which will decide the case within 15 days. 3. If the PMO decision is unacceptable to the APs, they can register the complaint directly to the MPW within 1 month of receiving a response from the PMO with documents supporting their claim. The MPW will respond within 15 days of registering the complaint. The MPWs decision must be in compliance with the provisions of this SLRAP 4. Should a grievance remain unsolved after the above action the APs may approach the appropriate court of law for its resolution. The AP will be facilitated in this process by the implementation NGO
10
CHAPTER 6 : SLARP IMPLEMENTATION

19. SLARP implementation will initiate as soon the Grant is signed and its conclusion will be condition to initiate civil works. A detailed schedule of SLARP preparation implementation is provided in Figure-2. Figure-2: SLARP Preparations and Implementation Schedule
Task July SLARP preparation SLARP Approval SLARP disclosure Grant Approval Contracts signing/final design SLARP implementation Monitoring/Compliance report Aug. 2009 Sept. Oct. Nov. Dec. Jan. Feb. 2010 March April May
11
CHAPTER 7 : COSTS
20. The land acquisition and resettlement cost includes estimated current market price of affected asset. The price of land for compensation has been calculated based on consultation with local people and as agreed with government. Table -6: Estimates for SLARP implementation
Item 1 2 Residential Land Contingency @20% Total Unit Cost (AFG) 225 Quantity (sqm.) 880 Cost (AFG) 198,000 39,600 237,600 Cost (US$) 3960 790 4,750
CHAPTER 8 : SUPERVISION AND MONITORING

21. The implementation of this SLARP will be monitored by the PMO who will directly provide the compensation to the AHs. An Independent Monitoring Agency (IMA) will be hired to validate the implementation of this SLARP. The IMA will write a short compliance report indicating whether the compensation was provided in line with the provisions of this SLARP. The compliance report will be a condition for ADB to provide No Objection Letter to the start of civil works implementation.
Environmental Assessment Report
Initial Environmental Examination Document Stage: Draft Project Number: 42533 August 2009
Afghanistan: Hairatan to Mazar-e-Sharif Railway Development Project
The initial environmental examination document is that of the borrower. The views expressed herein do not necessarily represent those of ADBs Board of Directors, Management, or staff, and may be preliminary in nature.
CONTENTS Page I. INTRODUCTION A. Environmental Clearance Requirements 1. Government Environmental Laws, Regulations and Guidelines PROJECT DESCRIPTION A. Type of Project B. Need for the Project C. Location, Size, and Components D. Schedule DESCRIPTION OF THE ENVIRONMENT A. Introduction 1. Location, Topography and Soils 2. Geology and Seismicity 3. Climate and Air Quality 4. Water Quality 5. Ecological Resources 6. Economic Development 7. Industries 8. Infrastructure facilities 9. Transportation 10. Land use 11. Agricultural development, mineral development, and tourism facilities 12. Social and Cultural Resources SCREENING ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES A. Physical Environment 1. Soils and Materials 2. Air Quality 3. Noise and Vibration B. Socioeconomic Environment 1. Proper Construction Practices 2. Health, Safety and Hygiene 3. Hazardous Materials & Waste Management INSTITUTIONAL REQUIREMENT AND ENVIRONMENTAL MONITORING PLAN A. Institutional framework for Environmental Management B. Environmental Monitoring Program C. Environmental and Social Management Training PUBLIC CONSULTATION AND INFORMATION DISCLOSURE FINDINGS AND RECOMMENDATIONS CONCLUSIONS 1 1 1 4 4 4 4 5 6 6 6 6 7 7 7 7 8 8 8 8 9 9 11 11 11 12 12 13 14 14 14 15 15 16 16 17 19 19
II.
III.
IV.
V.
VI. VII. VIII.
APPENDIXES 1. Table 2: Summary of Environmental Mitigation Measures 2. Table 3: Summary of Environmental Monitoring Requirements
20 23
Supplementary Appendix E
I.
INTRODUCTION
1. Afghanistan has a number of road and rail connections with neighboring countries. There are eight major road connections with neighboring countries which connect with Iran, Pakistan, Tajikistan, Turkmenistan and Uzbekistan. All are in poor condition except for the Herat-Islam Qala and Kunduz-Shirkhan Bandar routes. Others are currently under rehabilitation or about to be rehabilitated. Three possible regional railways can be developed, these are the Peshsawar to Kandahar route, the Sangan border (Iran) to Heart route and the Termez (Uzbekistan) to Hairatan route. The railway line between Sangan and Herat is currently under construction. The extension of railway line from Hairatan to Mazar-e-Sharif is a top priority of the Afghan government and also fits with the 20092013 ADB's Country Partnership Strategy that places development of national roads and railways as priority. This project will fund the construction of the Hairatan Mazar-e-Sharif line. 2. At present the Uzbekistan Afghanistan rail link ends at the Hairatan terminus. Constructing a new link to Mazar-e-Sharif with possible extension to Herat will remove physical constraints and create alternative competitive routes for trade between Afghanistan and its neighbors and also third countries. The railway link is part of the CAREC Program and fits with Transport Corridors 3 and 6, which connect Central Asia to South Asia, to the Caucasus and to the Middle East. 3. This Initial Environmental Examination (IEE) presents the environmental assessment of the Project. The IEE has been prepared through reviewing existing reports, data analysis, and reviewing impact of other similar projects in other Asian countries. The environmental impact was considered for physical, environmental, ecological, social and cultural resources within the project area. The project is still in the early stages of the concept design and so there are a number of project components that are not clearly defined at this stage. In order to ensure that all components of the project have included the necessary mitigation measures and environmental management requirements during the development of the detailed design an additional stage to the assessment process shall be included. Once the detailed design is nearing finalization an environmental design review will be undertaken by the design and supervision consultant to assess the project against the requirements set out in this IEE. A. Environmental Clearance Requirements
4. Under the Asian Development Bank's (ADBs) Environmental Assessment Guidelines (2003) the proposed project has been categorized as B for environmental purposes and an IEE has been prepared. The assessment has been carried out to ensure that the potential adverse environmental impacts are appropriately addressed in line with ADBs Environmental Policy (2002), and Environmental Assessment Guidelines (2003). This IEE has also been prepared to meet the requirements of the Islamic Republic of Afghanistan for environmental assessment. 1. Government Environmental Laws, Regulations and Guidelines
5. The Governments regulation on environmental impact assessment is based on the Environmental Act of Islamic Republic of Afghanistan (Gazette No. 873), dated 29 Jadi, 1384 (19 January 2006). The National Environmental Protection Agency (NEPA), as an independent institutional entity, is responsible for coordinating and monitoring conservation and rehabilitation of the environment, and for implementing this act. Article 16 and 17 of Chapter 3 of the
Environmental Act describes the process of preparing a preliminary assessment, an environmental impact statement, and a comprehensive mitigation plan to be conducted by the proponent of each project. Article 21 mentions public consultation is required for all the projects. Article 18 describes the approval procedure of environmental impact assessment. The NEPA will appoint an EIA Board of Experts to review, assess and consider applications and documents submitted by the proponent. Acting on the advice of the EIA Board of Experts, NEPA shall either grant or refuse to a grant permit in respect of the project. A permit granted will lapse in the event that the proponent fails to implement the project within three years of the date of which the permit was granted. Article 19 describes the appeal procedure. Any person may within thirty (30) days of the granting or refusal of a permit, appeal the decision to the DirectorGeneral of the NEPA. The Director-General shall review the appeal application and thereafter make an appropriate decision. Should the appellant wish to appeal the Director-Generals final decision, the matter shall be referred to the relevant court. Figure 1.1 - Project Location
Figures 1.2 - 1.4 Project Location

HAIRATAN
AMU DARYA AMU DARYA
= = Rail Alignment Rail Alignment = Rail Alignment
= Rail Alignment
AMU DARYA
HAIRATAN
A76 CROSSING POINT NEIABABAD
GUR-E-MAR
= Rail Alignment
MAZAR-I-SHARIF AIRPORT
II. A. Type of Project
PROJECT DESCRIPTION
6. The project will build a railway line linking Hairatan and Mazar-e-Sharif. The project will have two components: (i) railway construction and (ii) railway sector and institutions development. The Project will be enhanced by the improved and modernized custom facilities in Hairatan being funded by the European Commission. The first phase of this Euro 13 million project to handle import goods is completed. The second phase for export goods will follow. The Project will be synchronized with the newly built customs facilities to maximize the project benefits. B. Need for the Project
7. The existing Uzbek railway network stops at the border town of Hairatan. This is a gateway to Afghanistan, but it has reached its toll capacity (4,000 tons of cargo per month). The flow of goods from Central Asia to Afghanistan will increase from 25,000 tons to 40,000 tons per month over the next few years. To prevent bottlenecks at the border, the existing Uzbek railway at Hairatan needs to be extended into Afghanistan, to Mazar-e-Sharif. At a later stage, the railway network will be extended to Herat in the west and Tajikistan in the east. The railway line is expected to significantly save transport costs and time for strategic commodities such as fuel and general cargo. The new railway line will also divert the road transport to rail that reduces the transport costs by road, traffic accidents, pollution, and green house gases. The diversion of road to rail freight will also reduce the road maintenance costs. In the long run, the railway extension to Charbakhar Port would make it more attractive for cotton exports from Uzbekistan. C. Location, Size, and Components
8. The rail line will run for a distance of 75 km, starting at the Friendship Bridge which crosses the border between Uzbekistan and Afghanistan, and finishing just south of the village of Gur-e-Mar some 18 km east of Mazar-e-Sharif. The alignment is shown in Figure 1.2. 9. The Project will have two components: (i) railway construction and (ii) railway sector and institutions development. 10. Railway Construction Component. Under this component the Project will construct about 75 km railway line and associated support infrastructure and facilities for efficient and safe operation. The outputs will comprise: (i) (ii) (iii) (iv) (v) Improved Hairatan's marshaling yard and railway station. A new single track railway line of 75 km from Hairatan to Mazar-e-Sharif with technical specifications of Uzbekistan's railway system. Passing stations and trans-shipment facility at Mazar-e-Sharif. Signaling and telecommunication systems. Safety features for efficient operation, including at grade pedestrian and stock crossing points where required
11. The track gauge will be 1520 mm which will ensure standardization with the rail networks of the Commonwealth of Independent States (CIS). The loading gauge will also be the CIS standard. This has a wide clearance and so will permit cargo from other gauges to be trans-
shipped on flat wagons. Passing stations will be constructed every 20 km. The passing stations will be 1.7 km in length allowing for 100 wagon trains made up of 17 m wagons. Maximum speed will be 80 km/h. 12. Railway Sector and Institutions Development Component. This component will primarily assist the Government to develop the capacity in railway sector in Afghanistan. Under the project an advisor in railway sector, financing, and institutions development will be recruited and tasked to produce the following outputs: (i) (ii) (iii) (iv) (v) Railway sector institutions set up Draft long term railway development plan Draft railway legal and regulatory framework Draft concession agreement Draft training program
13. The rail civil works will be constructed by the Uzbekistan Temir Yullari (UTY) or Uzbek National Railroad Corporation. UTY is also likely to be the operator of the trains and undertake the management and maintenance of the railway facilities. UTY is a member of the CIS family of railroads, which is the large former Soviet network that reaches over most of Central Asia and into Eastern Europe. The CISs main characteristic is the use of a 1520 mm track gage largely built using standards developed by All Russia Railway Institute. The result is a high degree of standardization and interoperability. 14. Because the Project will be using, de-facto, the Russian specifications and designs modified by the UTY for local conditions, the Project is assured of a nearby supply of components and track materials. This material can, therefore, often be purchased at commodity prices inasmuch as the CIS network has several suppliers of the same designs. This greatly reduces the lead-time and prices compared to material acquired from just one nation or even just one factory, possibly overseas. D. Schedule
15. The project will be implemented over a period of 18 months. The design and construction activities will start in November 2009. Civil and track works will start early in January 2010. The construction is expected to be completed by November 2010.
2 0 09 2010 4 1 2 3 4 1 2 20 1 1 3 4
It e m
Ad va nc e A cti on
P ro c ure m e nt o f C iv il a nd r ailw a y W o rk s - D es ign a n d B u ild P ro c ure m e nt o f D es ign r ev ie w a n d S u pe rv is io n C o ns u lt an ts
A D B N o O b je c tio n
R ai lw ay L i n e C o ns tru c tio n D et aile d D e sig n, E n g in ee ring a n d do c um e n ta tio n La nd A c qu is itio n & R es e tt le m en t C iv il W o rk s C o n st ru c tio n Tra c k L ay in g Te le c om m u n ic at io ns an d s ig na llin g Tial O p er at io ns R ai lw ay s ec to r a n d In s titu ti o na l D e ve lo pm e n t P ro c ure m e nt o f ra ilw a y A d v is or (S ec to r an d F ina n ce ) P ro c ure m e nt o f ra ilw a y A d v is or (I ns titu tion )
N ot e: I m plem e n ta tio n s c he du le f o r R a ilw ay s e c to r a n d In st it ut io na l D ev e lo pm e n t is in d ic at iv e.
III. A. Introduction
DESCRIPTION OF THE ENVIRONMENT
16. This section provides a description of the existing environmental situation of the project area in terms of physical resources, ecological resources, economic development, and social and cultural resources. The description is based on literature review of available reports, map analysis, and site visit notes. The majority of the alignment passes through desert and semidesert where the terrain is featureless, uninhabited, and barren. It is only at each end of the alignment that there are any potentially sensitive receptors: at the northern end the industrial area of Hairatan surrounds the border crossing while the southern end is close to the village of Gur-e-Mar. 17. The study area for the impact assessment is a 2 km wide corridor covering an area 1 km either side of the rail line. The alignment may change slightly during detailed design but the large study area will ensure that any environmental values have already been assessed. The description of the environment is not limited to the study area but provides information on the wider region as well to allow the assessment to consider the project in a wider context as well. 1. Location, Topography and Soils
18. The alignment is located on the Northern Plain of Balkh Province. This area of the province is flat, and made up of areas of desert and semi-desert. The northern half of the alignment from Hairatan to the Naibabad junction is covered by wind blown sands. From Naibabad to Gur-e-Mar the alignment crosses arid loess soils. 19. The topography around the project site forms part of an extensive sparsely covered plain which abuts the foothills of the Hindu Kush to the south and extends across the border into Turkmenistan and Uzbekistan to the north. Loess comprises fine soil particles that are transported during the summer by the prevailing northwest wind from the central Asian plains and deposited on the foot of the mountains where wind speed is frustrated by relief. The plain is gently rolling or flat with elevation 350-550 m. 2. Geology and Seismicity
20. The geology of the area comprises Neogene and Quaternary (Pleistocene) sediments comprising loess cover beds tens of meters thick, which overlie alternating layers of pebbles/gravels, sands, silts and clays. The sediments represent the products of erosion of the mountains. Modem alluvial deposits occur along the current river valleys. The quaternary sediments overlie Mesozoic limestones, conglomerates, sandstones, siltstones, and shales extending to several kilometers depth. The Mesozoic rocks are gently folded and faulted forming the reservoir strata and structures for the region's natural gas resources. The Mesozoic rocks are exposed to the south in the foothills of the Hindu Kush. 21. The area is seismically active being adjacent to the northern edge of the Hindu Kush where orogenic processes are active. The region has a history of strong earthquakes, over 5.8 on the Richter scale. All structural elements in this project will be designed accordingly.
3.
Climate and Air Quality
22. Afghanistan has a continental climate with many local variations due to the presence of mountains. The climate in the country varies from arid in the south and southwest and to semiarid in most other parts of the country. The high mountain ranges of Hindu Kush and Pamir are moderately humid and covered by permanent snow and glaciers at altitudes above 5,000 m. 23. Mazar-i Sharif climate is characterized with very hot summer with daily temperatures of over 350C in June, July, and August. Winter is cold with temperature below 00 C in December, January and February. Spring and autumn are pleasant with moderate temperatures. Mean monthly temperature varies from -2.10C to 38.9 0C; humidity ranges from 27% to 79%. Average monthly rainfall ranges from 0 to 43.8 mm with 190mm annual rainfall. 24. Winds are primarily northwesterly and southeasterly. East winds are also common in winter and fall. Prevailing wind speeds are 2 to 3 m/s. Rare strong winds (up to 20 m/s) occur in late spring or summer and are usually accompanied by dust storms, reducing visibility to several meters. 25. Apart from wind-borne dust during dust storms, ambient air quality along the alignment is likely to be good based on the following characteristics: (i) the alignment crosses desert or semidesert and is many kilometers from the nearest sources of air pollution; (ii) prevailing winds would tend to disperse any air pollution from the area and (iii) the area is relatively exposed to wind and topographically not prone to atmospheric inversion. 4. Water Quality
26. The Amu Darya River at the start of the alignment is the only surface water feature within the study area. This flows in an east west direction away from the alignment of the railway. There are no other surface water features within 10 km of the alignment. At the Southern end of the alignment the Balkh River is some 20 km to the west. 5. Ecological Resources
27. There are no significant ecological resources in the study area with the majority of the alignment crossing barren arid desert or semi-desert areas. There is no natural vegetation in the desert. In the semi desert areas the ground cover is sparse consisting of drought-resistant grasses including needle grass, sheep fescue, blue grass, and sedge. The grass usually dies back by mid-summer and the terrain takes on a desert appearance. 28. The harsh desert conditions of the study area mean that there is only a small number of fauna species adapted to inhabit it. These include the Midday Gerbil Meriones meridianus, the Social Vole Microtus socialis and the Cape Hare Lepus capensis. Donkeys and horses graze the semi-desert areas and foxes area also found. The Patch-nosed desert snake Salvadora hexalepis hexalepis is sometimes found in the study area. 6. Economic Development
29. The majority of the study area is uninhabited and so there is little economic activity taking place. At the northern end of the alignment is the industrial area of Hairatan where there are a number of rail spurs, warehousing, and fuel farms that deal with goods imported from Uzbekistan. The rail alignment will follow the route of the existing Hairatan-Naiababad road to
the south which is also the route of a 330 kV transmission line. The alignment will cross the A76 road at Naiababad before turning west. At the southern end of the alignment is the village of Gur-e-Mar. This section of the IEE therefore describes the economic development and the social and cultural resources of the wider region as there is little to describe within the study area. 7. Industries
30. There is one fertilizer factory operating in the province. The majority of commercial activity in Balkh is related to agriculture and small businesses. The sector of small industries is dominated by one commodity - karakul1 skin. The districts of Dawlat Abad, Balkh, Chimtal, and Sholgara together house close to three quarters of the villages engaged in this particular industry. In the area of handicrafts, rugs are the most prominent, engaging more than 408 villages of the 1,140 (36%). Carpets, jewelry, and shawls are also produced, albeit in substantially less number of villages: rugs concentrated particularly in Chahar Kint, Sholgara, and Dawlat Abad; carpets in Dawlat Abad, Dehdadi, Balkh, and Chahar Bolak; jewelry in Dehdadi and Chahar Kint; and shawls in Dawlat Abad, Chimtal, Chahar Kint, and Sholgara. 8. Infrastructure facilities
31. The provision of basic infrastructure such as water and sanitation, energy, transport and communications is one of the key elements necessary to provide the building blocks for private sector expansion, equitable economic growth, increased employment and accelerated agricultural productivity. In Balkh province, on average only 31% of households use safe drinking water. This rises to 67% in the urban area, and falls to 12% in rural areas. Four of five households (80%) have direct access to their main source of drinking water within their community, however almost one in five households (18%) has to travel for up to an hour to access drinking water, and for 1% travel to access drinking water can take up to 6 hours. On average only 12% of households have access to safe toilet facilities. The situation is better in the urban areas where 15% of households have safe toilets, but this is accurate for only 10% of rural households. 32. In terms of meeting the basic requirements for energy, 49% of households in Balkh province have access to electricity with a majority of these (41%) relying on public electricity. In the urban areas 95% of households have access to electricity however this figure falls to just 26% in rural areas, and a little more than half of these (14%) have access to public electricity. 9. Transportation
33. The transport infrastructure in Balkh is reasonably well developed, with 38% of roads in the province able to take car traffic in all seasons, and 34% able to take car traffic in some seasons. However, in more than a quarter (27.5%) of the province there are no roads at all. 10. Land use
34. On average 67% of households in the province have access to irrigated land, whereas 28% of rural households and 14% of urban households have access to rain-fed land.
Karakul is the soft curly black wool from central Asian lambs used for fur coats.
11.
Agricultural development, mineral development, and tourism facilities
35. The most important field crops grown in Balkh province include wheat, barley, maize, flax and melon/water melon. The most common crops grown in garden plots include fruit and nut trees (67%), grapes (13%) and vegetables (4%). Melon/water melons (6%) and cotton (2%) is also frequently gown in garden plots in the province. Six out of seven households with access to fertilizer use it on field crops (84%) and to a much lesser degree on garden plots (8%), although nearly one of ten households use fertilizer on both field and garden (8%). Balkh produces industrial crops such as cotton, sesame, tobacco, olives, and sharsham in a relatively substantial number of villages. 36. Agriculture is the major source of revenue for 42% of households in Balkh province, including 61% of rural households and 7% of households in the urban areas. Seventy percent of rural households and 6% of urban households own or manage agricultural land or garden plots in the province. However, more than half of households (58%) in the urban areas and more than one-fifth of households (21%) in rural areas derive income from trade and services. More than a third of households (35%) in urban and at least a quarter (25%) in rural areas earn some income through non-farm related labor. Livestock also accounts for income for 29% of rural households. 37. In 2005 there were 21 agricultural cooperatives active in Balkh involving 1,617 members. This was almost three times more people than in 2003 when the figure was only 601 members. In 2005 agricultural cooperatives controlled a total of 11,714 ha of land and achieved a surplus of products for sale of 90,000 tons. As a result of this, each member held a share in the capital of the cooperative to the value of 703,100Afs. 12. Social and Cultural Resources a. Population and communities
38. Balkh has a total population of 1,123,948. There are 119,378 households in the province and households on average have 7 members. Around 66% of the population of Balkh lives in rural districts while 34% lives in urban areas. 51 % of the population is male and 49% is female. The major ethnic groups living in Balkh province are Tajiks and Pashtoons followed by Uzbek, Hazaras, Turkman, Arab and Baluch. Dari is spoken by about 50% of the population and 58% of the villages. The second most frequent language is Pashtu, spoken by the majorities in 266 villages representing 27% of the population, followed by Turkmani (11.9%) and Uzbeki (10.7%). 39. Balkh province also has a population of Kuchis or nomads whose numbers vary in different seasons. In winter 52,929 individuals, or 2.2% of the overall Kuchi population, stay in Balkh living in 80 communities. Half of these are short-range partially migratory, another third are long-range partially migratory, and 18% are settled. Overall, for long and short range migratory categories, less than half of the community migrates. In the winter both groups stay mostly in one area and dont move around during the season. In the summer season, some 120 long range migratory Kuchi households come from Saripul province to Balkh province. The Kuchi population in the summer is 59,776 individuals. 40. In total the government employs 18,376 people in Balkh province. As the table below shows, 69% of these are employees and 31% are contract workers. 82% of government workers are men and 18% are women.
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b.
Health facilities
41. Basic infrastructure of health services exists in Balkh province. In 2005 there were 39 health centers and 7 hospitals with a total of 477 beds. There were also 280 doctors and 270 nurses employed by the Ministry of Health working in the province, which represented an increase of about 9% in the number of nurses and 18% increase in the number of doctors in the province compared to 2003. The province also has 252 pharmacies of which 243 are owned privately and 9 are run by the government. The majority of communities do have a health worker permanently present in their community. c. Education facilities
42. The overall literacy rate in Balkh province is 44%, however, while more than half of men are literate (54%), this is true for just about one-third of women (32%). However, in the population aged between 15 and 24 the situation for men is slightly better with 58.3% literacy, and there is a smaller improvement for women (35.4%). The Kuchi population in the province has particularly low levels of literacy with just 6.1% of men and none of women able to read or write. 43. On average 58% of children between 6 and 13 are enrolled in school, including around two-thirds of boys (66%) and almost half of girls (48%). Amongst the Kuchi population, nearly half of boys (47%) and one in five girls (20%) attend school in Balkh during the winter months, however, only a quarter of the boys (25%) and about one in ten girls (9%) attend school in the province during the summer. 44. Overall there are 344 primary and secondary schools in the province catering for 305,895 students. Boys account for 59% of students and 95% of schools are boys schools. There are 8,481 teachers working in schools in the Balkh province, almost half of whom are women (49%). 45. Balkh province also has a number of higher education facilities. The University of Balkh has faculties of Medicine, Engineering, Law, Literature, Economics, Agriculture, Religious Law, and Education. In 2005 there were 5,023 students enrolled at the university 3,337 men (66%) and 1,686 women (34%). Of those, 769 students were in their first year, 649 men (84%) and 120 women (16%). Residing in the dormitories provided by the University are 1,097 male and 103 female students. 46. There is an Agricultural vocational high school with 12 teachers, including seven females, catering for a total of 106 students, all of whom are men, and a Chemical Technology school with 46 staff, including 16 females, and 63 male students. d. Socio-economic conditions
47. Around a quarter of the households in the province report having problems satisfying their food needs at least 36 times a year, and a further more than fifth of households face this problem up to three times a year. Nearly a third of the population in the province is estimated to receive less than the minimum daily caloric intake necessary to maintain good health. This figure is much less for the rural population (17%) but significantly high for people living in the urban areas (53%). In both rural and urban areas just about half the population has low dietary diversity and poor or very poor food consumption.
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48. In 2005, 24% of the population of Balkh province received allocations of food aid, which reached a total of 265,402 beneficiaries. In addition, of the 25% of households who reported taking out loans, 58% said that the main use of their largest loan was to buy food. A further 10% used the money to cover expenses for health emergencies. In the same year about a third of the households in the province reported feeling that their economic situation had got worse compared to a year ago, and more than two-thirds felt that it had remained the same. 49. In 2005, more than a tenth of all households in the province reported having been negatively affected by some unexpected event in the last year, which was beyond their control. Rural households were slightly more vulnerable to such shocks, with 17% of households affected, as opposed to urban households (5%). People living in urban areas were most vulnerable to shocks related to natural disaster and drinking water, whereas those in rural areas were most at risk from agricultural shocks. Of those households affected, nearly three quarters reported that they had not recovered at all from shocks experienced in the last 12 months (73%), and a quarter said they had recovered only partially (25%). IV. SCREENING ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES
50. The potential impacts that could arise from the project have been assessed. Those activities that have no potential to cause a significant environmental impact have been screened out, allowing the impact assessment and the development of mitigation measures to focus on the potentially more significant issues. As the majority of the alignment passes through uninhabited areas of desert or semi-desert there are no sensitive receptors in these areas. Human activity is concentrated around the northern and southern ends of the alignment and it is in these areas that the construction and operation of the rail line has been assessed for its possible impacts. 51. The results of the screening process identified that there would be no impacts on surface water, ground water, ecological resources or physical and cultural heritage from the rail line. The key potential impacts identified were noise, vibration and air quality issues associated with both the construction and operation of the rail line. Issues associated with any construction camps were also identified as being potentially significant. Construction materials will be transported by truck, therefore vehicle movements may also result in significant impacts. A. Physical Environment 1. Soils and Materials
52. Construction Period: The construction of the rail line will require earthmoving and compaction to provide a suitable base for the track. Environmental impacts that could occur during the preparation of the track base include contamination resulting from spills or disposal of oil, lubricants or other chemicals. The impacts of any spills are likely to be confined to very local contamination and therefore are unlikely to be significant. The lack of any sensitive receptors along most of the alignment further reduces the likely significance. 53. In order to minimize the likelihood of spills and to ensure proper clean up if a spill occurs the following measures will be included in the EMP. All hazardous wastes and hazardous materials, lubricating oil, solvents and fuels, shall be stored within a bunded area with storage capacity of at least 110% of the largest container in the storage area. Oil spill clean-up materials (absorbent pads, loose absorbent material, etc.) shall be made available. Any spill or leak shall be addressed immediately and the contaminated soil and material be disposed appropriately.
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54. The sources of construction materials such as cement, ballast, sleepers and track have not yet been finalized. Unlicensed quarries and cement plants have the potential to create significant environmental impacts if not operated properly. Truck movements may disturb and disrupt villages and towns. Ballast and cement must be obtained from licensed facilities and the contractor must ensure vehicles use haulage routes that avoid villages and towns. 55. Operation Period: During the operation stage routine maintenance activities may also result in small scale spills of hazardous materials. Bunded hazardous materials storage facilities shall be constructed which will have the capacity of at least 110% of the largest container in the storage area. Spill clean up kits will be available. Staff shall be trained in safe handling of hazardous materials and spill clean up requirements. 56. Trains using the line will carry a variety of materials and may include wagons carrying bulk liquids. The unloading of bulk fuel carriers will present a risk of significant spills if not undertaken in a controlled manner. At present the freight handling facilities are still at the concept design stage; if bulk storage of fuel is included as part of the detailed design then the facilities must designed in accordance with a suitable international standard such as AS1940: The storage and handling of flammable and combustible liquids or ISO28300: Petroleum, petrochemical and natural gas industries - Venting of atmospheric and low-pressure storage tanks. 2. Air Quality
57. Construction Period: The earthmoving and compaction requirements are likely to generate dust. The impacts associated with generated dust will only be significant where work is taking place close to residential or industrial areas. As the majority of the works will take place in areas of desert or semi desert many kilometers from the nearest inhabited areas dust generation will not be a significant issue. Air quality in the region is good and the prevailing winds are likely to disperse the dust to acceptable levels before it reaches any receptor. 58. For works taking place near Hairatan, Haiababad or Gur-e-Mar, the contractor shall monitor the levels of dust being generated by the works. In the event that dust from the construction activities is being deposited on the nearby houses and buildings the contractor shall implement dust control measures. These measures shall include (i) ensuring that diesel equipment is operated and maintained properly, (ii) reducing dust generation by reduced speed limits, and (iii) spraying water on work sites to suppress dust. 59. Operation Period: Once operational there will be no significant air quality impacts from the rail line. Diesel locomotives will be used to power the trains and so there will be some emissions from the engines. However the air quality of the region is good, there are no other sources of pollution close to the line and the prevailing winds will quickly disperse the emissions to acceptable levels. The number of trains using the line will be one or two a day and so there will not be an accumulation of emissions from multiple locomotives. 3. Noise and Vibration
60. Construction Period: The operation of plant and equipment during the construction of the rail line will generate noise and vibration. As the majority of the construction will be occurring many kilometers away from the nearest sensitive receptors any significant noise or vibration will be attenuated by the distance. Materials for the construction for the rail line will be brought to site by truck. This will include sleepers, rails and ballast. Truck movements have the potential to
13
generate significant noise and vibration, particularly when passing through villages and towns. Local housing is often constructed from mud bricks, which is particularly sensitive to damage from vibration. In order to prevent any noise and vibration issues arising from truck movements, the contractor shall develop haulage routes that ensure that any villages or towns are bypassed by trucks. 61. There are two locations where construction activities will be taking place close to villages; these are the construction of the rail crossing of the A76 road to the west of Haiababad and the development of the freight terminus south of Gur-e-Mar village. No noise monitoring has been undertaken as part of this IEE but existing noise levels at both sites are expected to be low, reflecting the rural nature of the area. Road noise from traffic on the A76 is the major noise source during the day which is significantly reduced at night. Both sites are a few kilometers away from the villages and so attenuation over distance will cause a significant reduction in noise levels. However the contractor shall liaise regularly with both communities and in the event that there are night time noise impacts, the contractor shall limit construction to the hours of 7 am to 7 pm. 62. Operation Period: The noise and vibration impacts during operation are expected to be minimal, as there will only be one or two trains a day using the line. Any noise impacts from the locomotives will be short term and intermittent in nature and, as the line will be located away from villages and towns it is likely that noise levels will be attenuated by the distance. 63. The operation of the freight terminus may generate unwanted noise for nearby communities; however the location of the terminus has yet to be determined. When choosing the location the design should take account of any nearby residential areas. If the terminus is to be located close to housing then an earth bund should be constructed between the terminus and the houses to act as a noise barrier. B. Socioeconomic Environment
64. The use of local labor during the construction will increase benefits to the local community by providing employment opportunities and economic benefits. Increased traffic during construction will be managed through coordination between the contractor, PIU and the local police. Contractors will communicate to the public through community consultation regarding the scope and schedule of construction, as well as certain activities causing disruptions or access restrictions. 65. The siting of construction camps has the potential to cause conflict with the local population if done without consideration for local tradition and customs. The influx of a large number of foreign workers into a small rural community that is both religiously and socially conservative can lead to conflict. The employment of local labor on the project will go some way to decreasing the risks but there will still need to a sizable proportion of the workforce recruited from outside the area. Construction camps must therefore be sited well away from local communities so to minimize interactions between the workforce and the local populations. In this case a 5km buffer zone is achievable.
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1.
Proper Construction Practices
66. The contractors conformity with contract procedures and specifications during construction will be carefully monitored. Stakeholder consultations have shown that prime contractors tended to use subcontractors who did not conform to general construction guidelines (good engineering practice and good working practices). Such disregard degrades the quality of construction as well as the benefits of the Project. Contractors will be required to follow standard construction practices that will be monitored and supervised by construction supervision consultants (CSC) employed under the Project. 2. Health, Safety and Hygiene
67. Construction Period: The construction sites are likely to have limited public health impacts due to their isolated location. However, contractors will ensure that no wastewater is discharged to local water bodies and that no site-specific landfills will be established at the construction camps. There will be a potential for diseases to be transmitted, exacerbated by inadequate health and safety practices. Each contractor will therefore be required to recruit an environmental, health and safety manager to address such concerns in the work sites and liaise/work with the laborers. Mitigation measures include: Provision of adequate healthcare facilities (first aid) within construction sites; Training of all construction workers in basic sanitation and healthcare issues, general health and safety matters, and on the specific hazards of their work; Personal protection equipment for workers, such as safety boots, helmets, gloves, protective clothing, goggles and ear protection; Clean drinking water to all workers; Adequate protection to the general public, including safety barriers and marking of hazardous areas; Safe access across the construction site; Adequate drainage throughout the camp to ensure that disease vectors such as stagnant water bodies and puddles do not form; Septic tank and garbage box set up in construction site, which shall be periodically cleared by the contractors to prevent outbreak of diseases. Where feasible, temporary integration of waste collection from work sites into existing waste collection systems and disposal facilities of nearby communities. Hazardous Materials & Waste Management
3.
68. During the construction period a wide range and substantial volumes of waste may be generated including gravel; concrete; miscellaneous structures such as culverts, poles and cables; steel; organic material, such as cleared vegetation, timber; and soil. In addition there will be oils, fuel, grease and chemicals from plant, equipment and vehicle servicing. Any hazardous materials that are used shall also be stored and handled correctly to prevent spills and pollution. The following hazardous materials and waste management measures shall be implemented during construction: All areas designated for the storage of fuels, oils, chemicals or other hazardous liquids shall have a compacted base and be surrounded by a bund to contain any spillage. These areas shall be covered by a roof structure to minimize the potential for infiltration and contamination of rainwater. Alternatively, ventilated containers and
15
individual spill pallets could be used, dependent on the volume of hazardous materials. Storage of such materials outside these areas will be strictly prohibited. An Emergency Spills Contingency Plan shall be prepared as part of the Contractors Environmental Management Plan. Practice waste minimization and management strategies as nominated. Dispose of waste to PIU nominated project disposal sites. Ensure that the waste management measures are implemented on the project site. Prepare and implement a hazardous waste management plan for the disposal of waste oil, batteries and other hazardous materials. Stockpile topsoil for use in post-construction landscaping. Chip and mulch vegetation cleared and reuse it as an organic base for re-vegetation. Ensure that materials, which may cause land/water contamination or create odor problems, are not disposed of on the site. Keep work areas tidy. Ensure that there is adequate provision of correctly marked waste containers made available at convenient locations for the disposal of wastes. Ensure that adequate toilet and ablution facilities are provided for the duration of the contract. Domestic sewage and sullage from these facilities shall be subject to suitable treatment prior to discharge in to environment. Under no circumstances untreated wastes shall be discharged into the environment. INSTITUTIONAL REQUIREMENT AND ENVIRONMENTAL MONITORING PLAN
V. A.
Institutional framework for Environmental Management
69. Institutions responsible for executing and monitoring the environmental aspects of this Project are: Ministry of Public Works (MPW) is responsible for planning, constructing, operating and maintaining rail infrastructure in Afghanistan. The Project Implementation Unit (PIU) will be in charge of project management to ensure that the contract provisions are properly maintained. Both the supervision consultants and the Environmental Specialist within the Environment & Social section of the PIU are responsible for environmental monitoring and management of project implementation. The rail civil works will be constructed by the Uzbekistan Temir Yullari (UTY), the Uzbek National Railroad Corporation. The MPW and its provincial authorities will also undertake routine and random monitoring of specific environmental plans addressed in this IEE. The Project will provide PIU with the assistance of a construction supervision consultant (CSC) to help ensure the implementation of environmental management practices at each stage of the construction and operation. NEPA shall be consulted if complicated issues arise during construction and operation stages.
70. Implementation and monitoring of mitigation measures as per the Environmental Monitoring and Management Plan during the construction stage shall be the responsibility of the UTY. The environmental specialists of CSC will supervise the monitoring of implementing mitigation measures during construction. The domestic environmental specialist shall coordinate with the international environmental specialist for resolving complicated issues that arise in the field and to provide continuously updated information in order to submit reports to PIU and ADB.
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71. After project completion, it is likely that operation and maintenance of the line will also be undertaken by UTY, who shall develop and implement the monitoring plan for the operational phase. B. Environmental Monitoring Program
72. Environmental monitoring is a very important aspect of environmental management during the construction and operation stages of the project to safeguard the protection of the environment. Compliance monitoring shall be conducted in accordance with the EMP produced by the contractor, based on this IEE and Table 2: Summary of Environmental Mitigation Measures. Aspects to be monitored are as follows: Pre-construction: updating of EMP during detailed design phase and inclusion of environmental clauses in bid and contract documents. Construction: environmental performance of contractors with regard to control measures pertaining to material storage, location of work camp, noise, waste disposal, traffic management, workers safety, etc. Operation: O&M practices and environmental effects including materials handling, soil contamination, noise, vibration, and air quality.
73. The CSC in cooperation with PIU during project implementation shall develop an environmental auditing protocol for the construction period, formulate a detailed monitoring and management plan, supervise the environmental monitoring regularly, and submit quarterly reports based on the monitoring data. The PIU shall submit the following environmental reporting documentation to ADB: Baseline Monitoring Report: The Baseline Monitoring Report shall be submitted to ADB prior to commencement of civil work and shall include a detailed environmental management and monitoring plan (including data collection locations, parameters and frequency), baseline environmental data, relevant standards and data collection responsibilities. (ii) Environmental Monitoring Reports: The environmental monitoring reports shall include environmental mitigation measures undertaken, environmental monitoring activities undertaken, details of monitoring data collected, analysis of monitoring results, recommended mitigation measures, environmental training conducted, and environmental regulatory violations. The environmental monitoring reports shall be submitted to ADB semi-annually during the construction period and for one year after completion of construction.
(i)
74. A lump sum budget is allocated in the environmental mitigation to cover monitoring cost and environmental reporting requirements in the project (Table 1). PIU will hire a recognized organization for environmental monitoring and ensure that the project sites are monitored regularly during construction and for the first year of its operation. C. Environmental and Social Management Training
75. The MPW has very limited experience and resources for environmental and social management and monitoring. It will be very difficult for PIU to effectively supervise the monitoring of environmental and social safeguard parameters. For a better understanding of environmental issues, implementation of mitigation measures, and subsequent monitoring, capacity building of PIU and regional administration is essential. Training for the officials is
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crucial for proper environmental monitoring described in the IEE. The contractor shall be provided hands-on-training on-site by the CSC in association with the contractors environmental, health & safety manager. Table 1: Environmental Monitoring and Mitigation Cost
Item Unit No. Unit Cost ($) Total
Environmental Costs - Civil Works (included in Contractors civil work package) Air Quality and Dust Monitoring (baseline) Air Quality and Dust Monitoring Noise and Vibration Monitoring (baseline) Noise and Vibration Monitoring Worker and Storage Compound Dust Suppression Measures Disposal of old machinery and equipment Provision of Environmental, Health & Safety Manager Site Site Site Site Site Day Site MM 3 6 3 6 2 180 1 18 2,000 3,000 1,000 2,000 1,000 50 10,000 3,000 Subtotal 6,000 18,000 3,000 12,000 2,000 9,000 10,000 54,000 114,000
Environmental Costs - Project Implementation Unit (PIU) Budget I. Environmental Management and Monitoring (during design and construction) a. Remuneration and Per diems International Environmental Specialist (design) International Environmental Specialist (CS) Domestic Environmental Specialist (design) Domestic Environmental Specialist (CS) b. Travel International Travel Domestic Travel II. Environmental and Social Management Training a. Remuneration and Per diems International Environmental Specialist International Social/Resettlement Specialist Domestic Environmental/Curriculum Specialist Domestic Social/Resettlement Specialist b. International Travel c. Trainees Allowance d. Logistics and Others MM MM MM MM Trip No 1 3 3 6 6 12 18,000 18,000 3,500 3,000 2,500 500 Subtotal 18,000 54,000 10,500 18,000 15,000 6,000 121,500
MM MM MM MM Trip Person No
1 1 2 2 2 10 9
21,000 21,000 3,500 3,500 2,500 200 500 Subtotal Total (PIU) Grand Total
21,000 21,000 7,000 7,000 5,000 2,000 4,500 67,500 121,500 303,000
VI.
PUBLIC CONSULTATION AND INFORMATION DISCLOSURE
76. After some thirty years of war, Afghanistan is attempting to rebuild itself, but on-going, sporadic conflict makes operating in the country difficult for security reasons. It is not possible to conduct effective wide spread community consultation under the current security situation. However it has been possible to meet with selected government officials and villagers from Gure-Mar village. No consultation was possible in Hairatan. As the majority of the study area is
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uninhabited the consultation which has been completed can be considered to have reached a good proportion of those people likely to be affected by the project. 77. Four public consultation events took place on the 19th, 21st and 31st July and also on the rd 3 August. The following government officials were met: 78. Mr. Ata Muhammad Noor, Governor of Bulkh Province, Alhaj Jabiullah Akhtery, Head of Sectoral Services, Mr. Golam Mohammad Wusi, Technical Adviser of the Governor, Mr. Abdul Qadir, Commander of Border Police, The following villagers from Gur-e-Mar attended the consultation: Name Ghulam Bahi Mohammad Yaqoob Agha Mohammad Mohammad Shah Mohammad Aslam Sayed Alam Raz Mohammad Abdul Ghafoor Zmari Mohammad Mir Sherin Rabani Ghulam Rasool Ghulam Server Aman Zaman Aziz Mohammad Jan Hazrat Gul Ghafar Abdul Raoof Akber Sayed Alam Jamhoor Occupation Elder Farmer Farmer Farmer Farmer Farmer Mason Farmer Shopkeeper Farmer Farmer Farmer Shopkeeper Farmer Farmer Mechanic Mason Doctor Farmer Worker Worker Farmer Farmer Driver
79. The responses and issues raised were similar from both government officials and the villagers. Both sets welcomed the project and felt that it would contribute to the national and local economies in a number of ways. The villagers felt the railway offered good prospects for increasing trade in farm produce by allowing them to access markets further afield. Noise and dust issues were raised as possible impacts during the construction period but they also stated that these issues were not a significant concern. None of the participants was opposed to the project.
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VII.
FINDINGS AND RECOMMENDATIONS
80. The IEE shows that no major negative environmental impacts are likely to occur due to the construction and operation of the Hairatan - Mazar-i-Sharif rail line. 81. The Project will have some minor environmental impacts, which will be both positive and negative, including: (a) soil erosion, (b) temporary effect on noise and air quality due to construction activities; (c) increased growth in the economy of the region; (d) substantial income and employment opportunities; (e) better indoor air quality; (f) better life style and improved living conditions; (g) reduced health risk, (h) development of small to medium sized enterprises, (i) reduced poverty; and (j) advanced environmental skills and awareness level among the MEW officials. 82. Implementation of appropriate mitigation measures during the design, construction, and operation phases will minimize the negative impacts of the Project to acceptable levels. To ensure that these mitigation measures are implemented and negative impacts avoided, the measures will be included in the contract specification of the Project. Environmental monitoring of the Project will be undertaken regularly through the first three years of its operation to ensure that the measures are being implemented properly. VIII. CONCLUSIONS
83. The project will have significant environmental and social benefits and, if the prescribed mitigation and management measures are fully implemented, the project is unlikely to have major adverse environmental impacts. An environmental monitoring plan has been prepared and responsibilities for implementation assigned. A budget has been allocated for environmental management and monitoring. Based on the findings of the IEE, the classification of the subproject as Category B is confirmed, and no further special study or detailed EIA will be required to comply with ADBs Environment Policy (2002).
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Table 2: Summary of Environmental Mitigation Measures Potential Environmental Issue

Project design does not consider environmental mitigation requirements and environmental management measures Lack of Environmental Specifications for Contractor in Bid Documents, Environmental Clauses for Contracts i)
Mitigation measures
Responsible entity
Design and Supervision Consultant PIU to monitor Design and Supervision Consultant PIU to monitor Design and Supervision Consultant
Cost estimate ($)

Included in contract cost
Pre-construction Phase
Environmental design review undertaken of final project design
i) Prepare relevant environmental sections in the tender documents for bidders ii) Prepare a bid evaluations section for environment, according to ADB bid
evaluation format
iii) Prepare environmental contract clauses for contractors (refer to EMP)

i) Analyze noise levels at residences and design suitable earthen bunds
Noise and Vibration

Freight handling facilities unavoidabley near residential areas
Construction Phase
Soils and materials
soil contamination from oil spill and waste disposal
i) Remove contaminated soil from the site and conduct remediation measures ii) Recycle and dispose the waste as per contractors plan and contain the
hazardous waste i) Recycle scrap material ii) Contain and store the hazardous waste in secure building or drums iii) Dispose the waste from camps at the nearest landfill site or garbage bins i) Contractor develops traffic management plan to direct trucks away from towns and villages ii) Restrictions on working hours if night time noise impacts occur i) Ensure that diesel equipment is operated and maintained properly ii) Reducing dust generation by reduced speed limits iii) Spraying water on work sites to suppress dust
Contractor UTY PIU to monitor Contractor UTY
Included in contract cost Included in contract cost
Solid Waste
(old equipments, waste from worker camps)
Noise and Vibration

(Construction activities, machinery and vehicles)
PIU to monitor Contractor UTY
Air Quality
Dust generation from construction activities
Contractor UTY PIU to monitor
Table 2: Summary of Environmental Mitigation Measures Potential Environmental Issue Health safety and hygiene
Disease transmission Contamination of wells Pollution form waste disposal
Mitigation measures
iv) Provision of adequate healthcare facilities (first aid) within construction sites v) Personal protection equipment for workers, such as safety boots, helmets, gloves, protective clothing, goggles and ear protection vi) Training of all construction workers in basic sanitation and healthcare issues, general health and safety matters, and on the specific hazards of their work vii) Clean drinking water to all workers viii) Adequate protection to the general public, including safety barriers and marking of hazardous areas ix) Safe access across the construction site x) Adequate drainage throughout the camp to ensure that disease vectors such as stagnant water bodies and puddles do not form xi) Septic tanks and garbage bins shall be set up in construction sites, which shall be periodically cleared by the contractors to prevent outbreak of diseases. xii) Where feasible the contractor shall arrange the temporary integration of waste collection from work sites into existing waste collection systems and disposal facilities of nearby communities. i) All areas designated for the storage of fuels, oils, chemicals or other hazardous liquids shall have a compacted base and be surrounded by a bund to contain any spillage. These areas shall be covered by a roof structure to minimize the potential for infiltration and contamination of rainwater. Alternatively, ventilated containers and individual spill pallets could be used, dependent on the volume of hazardous materials; ii) Areas designed for the storage of hazardous materials are to be clearly designated and storage of such materials outside these areas strictly prohibited. iii) An Emergency Spills Contingency Plan shall be prepared as part of the Contractors Environmental Management Plan. iv) Apply any waste minimization and management strategies as nominated; v) Dispose of waste to PIU-nominated project disposal sites; vi) Ensure that the waste management measures are implemented on the project site vii) Prepare and implement a hazardous waste management plan for the disposal of waste oil, batteries and other hazardous materials viii) Ensure that materials, which may cause land/water contamination or create odor problems, are not disposed of on the site; ix) Keep work areas tidy x) Ensure that there is the adequate provision of correctly marked waste
Responsible entity
Cost estimate ($)

Hazardous materials and waste management

Ground contamination Poor waste management
21
22
Table 2: Summary of Environmental Mitigation Measures Potential Environmental Issue Mitigation measures
containers made available at convenient locations for the disposal of wastes xi) Ensure adequate toilet and ablution facilities are provided for the duration of the contract. Domestic sewage and sullage from these facilities shall be subject to suitable treatment prior to discharge in to environment. Under no circumstances shall untreated wastes be discharged into the environment
Responsible entity
Cost estimate ($)
Operations Phase
Noise and Vibration
Freight handling facilities generate noise impacts on nearby residential areas i) Noise bunds to be constructed in the event that noise impacts occur Operator UTY Inclusive in operational costs Inclusive in operational costs
Hazardous materials and waste disposal

Soil contamination Poor waste management
i)
ii)
iii) iv) v) vi) vii)
All areas designated for the storage of fuels, oils, chemicals or other hazardous liquids shall have a compacted base and be surrounded by a bund to contain any spillage. These areas shall be covered by a roof structure to minimize the potential for infiltration and contamination of rainwater. Alternatively ventilated containers and individual spill pallets could be used, dependent on the volume of hazardous materials areas designed for the storage of hazardous materials are to be clearly designated and storage of such materials outside these areas strictly prohibited. iAn Emergency Spills Contingency Plan shall be prepared as part of the Operator's Environmental Management Plan. apply any waste minimization and management strategies as nominated; dispose of waste to nominated project disposal sites; ensure that the waste management measures are implemented on the project site iPrepare and implement a hazardous waste management plan for the disposal of waste oil, batteries and other hazardous materials
Operator UTY
Table 3: Summary of Environmental Monitoring Requirements Mitigation Measure Noise Parameters to be monitored Location Frequency Responsibilities Cost (US$) 3,000
Pre-construction Phase - establish baseline conditions

Leq (18 hr) mg dust/m2 using sticky pad measurements At a sample of residential properties within 2 km of the alignment Pads to be located around 1 village or 3 separate houses 3 monitoring events before the start of construction 3 weekly monitoring events prior to the start of construction Weekly until construction stops or complaint is dealt with Weekly until construction stops or complaint is dealt with Daily PIU
Air quality
PIU
6,000
Construction Phase
Noise At any residential property within 2 km of construction activities Lmax & L10 At the boundary of any construction area causing noise impacts and complaints Visible dust, to determine if At all construction sites off-site migration of dust is impacting on surrounding residential areas mg dust/m2 using sticky pad Pads to be located at any measurements house within a residential area affected by dust deposition Leq (18 hr) Contractor 1,000 per event 2,000 per event No cost
Noise
Contractor
Air Quality
Contractor
Air Quality
Weekly until dust suppression measures are successful
Contractor
2,000 per event

Operations Phase
Noise Leq (18 hr) At a sample of residential properties close to the freight handling facility 3 monitoring events during operations Operator 3,000
23
Environmental Assessment Report
Summary Initial Environmental Examination for Afghanistan: Hairatan to Mazar-e-Sharif Railway Development Project Document Stage: Draft Project Number:42533 August 2009
Afghanistan: Hairatan to Mazar-e-Sharif Railway Development Project
The summary initial environmental examination document is that of the borrower. The views expressed herein do not necessarily represent those of ADBs Board of Directors, Management, or staff, and may be preliminary in nature.
CONTENTS Page I. II. INTRODUCTION PROJECT DESCRIPTION A. Type of Project B. Need for the Project C. Location, Size and Components D. Schedule DESCRIPTION OF THE ENVIRONMENT FORECASTING ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES A. Physical Environment Soils and Materials Air Quality Noise and Vibration B. Socioeconomic Environment Proper Construction Practices Health, Safety and Hygiene Hazardous Materials & Waste Management INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PLAN A. Institutional framework for Environmental Management B. Environmental Monitoring Program PUBLIC CONSULTATION AND INFORMATION DISCLOSURE FINDINGS AND RECOMMENDATIONS CONCLUSIONS 1 2 2 2 2 2 3 5 5 5 6 6 7 7 7 8 9 9 9 10 10 10
III. IV. 1. 2. 3. 1. 2. 3. V.
VI. VII. VIII.
Supplementary Appendix F
I.
INTRODUCTION
1. The extension of railway line from Hairatan to Mazar-e-Sharif is a top priority of the Afghan government and also fits with the 20092013 ADB's Country Partnership Strategy that places development of national roads and railways as priority. At present the Uzbekistan Afghanistan rail link ends at the Hairatan terminus. Constructing a new link to Mazar-e-Sharif with possible extension to Herat will remove physical constraints and create alternative competitive routes for trade between Afghanistan and its neighbors and also third countries. 2. This IEE has been prepared through reviewing existing reports, data analysis, and reviewing impact of other similar projects in other Asian countries. The environmental impact was considered for physical, environmental, ecological, social and cultural resources within the project area. The project is still in the early stages of the concept design and so there are a number of project components that are not clearly defined at this stage. Once the detailed design is nearing finalization an environmental design review will be undertaken by the design and supervision consultant to assess the project against the requirements set out in this IEE 3. Under the Asian Development Bank's (ADBs) Environmental Assessment Guidelines (2003) the proposed subproject has been categorised as B for environmental purposes and an IEE has been prepared. The assessment has been carried out to ensure that the potential adverse environmental impacts are appropriately addressed in line with ADBs Environmental Policy (2002), and Environmental Assessment Guidelines (2003). This IEE has also been prepared to meet the requirements of the Islamic Republic of Afghanistan for environmental assessment.
II. A. Type of Project
PROJECT DESCRIPTION
4. The project will build a railway line linking Hairatan and Mazar-e-Sharif. The project will have two components: (i) railway construction and (ii) railway sector and institutions development. The Project will be enhanced by the improved and modernized custom facilities in Hairatan being funded by the European Commission. The first phase of this Euro 13 million project to handle import goods is completed. The second phase for export goods will follow. The Project will be synchronized with the newly built customs facilities to maximize the project benefits. B. Need for the Project
5. The existing Uzbek railway network stops at the border town of Hairatan. This is a gateway to Afghanistan, but it has reached its toll capacity (4,000 tons of cargo per month). The flow of goods from Central Asia to Afghanistan will increase from 25,000 tons to 40,000 tons per month over the next few years. To prevent bottlenecks at the border, the existing Uzbek railway at Hairatan needs to be extended into Afghanistan, to Mazar-e-Sharif. At a later stage, the railway network will be extended to Herat in the west and Tajikistan in the east. The railway line is expected to significantly save transport costs and time for strategic commodities such as fuel and general cargo. The new railway line will also divert the road transport to rail that reduces the transport costs by road, traffic accidents, pollution, and green house gasses. C. Location, Size and Components
6. The rail line will run for a distance of 75km, starting at the Friendship Bridge which crosses the border between Uzbekistan and Afghanistan, and finishing just south of the village of Gur-e-Mar some 18km east of Mazar-e-Sharif. D. Schedule
7. The project will be implemented over a period of 18 months. The design and construction activities will start in November 2009. Civil and track works will start early in January 2010. The construction is expected to be completed by November 2010.
III.
DESCRIPTION OF THE ENVIRONMENT
8. The study area for the impact assessment is a 2km wide corridor covering an area 1km either side of the rail line. The alignment may change slightly during detailed design but the large study area will ensure that any environmental values have already been assessed.. 9. Location, topography and soils. The alignment is located on the Northern Plain of Balkh Province. This area of the province is flat, and made up of areas of desert and semidesert. The northern half of the alignment from Hairatan to the Naibabad junction is covered by wind blown sands. From Naibabad to Gur-e-Mar the alignment crosses arid loess soils. The topography around the project site forms part of an extensive less covered plain which abuts the foothills of the Hindu Kush to the south and extends across the border into Turkmenistan and Uzbekistan to the north. 10. Geology and Seismicity. The geology of the area comprises Neogene and Quaternary (Pleistocene) sediments comprising loess cover beds tens of meters thick, which overlie alternating layers of pebbles/gravels, sands, silts and clays. The sediments represent the products of erosion of the mountains. Modem alluvial deposits occur along the current river valleys. The region has a history of strong earthquakes, over 5.8 on the Richter scale. 11. Climate and air quality. Afghanistan has a continental climate with many local variations due to the presence of mountains. The climate in the country varies from arid in the south and southwest and to semi-arid in most other parts of the country. Winds are primarily northwesterly and southeasterly. East winds are also common in winter and fall. Apart from wind borne dust during dust storms, ambient air quality along the alignment is likely to be good based on the following characteristics: (i) the alignment crosses desert or semi-desert and is many kilometers from the nearest sources of air pollution; (ii) prevailing winds would tend to disperse any air pollution from the area and (iii) The area is relatively exposed to wind and topographically not prone to atmospheric inversion. 12. Water quality. The Amu Darya River at the start of the alignment is the only surface water feature within the study area. This flows in an east west direction away from the alignment of the railway. There are no other surface water features within 10km of the alignment. 13. Ecological resources. There are no significant ecological resources in the study area with the majority of the alignment crossing barren arid desert or semi-desert areas. There is no natural vegetation in the desert. In the semi desert areas the ground cover is sparse consisting of drought resistant grasses including needle grass, sheep fescue, blue grass, and sedge. The grass usually dies back by mid-summer and the terrain takes on a desert appearance. The harsh desert conditions of the study area mean that there are only small number of fauna species adapted to inhabit it. These include the Midday Gerbil Meriones meridianus, the Social Vole Microtus socialis and the Cape Hare Lepus capensis. Donkeys and horses graze the semidesert areas and foxes area also found. The Patch nosed desert snake Salvadora hexalepis hexalepis is sometimes found in the study area. 14. Economic development. The majority of the area is uninhabited and so there is little economic activity taking place. At the northern end of the alignment is the industrial area of Hairatan where there are a number of rail spurs, warehousing and fuel farms that deal with goods imported from Uzbekistan.
15. The majority of commercial activity in Balkh is related to agriculture and small businesses. The sector of small industries is dominated by one commodity-karakul skin. In the area of handicrafts, rugs are the most prominent, engaging more than 408 villages of the 1,140 (36%). Carpets, jewelry, and shawls are also produced, albeit in substantially less number of villages. in Dawlat Abad, Chimtal, Chahar Kint, and Sholgara. 16. Infrastructure facilities. In Balkh province, on average only 31% of households use safe drinking water. This rises to 67% in the urban area, and falls to 12% in rural areas. In terms of meeting the basic requirements for energy, 49% of households in Balkh province have access to electricity with a majority of these (41%) relying on public electricity. In the urban areas 95% of households have access to electricity however this figure falls to just 26% in rural areas, and a little more than half of these (14%) have access to public electricity. 17. Transportation. The transport infrastructure in Balkh is reasonably well developed, with 38% of roads in the province able to take car traffic in all seasons, and 34% able to take car traffic in some seasons. However, in more than a quarter (27.5%) of the province there are no roads at all. 18. Land Use. On average 67% of households in the province have access to irrigated land, whereas 28% of rural households and 14% of urban households have access to rain-fed land. 19. Agriculture development. The most important field crops grown in Balkh province include wheat, barley, maize, flax and melon/water melon. The most common crops grown in garden plots include fruit and nut trees (67%), grapes (13%) and vegetables (4%). Melon/water melons (6%) and cotton (2%) is also frequently gown in garden plots in the province. Balkh produces industrial crops such as cotton, sesame, tobacco, olives, and sharsham in a relatively substantial number of villages. Agriculture is the major source of revenue for 42% of households in Balkh province, including 61% of rural households and 7% of households in the urban areas. Seventy percent of rural households and 6% of urban households own or manage agricultural land or garden plots in the province. Livestock also accounts for income for 29% of rural households. 20. Population and communities. Balkh has a total population of 1,123,948. There are 119,378 households in the province and households on average have 7 members. Around 66% of the population of Balkh lives in rural districts while 34% lives in urban areas. 51 % of the population is male and 49% is female. The major ethnic groups living in Balkh province are Tajiks and Pashtoons followed by Uzbek, Hazaras, Turkman, Arab and Baluch. Balkh province also has a population of Kuchis or nomads whose numbers vary in different seasons 21. Education facilities. The overall literacy rate in Balkh province is 44%, however, while more than half of men are literate (54%), this is true for just about one-third of women (32%). Overall there are 344 primary and secondary schools in the province catering for 305,895 students. Balkh province also has a number of higher education facilities. 22. Socio-economic conditions. Around a quarter of the households in the province report having problems satisfying their food needs at least 36 times a year, and a further more than fifth of households face this problem up to three times a year. Nearly a third of the population in the province is estimated to receive less than the minimum daily caloric intake necessary to maintain good health.
IV.
FORECASTING ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES
23. The potential impacts that could arise from the project have been assessed. Those activities that have no potential to cause a significant environmental impact have been screened out, allowing the impact assessment and the development of mitigation measures to focus on the significant issues. As the majority of the alignment passes through uninhabited areas of desert or semi-desert there are no sensitive receptors in these areas. Human activity is concentrated around the northern and southern ends of the alignment and it is in these areas that the construction and operation of the rail line has been assessed for its possible impacts. 24. The results of the screening process identified that there would be no impacts on surface water, ground water, ecological resources or physical and cultural heritage from the rail line. The key impacts identified were noise, vibration and air quality issues associated with both the construction and operation of the rail line. Issues associated with any construction camps were also identified as being potentially significant. Construction materials will be transported by truck, therefore vehicle movements may also result in significant impacts. A. Physical Environment 1. Soils and Materials
25. Construction Period: The construction of the rail line will require earthmoving and compaction to provide a suitable base for the track. Environmental impacts that could occur during the preparation of the track base include contamination resulting from spills or disposal of oil, lubricants or other chemicals. The impacts of any spills are likely to be confined to very local contamination and therefore are unlikely to be significant. The lack of any sensitive receptors along most of the alignment further reduces the likely significance. 26. In order to minimize the likelihood of spills and to ensure proper clean up if a spill occurs the following measures will be included in the EMP. All hazardous wastes and hazardous materials, lubricating oil, solvents and fuels, will be stored within a bunded area that has the capacity of at least 110% of the largest container in the storage area. Oil spill clean-up materials (sorbent pads, loose sorbent material, etc.) will be made available. Any spill or leak shall be addressed immediately and the contaminated soil and material be disposed appropriately. 27. The sources of construction materials such as cement, ballast, sleepers and track have not yet been finalized. Unlicensed quarries and cement plants have the potential to create significant environmental impacts if not operated properly. Truck movements may disturb and disrupt villages and towns. Ballast and cement must be obtained from licensed facilities and the contractor must ensure vehicles use haulage routes that avoid villages and towns. 28. Operation Period: During the operation stage routine maintenance activities may also result in small scale spills of hazardous materials. Bunded hazardous materials storage facilities will be constructed which will have the capacity of at least 110% of the largest container in the storage area. Spill clean up kits will be available. Staff will be trained in safe handling of hazardous materials and spill clean up requirements. 29. Trains using the line will carry a variety of materials and may include wagons carrying bulk liquids. The unloading of bulk fuel carriers will present a risk of significant spills if not undertaken in a controlled manner. At present the freight handling facilities are still at the concept design stage; if bulk storage of fuel is included as part of the detailed design then the
facilities must designed in accordance with a suitable international standard such as AS1940: The storage and handling of flammable and combustible liquids or ISO28300: Petroleum, petrochemical and natural gas industries - Venting of atmospheric and low-pressure storage tanks. 2. Air Quality
30. Construction Period: The earthmoving and compaction requirements are likely to generate dust. The impacts associated with generated dust will only be significant where work is taking place close to residential or industrial areas. As the majority of the works will take place in areas of desert or semi desert many kilometers from the nearest inhabited areas dust generation will not be a significant issue. Air quality in the region is good and the prevailing winds are likely to disperse the dust to acceptable levels before it reaches any receptor. 31. Works taking place near Hairatan, Haiababad or Gur-e-Mar will need to monitor the levels of dust being generated by the works. In the event that dust from the construction activities is being deposited on the nearby houses and buildings the contractor will be required to implement dust control measures. These will include ensuring that diesel equipment is operated and maintained properly; reducing dust generation by reduced speed limits; and spraying water on work sites to suppress dust. 32. Operation Period: Once operational there will be no significant air quality impacts from the rail line. Diesel locomotives will be used to power the trains and so there will be some emissions from the engines. However the air quality of the region is good, there are no other sources of pollution close to the line and the prevailing winds will quickly disperse the emissions to acceptable levels. The number of trains using the line will be one or two a day and so there will not be an accumulation of emissions from multiple locomotives. 3. Noise and Vibration
33. Construction Period: The operation of plant and equipment during the construction of the rail line will generate noise and vibration. As the majority of the construction will be occurring many kilometers away from the nearest sensitive receptors any significant noise or vibration will be attenuated by the distance. Materials for the construction for the rail line will be bought to site by truck. This will include sleepers, rails and ballast. Truck movements have the potential to generate significant noise and vibration, particularly when passing through villages and towns. Local housing is often constructed from mud bricks, which is particularly sensitive to damage from vibration. In order to prevent any noise and vibration issues arising from truck movements the contractor will be required to develop haulage routes that ensure that any villages or towns are bypassed by trucks. 34. There are two locations where construction activities will be taking place close to villages; these are the construction of the rail crossing of the A76 road to the west of Haiababad and the development of the freight terminus south of Gur-e-Mar village. No noise monitoring has been undertaken as part of this IEE but existing noise levels at both sites are expected to be low, reflecting the rural nature of the area. Road noise from traffic on the A76 is the major noise source during the day which is significantly reduced at night. Both sites are a few kilometers away from the villages and so attenuation over distance will cause a significant reduction in noise levels. However the contractor will be required to liaise regularly with both communities and in the event that there are night time noise impacts the contractor will be required to limit construction to the hours of 7am to 7pm.
35. Operation Period: The noise and vibration impacts during operation are expected to be minimal, as there will only be one or two trains a day using the line. Any noise impacts from the locomotives will be short term and intermittent in nature and, as the line will be located away from villages and towns it is likely that noise levels will be attenuated by the distance. 36. The operation of the freight terminus may generate unwanted noise for nearby communities; however the location of the terminus has yet to be determined. When choosing the location the design should take account of any nearby residential areas. If the terminus is to be located close to housing then an earth bund should be constructed between the terminus and the houses to act as a noise barrier. B. Socioeconomic Environment
37. The use of local labor during the construction will increase benefits to the local community by providing employment opportunities and economic benefits. Increased traffic during construction will be managed through coordination between the contractor, PIU and the local police. Contractors will communicate to the public through community consultation regarding the scope and schedule of construction, as well as certain activities causing disruptions or access restrictions. 38. The siting of construction camps has the potential to cause conflict with the local population if done without consideration for local tradition and customs. The influx of a large number of foreign workers into a small rural community that is both religiously and socially conservative can lead to conflict. . The employment of local labor on the project will go some way to decreasing the risks but there will still need to a sizable proportion of the workforce recruited from outside the area. Construction camps must therefore be sited well away from local communities so to minimize interactions between the workforce and the local populations. In this case a 5km buffer zone is achievable. 1. Proper Construction Practices
39. The contractors conformity with contract procedures and specifications during construction will be carefully monitored. Stakeholder consultations have shown that prime contractors tended to use sub contractors without ensuring that they conform to general construction guidelines (good engineering practice and good working practices).. Contractors will be made to follow standard construction practices, monitored and supervised by construction supervision consultants (CSC) employed under the Project. 2. Health, Safety and Hygiene
40. Construction Period: The construction sites are likely to have limited public health impacts due to their isolated location. However, contractors will ensure that no wastewater is discharged to local water bodies and that no site-specific landfills will be established at the construction camps. There will be a potential for diseases to be transmitted, exacerbated by inadequate health and safety practices. Each contractor will therefore be required to recruit an environmental, health and safety manager to address such concerns in the work sites and liaise/work with the laborers. Mitigation measures include: Provision of adequate healthcare facilities (first aid) within construction sites; Training of all construction workers in basic sanitation and healthcare issues, general health and safety matters, an on the specific hazards of their work;
Personal protection equipment for workers, such as safety boots, helmets, gloves, protective clothing, goggles and ear protection; Clean drinking water to all workers; Adequate protection to the general public, including safety barriers and marking of hazardous areas; Safe access across the construction site; Adequate drainage throughout the camp to ensure that disease vectors such as stagnant water bodies and puddles do not form; and Septic tank and garbage box will be set up in construction site, which will be periodically cleared by the contractors to prevent outbreak of diseases. Where feasible the contractor will arrange the temporary integration of waste collection from work sites into existing waste collection systems and disposal facilities of nearby communities. 3. Hazardous Materials & Waste Management
41. During the construction period a wide range and substantial volumes of waste may be generated including gravel; concrete; miscellaneous structures such as culverts, poles and cables; steel; organic material, such as cleared vegetation, timber; and soil. In addition there will be oils, fuel, grease and chemicals from plant, equipment and vehicle servicing. Any hazardous materials that are used will also need to be stored and handled correctly to prevent spills and pollution. The following hazardous materials and waste management measures will be implemented during construction: all areas designated for the storage of fuels, oils, chemicals or other hazardous liquids shall have a compacted base and be surrounded by a bund to contain any spillage. These areas shall be covered by a roof structure to minimize the potential for infiltration and contamination of rainwater. Alternatively ventilated containers and individual spill pallets could be used, dependent on the volume of hazardous materials; areas designed for the storage of hazardous materials are to be clearly designated and storage of such materials outside these areas strictly prohibited. an Emergency Spills Contingency Plan shall be prepared as part of the Contractors Environmental Management Plan. apply any waste minimization and management strategies as nominated; dispose of waste to nominated project disposal sites; ensure that the waste management measures are implemented on the project site; prepare and implement a hazardous waste management plan for the disposal of waste oil, batteries and other hazardous materials; ensure that topsoil is stockpiled for used in post construction landscaping; chip and mulch vegetation cleared and reuse it as an organic base for re-vegetation; ensure that materials, which may cause land/water contamination or create odor problems, are not disposed of on the site; keep work areas tidy; ensure that there is the adequate provision of correctly marked waste containers made available at convenient locations for the disposal of wastes; ensure adequate toilet and ablution facilities are provided for the duration of the contract. Domestic sewage and sullage from these facilities shall be subject to suitable treatment prior to discharge in to environment. Under no circumstances untreated wastes shall be discharged into the environment.
V. A.
INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PLAN Institutional framework for Environmental Management
42. Implementation and monitoring of mitigation measures as per the Environmental Monitoring and Management Plan during the construction stage will be the responsibility of the UTY. The environmental specialists of CSC will supervise the monitoring of implementing mitigation measures during construction. After project completion, it is likely that operation and maintenance of the line will also be undertaken by UTY and they will also be responsible for the development and implementation of the monitoring plan for the operational phase. B. Environmental Monitoring Program
43. Compliance monitoring will be conducted in accordance with the EMMP provided with this report. Aspects to be monitored are as follows: Pre-project implementation: updating of EMMP during detailed design phase and inclusion of environmental clauses in bid and contract documents. Construction: environmental performance of contractors with regard to control measures to pertaining to material storage, location of work camp, noise, waste disposal, traffic management, workers safety etc. Operation: O&M practices and environmental effects including, materials handling, soil contamination, noise vibration and air quality.
44. The CSC in cooperation with PIU during project implementation will be required to develop an environmental auditing protocol for the construction period, formulate a detailed monitoring and management plan, supervise the environmental monitoring regularly and submit quarterly reports based on the monitoring data. The PIU shall submit the following environmental reporting documentation to ADB: a) A Baseline Monitoring Report shall be submitted to ADB prior to commencement of civil work and will include a detailed environmental management and monitoring plan (including data collection locations, parameters and frequency), baseline environmental data, relevant standards and data collection responsibilities. b) The environmental monitoring reports will include environmental mitigation measures undertaken, environmental monitoring activities undertaken, details of monitoring data collected, analysis of monitoring results, recommended mitigation measures, environmental training conducted, and environmental regulatory violations. The environmental monitoring reports will be submitted to ADB twice annually during the construction period and twice annually for one year after completion of construction. 45. A lump sum budget is allocated in the environmental mitigation to cover monitoring cost and environmental reporting requirements in the project. PIU will hire a recognized organization for environmental monitoring and ensure that the project sites are monitored regularly for the first year of its operation. 46. Training for the officials is crucial for proper environmental monitoring addressed in the IEE. The contractor shall be provided hands-on-training in the site by the CSC in association with the contractors environmental, health and safety manager.
10
VI.
PUBLIC CONSULTATION AND INFORMATION DISCLOSURE
47. In spite of the current security situation it was possible to meet with selected government officials and villagers from Gur-e-Mar village. No consultation was possible in Hairatan. As the majority of the study area is uninhabited the consultation which has been completed can be considered to have reached a good proportion of those people likely to be affected by the project. 48. Four public consultation events took place on the 19th, 21st and 31st July and also on the rd 3 August. 49. The responses and issues raised were similar from both government officials and the villagers. Both sets welcomed the project and felt that it would contribute to the national and local economies in a number of ways. The villagers felt the railway offered good prospects for increasing trade in farm produce by allowing them to access markets further afield. Noise and dust issues were raised as possible impacts during the construction period but they also stated that these issues were not a significant concern. None of the participants was opposed to the project. VII. FINDINGS AND RECOMMENDATIONS
50. The IEE shows that no major negative environmental impacts are likely to occur due to the construction and operation of the Hairatan - Mazar-i-Sharif rail line. 51. The Project will have some minor environmental impacts, which will be both positive and negative, including: (a) soil erosion, (b) temporary effect on noise and air quality due to construction activities; (c) increased growth in the economy of the region; (d) substantial income and employment opportunities; (e) better indoor air quality; (f) better life style and improved living conditions; (g) reduced health risk, (h) development of small to medium sized enterprises, (i) reduced poverty; and (j) advanced environmental skills and awareness level among the MEW officials. 52. Implementation of appropriate mitigation measures during the design, construction, and operation phases will minimize the negative impacts of the Project to acceptable levels. To ensure that these mitigation measures are implemented and negative impacts avoided, the measures will be included in the contract specification of the Project. Environmental monitoring of the Project will be undertaken regularly through the first three years of its operation to ensure that the measures are being implemented properly. VIII. CONCLUSIONS
53. The project will have significant environmental and social benefits and, if the prescribed mitigation and management measures are fully implemented, the project is unlikely to have major adverse environmental impacts. An environmental monitoring plan has been prepared and responsibilities for implementation assigned. A budget has been allocated for environmental management and monitoring. A full Environmental Impact Assessment (EIA) under ADB guidelines is not required.

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Supplementary Appendix A

(ii) (iii) (iv)

(v) (vi) (vii) B.

b. (i) (ii) (iii)

(v) (vi) (vii)

H. (i) (ii) (iii) (iv) (v)

Advisor for Institutional and Capacity Development A. Background

Draft Railway Legal Framework and Regulations

(iii) (iv) (v) (vi) F. 33.

FINANCIAL ANALYSIS AND FINANCIAL PROJECTIONS I. INTRODUCTION

Table 2: Project Cost Estimates (US$ million)

0.5 130.0 4.0 0.7 4.0 139.2 0.5 0.5 139.7

0.0 130.0 4.0 0.7 0.0 134.7 0.5 0.5 135.2

0.0 100.0 100.0 100.0 0.0 96.8 100.0 100.0 96.8

0.5 0.0 0.0 0.0 4.0 4.5 0.0 0.0 0.0

100.0 0.0 0.0 0.0 100.0 3.2 0.0 0.0 0.0

16.0 13.8 29.8 169.5

11.5 9.9 21.3 121.3

16.0 13.8 29.8 165.0

100.0 100.0 100.0 97.3

0.0 0.0 0.0 4.5

0.0 0.0 0.0 2.7

Source: consultants' estimates.

Source: MPW and consultants assumptions

Weighted average cost of capital (WACC)

Government 4.5 3% 7.00% 0.00% 7.00% 6.00% 0.94% 0.03%

Total 169.5 100%

Financial Internal Rate of Return (FIRR)

Source: ADB staff estimates.

FIRR 3.2% 1.8% 2.9% 2.2%

NPV 34.0 (1.1) 25.8 9.0

III. A. Assumptions 1. General

6,704 1,000 34 7,738

98,262 0 119 98,381

173,595 0 182 173,777

314,655 1,000 301 315,956

588,340 0 547 588,888

14,814 1,164 15,978 117 3,569 3,686

19,331 1,672 21,002 105 8,606 8,711

26,690 2,369 29,059 131 1,000 15,636 16,767

35,847 3,315 39,162 154 1,000 25,716 26,870

49,651 4,836 54,487 194 1,000 41,001 42,195

71,141 7,334 78,475 263 1,000 64,921 66,183

105,533 11,651 117,184 396 1,000 103,496 104,892

162,558 19,124 181,682 619 1,000 167,772 169,390

259,423 32,932 292,355 1,104 1,000 277,959 280,063

431,174 57,556 488,730 1,844 1,000 473,594 476,438

743,377 105,078 848,456 3,447 2,000 830,717 836,164

1,325,177 198,023 1,523,200 6,718 2,000 1,502,191 1,510,908

25% 0% 9.9 2 84%

27% 0% 15.9 2 90%

28% 0% 18.1 2 91%

30% 0% 21.5 2 92%

33% 0% 24.9 2 93%

36% 0% 27.9 2 95%

40% 0% 29.4 2 95%

43% 0% 30.9 2 96%

47% 0% 29.8 2 96%

50% 0% 31.2 2 96%

54% 0% 30.5 2 96%

57% 0% 29.5 2 96%

Existing PMU (ADB)