Attachment 7

Project Administration Manual

Project Number: 46009

Loan/ Grant Number(s): L2852; G0285
08 February 2013

Cambodia: Flood Damage Emergency

Reconstruction Project
Contents
ABBREVIATIONS I
I. PROJECT DESCRIPTION 1
II. IMPLEMENTATION PLANS 3
A. Project Readiness Activities 3
B. Overall Project Implementation Plan 4
III. PROJECT MANAGEMENT ARRANGEMENTS 5
A. Project Implementation Organizations – Roles and Responsibilities 5
B. Key Persons Involved in Implementation 8
C. Project Organization Structure 9
D. Phasing of Subproject Implementation 9
E. Approval Process for New Subprojects 10
IV. COSTS AND FINANCING 11
A. Detailed Cost Table by Financier 12
B. Loan Withdrawal Allocation Table 13
C. Grant Withdrawal Allocation Table 14
D. S-Curve 14
E. Fund Flow Diagram 15
V. FINANCIAL MANAGEMENT 16
A. Financial Management Assessment 16
B. Disbursement 16
C. Disbursement and Liquidation Procedures for Government Funds 18
D. Accounting Systems 19
E. Auditing Requirements 20
VI. PROCUREMENT AND CONSULTING SERVICES 20
A. Advanced Actions and Retroactive Financing 20
B. Procurement of Goods, Works and Consulting Services 20
C. Procurement Plan 21
D. National Competitive Bidding 22
E. Consultant's Terms of Reference 23
VII. SAFEGUARDS 23
VIII. GENDER AND SOCIAL DIMENSIONS 24
IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND
COMMUNICATION 26
A. Project Design and Monitoring Framework 26
B. Monitoring 26
C. Evaluation 26
D. Reporting 27
E. Stakeholder Communication Strategy and Grievance Redress 27
X. ANTICORRUPTION POLICY 28
XI. ACCOUNTABILITY MECHANISM 29
XII. RECORD OF PAM CHANGES 29
Appendixes

Appendix 1: Subproject Selection Criteria

Appendix 2: Indicative List of Proposed Subprojects
Appendix 3: Project Cost Tables
Appendix 4: Summary Note on Retroactive Financing and Advance Action
Appendix 5: Procurement Plan
Appendix 6: Terms of Reference
Appendix 7: Environment Assessment and Review Framework
Appendix 8: Resettlement Framework
Appendix 9: Design and Monitoring Framework
Appendix 10: Risk Assessment and Risk Mitigation Plan
 Project Administration Manual Purpose and Process

The project administration manual (PAM) describes the essential administrative and management
requirements to implement the project on time, within budget, and in accordance with Government and
Asian Development Bank (ADB) policies and procedures. The PAM should include references to all
available templates and instructions either through linkages to relevant URLs or directly incorporated in
the PAM.

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

At Loan Negotiation the borrower and ADB shall agree to the PAM and ensure consistency with the
Loan agreement. Such agreement shall be reflected in the minutes of the Loan Negotiations. In the
event of any discrepancy or contradiction between the PAM and the Loan Agreement, the provisions of
the Loan Agreement shall prevail.

After ADB Board approval of the project's report and recommendations of the President (RRP) changes
in implementation arrangements are subject to agreement and approval pursuant to relevant
Government and ADB administrative procedures (including the Project Administration Instructions) and
upon such approval they will be subsequently incorporated in the PAM.
 Abbreviations

ADB = Asian Development Bank

ADF = Asian Development Fund
APA = audited project accounts
AusAID = Australian Agency for International Development
DMF = design and monitoring framework
EA = executing agency
EARF = environmental assessment and review framework
EIA = environmental impact assessment
EMP = environmental management plan
FGIA = first generation imprest account
GACAP = governance and anticorruption action plan
GDP = gross domestic product
ICB = international competitive bidding
IA = implementing agency
IEE = initial environmental examination
IPP = indigenous people plan
LGAP = labor and gender action plan
MOWRAM = Ministry of Water Resources and Meteorology
MPWT = Ministry of Public Works and Transport
MRD = Ministry of Rural Development
NCB = national competitive bidding
NGOs = nongovernment organizations
PAI = project administration instructions
PAM = project administration manual
PCMU = project coordination and monitoring unit
PMCC = project management coordination committee
PIU = project implementation unit
RGC = Royal Government of Cambodia
RRP = report and recommendation of the President to the Board
SBD = standard bidding documents
SGIA = second generation imprest accounts
SOE = statement of expenditure
SPS = Safeguard Policy Statement
SPRSS = summary poverty reduction and social strategy
SSS = single source selection
TOR = terms of reference
 1

I. PROJECT DESCRIPTION

1. The Project: The project will assist the Royal Government of Cambodia (RGC) to meet
urgent reconstruction priorities affected by 2011 flood focused on (i) roads (national, provincial,
and rural), including bridges and culverts; (ii) irrigation facilities; and (iii) strengthen the
Government’s flood management capacity. The reconstruction of damaged infrastructures will
concentrate in Prey Veng, Kampong Cham, Kampong Thom, Siem Reap, Banteay Meanchey,
and Battambang provinces. The Ministry of Economy and Finance (MEF) will be the executing
agency (EA) of the project. Ministry of Public Works and Transport (MPWT); Ministry of Rural
Development (MRD); and Ministry of Water Resources and Meteorology (MOWRAM) are the
implementing agencies (IAs). As a framework for structuring the Project activities, the
restoration of flood damaged infrastructure has been divided into three stages as follows:

(i) Stage 1 - Immediate repairs to reestablish use of the infrastructure on a temporary basis
and restore minimum functioning levels. The most urgent work has already been
implemented by the RGC using its own resources.
(ii) Stage 2 - Fast track repairs where it is necessary to substantially repair the damage
before the next wet season (by around June-July 2012) to secure the existing
(undamaged) works and thus avoid more extensive damage in the coming wet season.
Urgent preparation of packages under this stage has been the emphasis of the line
ministries; in addition, the RGC has already allocated funding that will partially cover the
work required.
(iii) Stage 3 - Remaining flood damage restoration to complete the remaining damage
repairs, preferably within the following two dry season construction periods.

2. Impact and Outcome: The impact of the project is economic and social recovery from
the 2011 floods in project provinces. The outcome of the project is restoration of critical public
and social infrastructure assets necessary to restore livelihoods and access in project provinces
that will secure the assets against future flooding. The principle of “build back better” will be
followed as suitable 1.

3. Outputs: The project will have the following outputs:

4. Output 1: National and provincial road restoration. The project will reconstruct flood
damaged national and provincial roads in 4 provinces. In Prey Veng, 2 km of a ring road, which
also serves as a flood protection dyke for Prey Veng City 2, will be strengthened, and 5 bridges
along National Road 11 which were severely weakened by the floods will be replaced and
improved. In Kampong Cham, Banteay Meancheay and Battambang provinces, 72 km of
provincial roads will be repaired and upgraded, and seven structures and five bridges replaced.
The works will be carried out in the 3 stages. Temporary Stage 1 work has already been
completed under government funding to restore minimum function of the roads. Stage 2 is
urgent work that needs to be fast-tracked with substantial works done during the 2012 dry
season to secure functioning of the roads during the 2012 wet season. Stage 3 works will be
prepared to commence after the 2012 wet season.

1
Meaning to rectify any deficiencies with the existing structure which had been causing it to operate below standard,
and to reconstruct it to the correct standard for its intended function, including its ability to withstand floods in line
with the appropriate design standards. This is adopted as much of the damaged infrastructure was known to be
operating below standard, and was therefore more susceptible to flood damage.
2
The dyke was in danger of collapsing during the 2011 floods. The consequences would have been extensive
flooding throughout Prey Veng City with severe impacts.
2

5. Output 2: Rural roads restoration. The Project will reconstruct about 450 km of flood
damaged rural roads in five provinces of Prey Veng, Kampong Cham, Kampong Thom, Siem
Reap and Banteay Meancheay. As mentioned earlier, reconstruction civil works will be carried
out in three stages of which Stage 1 has been already completed by the RGC. During Stage 2
project roads will be repaired to facilitate immediate access by re-shaping the road section and
providing a 100 to 150 mm laterite overlay, before the rains in 2012. During Stage 3, the road
sections will be further strengthened to protect against future flood damage with cross-drainage
facilities and paving of laterite. This output will carry out a demonstration exercise relating to
labor intensive construction and maintenance of rural roads 3.

6. Output 3: Irrigation and flood control. Under this output, about 26 flood damaged
irrigation schemes covering about 25,000 ha 4 will be repaired in at least 5 provinces: Prey Veng,
Kampong Cham, Kampong Thom, Siem Reap, and Battambang. Since flood restoration work
for irrigation schemes often involves relatively small works to restore full operation, it is
proposed that schemes in other provinces may also be considered depending on the detailed
assessments during implementation, subject to agreement of the Executing Agency (EA) and
ADB. Stage 1 works involved temporary measures during 2011 mainly using sand bags and
pumps to restore irrigation as far as possible. It is proposed to complete relatively small scale
Stage 2 works before the 2012 wet season in 19 schemes to restore most of the irrigation
operations, and to secure undamaged works for the next wet season. Stage 3 covers works that
require more detailed investigations, and this work will commence after the 2012 wet season.

7. Output 4: Project and Flood Management. This output will support the EA to
undertake overall oversight and management of the Project. It will be supported by consultants
to ensure that procedures are followed and that implementation schedules are kept on track.
This output will also provide bridging resources, supported by a consultant and capacity
development inputs, to link the restoration outputs under the Project with support for
damage/flood management activities. The activities will strengthen NCDM’s capacity to harness
the resources and expertise of the relevant line ministries and other organizations, and provide
a cohesive and robust approach for prevention, mitigation, and preparedness to manage future
floods. They will also include CBFRM activities, targeting at-risk communities at district,
commune and village levels in areas covered under the Project. 5

3
The approach to promoting labor intensity (where feasible) will follow the principles of the public works component
of Cambodia’s 2011 National Social Protection Strategy for the Poor and Vulnerable. The approach to improving
maintenance of the rural roads will draw from the ongoing related activities of the Loan 2670-CAM: Rural Roads
Improvement Project and Loan 2839-CAM: Provincial Roads Improvement Project. See the note on Labor-Based
Construction and Maintenance for Flood Damage (accessible from the list of linked documents in Appendix 2).
4
These include 10 subprojects under the ADB funded Northwest Irrigation Sector Irrigation Project which are
included in the 19 to be restored under Stage 2.
5
Piloted under ADB. 2005. Technical Assistance to the Kingdom of Cambodia for Community Self-Reliance and
Flood Risk Reduction. Manila (TA 4574-CAM)
 3

II. IMPLEMENTATION PLANS

A. Project Readiness Activities 6

2012
Responsible
Activities Jan Feb Mar Apr May Jun Jul
Party /remarks
Establish PCMU MEF
MOWRAM,
Establish PIUs
MPWT, MRD
MEF,MOWRAM,
Establish PMCC
MPWT, MRD
Advance contracting for recruitment
MOWRAM,
of design and supervision
MPWT, MRD
consultants and award of contracts
Advance contracting for recruitment
ADB, MEF
of consultants for PCMU at MEF
Allocation of Government funds
under retroactive financing for MEF /in practice
design and supervision consultants this was not
and civil work contracts for stage 2 necessary.
subprojects
Advance contracting including
MEF,MOWRAM,
award of civil work contracts for
MPWT, MRD
stage 2 subprojects
ADB Board approval ADB
Loan signing MEF
Government legal opinion provided MEF
Loan effectiveness ADB
PCMU (expected
PCMU Consultants mobilized
in Aug/Sep 2012)

ADB = Asian Development Bank, MEF = Ministry of Economy and Finance, MOWRAM = Ministry of Water
Resources and Meteorology, MPWT= Ministry of Public Works and Transport, MRD = Ministry of Rural Development,
PCMU = Project Coordination and Monitoring Unit, PIU = Project Implementation Unit, PMCC= Project Management
Coordination Committee

Implementation Progressed

6
ADB has approved the small scale technical assistance (SSTA) of $225,000, which is being administered by ADB
to support the Government in undertaking advance actions relating to project management, financial management,
procurement, and safeguards. The SSTA 8051 has a provision of 4.5 person months of international individual
consultants and 20 person months of national individual consultants.
4

B. Overall Project Implementation Plan

8. The project will be implemented over a three year period. The overall project
implementation schedule is provided below.

DDIS= Detailed Design and Implementation Support, PCMU= Project Coordination and Monitoring Unit, PIU= Project
Implementation Unit, PCR= Project Completion Report
Source: ADB Estimates
 5

III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Implementation Organizations – Roles and Responsibilities

Project Implementation Management Roles and Responsibilities

Organizations
• Project Management  Provide necessary assistance and guidance to ensure that the
Coordination Project is implemented efficiently within the overall policies
Committee(PMCC) and guidelines of the Government and the ADB
 Monitor the overall project implementation
 Ensure close coordination between all Project activities and
activities sponsored by other DPs
 Ensure that ADB is informed in a timely manner of project
progress and any issues arising
 Hold meeting two times per year or as required, likely
following the review missions.
Executing Agency:
• MEF – Project Coordination  Coordinate with ADB and other line agencies for smooth
and Monitoring Unit (PCMU) project implementation
 Monitor and ensure the compliance of covenants, particularly
submission of audited project accounts.
 Negotiate and sign contract of project management support
consultant
 Monitor and supervise the project management support
consultant
 Negotiate and sign the contract of disaster management
consultant
 Monitor and supervise the disaster management institutional
specialist
 Update procurement plan and monitor the procurement
process prepared by PIUs.
 Examine the subprojects relating to costs and safeguard
requirements
 Coordinate environment and social safeguards planning and
implementation
 Examine preparing bidding documents, request for proposal,
and bid evaluation reports
 Consolidate accounts and submit withdrawal applications to
ADB for direct payments and reimbursement.
 Open and manage imprest account for ADB loan
 Ensure IAs open second generation imprest account.
 Submit all audited project accounts and financial statements
pertaining to the project within 9 months of the end of the
fiscal year.
 Coordinate project review missions
 Process and submit to ADB any request, when required, for
reallocation of loan proceeds
 Prepare consolidated quarterly progress reports for timely
submission to ADB
 Prepare project completion report and timely submit to ADB
6

Implementing Agencies (IAs):

• For Output 1: MPWT  Establish Project Implementation Unit

 Assume the following roles and responsibilities to
ensure the successful implementation of Output 1:
 Establish second generation imprest account,
maintains account and submit expenditures to the
PCMU for consolidation.
 Select subprojects for stage 2 and stage 3 and seek
endorsement from PCMU.
 Establish procurement review committee to oversee
recruitment of consultants and procurement of goods
and works.
 Select and procure detailed design, supervision and
implementation consultant
 Procure contractors and suppliers.
 Monitor performance of suppliers, consultants, and
contractors.
 Make payments for activities performed under the
scope of the Project.
 Screen and classify subprojects in accordance with
ADB’s Safeguard Policy Statements (SPS) 2009
 Prepare, implement and monitor safeguards in
accordance SPS 2009, and Loan agreement
 Implement resettlement and environment monitoring
plans.
 Prepare, implement and monitoring of gender action
plan.
 Establish focal persons to handle safeguards
requirements
 Establish a grievance redress mechanism to address
all subproject-related grievances
 Disseminate and disclose safeguards, audited project
accounts, procurement and contracts related
information
 Prepare monthly and quarterly progress reports for
timely submission to EA
 Undertake regular monitoring of subprojects.

• For Output 2: MRD  As the above roles and responsibilities of MPWT, but
for the delivering of Output 2

• For Output 3 Ministry of Water  As the above roles and responsibilities of MPWT and
Resources and Meteorology MRD, but for the delivering of Output 3;
(MOWRAM)
• Detailed Design, Implementation and  Responsible for field surveys, engineering studies,
Supervision Consultants(DDIS) for all designs, supervisions, safeguards preparation and
three outputs implementation.
 Assist relevant IAs in preparing bid documents
including design, review of designs/specifications and
BOQs
 Assist IAs in contract awards/bids evaluation,
preparation, implementation, and monitoring of
safeguard activities.
 Assist IAs in execution and supervision of works
 7

 Certify physical completion of works.

 Certify payments of works.
 Help relevant IAs in maintaining all projects accounts.
 Prepare all project reports including financial and
physical progress reports to be submitted to PCMU
 Assists IA in disseminating and publishing
procurements and contracts related information.
• Project Management Consultants at  Assist PCMU in overall project management and
PCMU coordination.
 Assist PCMU in reviewing and endorsing
procurement, safeguard and financial management
related documents submitted by IAs
 Assist PCMU in preparing all required documents for
submission to ADB
 Assist PCMU in establishing performance monitoring
system and website for disclosure
• Disaster Management Institutional  Assist the Government in undertaking the capacity
Specialist development activities on flood management
• ADB  Examine the subprojects relating to costs and
safeguard requirements
 Coordinate environment and social safeguards
planning and implementation
 Examine bidding documents, request for proposal,
and bid evaluation reports
 Select the Project Management Consultants and
disaster management specialist on behalf of the
Government
 Consolidate accounts and submit withdrawal
applications to ADB for direct payments and
reimbursement.
 Open and manage imprest account for ADB loan
 Ensure IAs open second generation imprest account.
 Submit all audited project accounts and financial
statements pertaining to the project within 9 months
of the end of the fiscal year.
 Process and submit to ADB any request, when
required, for reallocation of loan proceeds
 Prepare project completion report and submit to ADB

Table 1: Composition of Project Management Coordination Committee

Title Positions

Chair (MEF) 1
Members (MPWT, MRD, MOWRAM, MEF) 5
MEF = Ministry of Economy and Finance, MOWRAM = Ministry of Water Resources and Meteorology, MPWT=
Ministry of Public Works and Transport, MRD = Ministry of Rural Development

Table 2: Composition of Project Coordination and Monitoring Unit

Title Positions
PCMU Director 1
PCMU Manager 1
Technical Officers 8
PCMU= Project Coordination and Monitoring Unit
8

Table 3: Composition of Project Implementation Unit for all three IAs

Title Positions
PIU Director 1
PIU Manager 1
Technical Officers 4
Procurement Officer 1
Finance Officer 1
Administrative Officer 1
Environment Officer 1
Safeguard Officer 1
Monitoring and Evaluation Officer 1
Gender Officer 1
7
Accountant 1
Site Engineer/ Provincial Focal Point 1 at each project province
PIU- Project Implementation Unit

B. Key Persons Involved in Implementation

Executing Agency
Ministry of Economy and Finance Officer's Name: H.E. Chan Sothy
Position: Deputy Secretary General
Telephone:+855 012 851 448
Email address: chan_sothy@online.com.kh
Implementing Agencies
Ministry of Public Works and Officer's Name: H.E. Kem Borey
Transport Position: Director General of Public Works
Telephone: +855 12 900 739
Email address: kemborey12@yahoo.com
Ministry of Rural Development Officer's Name: H.E. Chan Darong
Position: Director General of Technical Affairs
Telephone: +855 12 599 599
Email address: darongchan@gmail.com
Ministry of Water Resources and Officer's Name: H.E. Ponh Sachak
Meteorology Position: Director General of Technical Affairs
Telephone: +855 12 908 751
Email address: sachak_p@yahoo.com
Asian Development Bank

Division Director Staff Name: Mr. Eric Sidgwick

Position: Country Director, CARM, SERD
Telephone No. +855 23 215 805
Email address: esidgwick@adb.org

Mission Leader Staff Name: Mr. Nida Ouk

Position: Senior Project Officer
Telephone No. +855 23 215 805
Email address: nouk@adb.org

7
To be engaged as an individual consultant under the project financing on an as needed basis.
 9

C. Project Organization Structure

PMCC
(chaired by MEF)

ADB & EA: MEF

AusAID PCMU

IA1: MPWT IA2: MRD IA3: MOWRAM

DDIS
DDIS DDIS
Consultants
Consultants Consultants

Project and Flood

Contractors Contractors Management
Contractors
Consultants
Procurement

ADB = Asian Development Bank, AusAID= Australian Agency for International Development, DDIS= Detailed Design
and Implementation Support Consultants, EA= Executing Agency, IA = Implementing Agency, MEF = Ministry of
Economy and Finance, MOWRAM = Ministry of Water Resources and Meteorology, MPWT= Ministry of Public Works
and Transport, MRD = Ministry of Rural Development, PCMU = Project Coordination and Monitoring Unit, PMCC=
Project Management Coordination Committee.

D. Phasing of Subproject Implementation

9. The restoration of flood damaged infrastructure will follow a framework as mentioned in

paragraph 1 above. The subprojects will be implemented in such a way to provide flexibility to
adjust the scope and prioritize works following more detailed damage assessments. The project
will focus primarily on rehabilitation of stage 2 and stage 3 subprojects. ADB’s assistance will
not be financing stage 1 subprojects. The project is required to follow the subproject selection
criteria, which is in Appendix 1. The indicative list of subprojects is in Appendix 2, with the list
of stage 2 subprojects confirmed during the loan fact finding mission. The government may
proceed for implementation of stage 2 subprojects after necessary safeguard requirements are
10

met. Confirmation on stage 3 subprojects will be undertaken after the approval of the project. 8
Given the short overall time frame of the project, it will be essential to review funding allocations
to each of the outputs at an early stage of implementation. It is therefore agreed that the EA, the
IAs, and ADB will jointly undertake an in-depth review of progress within 9 months of loan
effectiveness to determine and agree on potential reallocation of funds on the basis of progress
to date and the readiness of remaining subprojects under each of the outputs.

10. There may be some subprojects that will comprise a mix of both Stage 2 and 3 works,
with some repairs that must be done before the wet season to maintain operation and safeguard
the undamaged works, while other repairs would need to be deferred until the next dry season.
In this case, the best solution for implementing both stages would have to be judged for each
subproject depending on the specific reasons for the need for 2-stage implementation. As far as
practical, Stage 2 works should be completed under separate packages to be implemented by
the end of the 2012 dry season, and subprojects involving similar works in the same
geographical area with civil work contracts.

E. Approval Process for New Subprojects

1. Approval prior to commencing detailed design

11. Each PIU will be responsible for selection, preparation, submission, implementation, and
benefits monitoring and evaluation of their own subprojects under the overall guidance of the
PCMU. The PIUs will select the subproject based on the selection criteria, and prior to
commencing detailed design will submit details of the proposed subproject, together with
subproject’s safeguards classification, to the PCMU for endorsement and to ADB for no
objection. The submission will include a brief description and justification of the subproject, with
adequate detail (including selected photographs if possible) to support its compliance with the
selection criteria. Clearance for Stage 2 subprojects will be endorsed by the FDERP fact-finding
mission based on field inspections of each of the subprojects.

2. Approval prior to award of contract

12. Before awarding civil works contracts for all subprojects, the IAs will prepare and submit
to ADB for approval all required safeguard documents in accordance with the ADB’s SPS 2009,
the Environment Assessment Review Framework (EARF) and Resettlement Framework (RF).
IAs will also need PCMU endorsement and ADB’s no objection to award the civil works
contracts, for subprojects requiring resettlement plans and initial environment examinations. All
Stage 2 subprojects will be subject to ADB’s prior review and no objection for contract award,
including those that are proposed for retroactive financing. All Stage 3 subprojects will be sent
to the PCMU and ADB for endorsement. Safeguard documents for Stage 3 subprojects require
ADB’s prior review and approval. However, approval of ADB on contract packages of the
subprojects will be based on the thresholds and procedures set out and agreed with the
government in the loan agreement and procurement plan.

3. During Implementation

13. ADB will undertake periodic review of selected subprojects. For any subproject that does
not meet the selection criteria, ADB retains the right not to finance or ask for refund of financing.

8
This timing will allow for the preparation of subproject designs and the completion of damage restoration works
(Stage 3) over two full construction seasons starting in October 2012 to September 2014, and six months for
project closing activities.
 11

The IA will maintain the information on the subproject selection readily available for review by
ADB or its consultants at all times.

(i) If it is determined by ADB that any expenditures withdrawn from the Loan and Grant
Account by or on behalf of the Borrower and Recipient have been applied to finance
ineligible expenditures (whether by way of retroactive financing or otherwise), including
but not limited to expenditures in relation to subprojects that do not satisfy the subproject
criteria or have not been approved according to the procedures set out above, the
Borrower and Recipient must promptly refund such amounts equal to such expenditures
and accrued interest to ADB.

(ii) Even if ADB has previously approved to the inclusion of the Subproject, ADB reserves
the right to require refund of the ineligible expenditures financed if the approval or “no-
objection” was based on incomplete, inaccurate, or misleading information or the
Subproject has been substantially modified without ADB’s prior approval.

14. Record: The PIUs will keep appropriate record evidencing its assessment of the
subprojects' compliance with the selection criteria and implementation arrangements. ADB may
request the PIU to make available such information on any subproject within two weeks.
Disbursements for the relevant subprojects or other subprojects implemented by that PIU may
be suspended until compliance.

15. Compliance: If it is determined by ADB at any time that the subproject selection criteria
and/or implementation arrangements have not been complied with, the subproject will not be
eligible for ADB and Government of Australia financing. The Government will refund any loan
and grant proceeds already withdrawn in respect of such ineligible subprojects to ADB upon
request by ADB.

IV. COSTS AND FINANCING

16. The project is estimated to cost US$67.17 million including taxes and duties. RGC has
requested the provision of an Emergency Assistance Loan from ADB. ADB will provide an ADF
loan of SDR 35,347,000 (Equivalent to US$55.0 million) to help finance the project. The ADF
loan will have an interest charge at the rate of 1% per annum (interest during construction to be
capitalized in the ADF loan), a term of 40 years, including a grace period of 10 years, with
repayment of principal at 2% a year for the first 10 years after the grace period and 4% a year
thereafter and such other terms and conditions to be set forth in the loan agreement. The
Government of Australia, has expressed interest in providing AUS$ 5 million (approximately
equivalent to US$5.25 million). The RGC will contribute in-kind expenditures, resettlement cost
and taxes and duties in the amount of US $6. 91 million equivalent. Detailed cost by financier,
loan and grant withdrawal allocation tables and the S-curve are provided below. The cost tables
by expenditures, outputs and years are in Appendix 3.
12

A. Detailed Cost Table by Financier

* The Government of Australia financing will be front loaded at the contract commitment level for Civil Works
** This amount shall have deducted from it ADB’s administration fee, audit cost, bank charges, and a provision for foreign
exchange fluctuations (if any), to the extent that these items are not covered by interest and investment income earned by ADB
on this or any additional Grant from the Government of Australia.
*** The contribution of Government in the incremental costs are in kind, and taxes and duties will be funded through government
exemptions.
 13

B. Loan Withdrawal Allocation Table

ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS
(Flood Damage Emergency Reconstruction Project)
CATEGORY ADB FINANCING
Total Amount Allocated for ADB
Percentage and
Financing
Basis for Withdrawal
Number Item (SDR) from the Loan
Account
Category Subcategory
1 Works 26,064,000
1A Component 1 13,076,000 100% of total
expenditure claimed*
1B Component 2 8,056,000 100% of total
expenditure claimed*
1C Component 3 4,932,000 100% of total
expenditure claimed*
2 Equipment 258,000
2A Component 1 92,000 100% of total
expenditure claimed*
2B Component 2 50,000 100% of total
expenditure claimed*
2C Component 3 77,000 100% of total
expenditure claimed*
2D Component 4 39,000 100% of total
expenditure claimed*
3 Consulting Services 4,039,000
3A Component 1 1,588,000 100% of total
expenditure claimed*
3B Component 2 970,000 100% of total
expenditure claimed*
3C Component 3 887,000 100% of total
expenditure claimed*
3D Component 4 594,000 100% of total
expenditure claimed*
4 Incremental 817,000
Administrative Costs
4A Component 1 290,000 100% of total
expenditure claimed
4B Component 2 181,000 100% of total
expenditure claimed
4C Component 3 271,000 100% of total
expenditure claimed
4D Component 4 75,000 100% of total
expenditure claimed
5 Interest Charge 559,000 100 % of amounts due
6 Unallocated 3,610,000
Total 35,347,000
* Exclusive of taxes and duties imposed within the territory of the Borrower.
 14

C. Grant Withdrawal Allocation Table

ALLOCATION AND WITHDRAWAL OF GRANT PROCEEDS

(Flood Damage Emergency Reconstruction Project)
CATEGORY
Total Amount Allocated
for Government of
Percentage and Basis for
Australia Financing
Withdrawal from the Grant
Number Item ($)
Account
Category Subcategory
1 Works 5,000,000
1A Component 1 2,500,000 100% of total expenditure
claimed*
1B Component 2 1,500,000 100% of total expenditure
claimed*
1C Component 3 1,000,000 100% of total expenditure
claimed*
2 Unallocated 250,000
Total 5,250,000**

* Exclusive of local taxes and duties imposed within the territory of the Recipient.
** This amount shall have deducted from it ADB’s administration fee, audit cost, bank charges, and a provision for
foreign exchange fluctuations (if any), to the extent that these items are not covered by interest and investment
income earned by ADB on this or any additional Grant from the Government of Australia.

D. S-Curve
 15

i) Cumulative Contract Award and Disbursement Projections for ADB and AusAID Financing

Projections in 2012 2013 2014 2015

million US$ I II Qtr III Qtr IV Qtr I Qtr II Qtr III Qtr IV Qtr I Qtr II Qtr III Qtr IV I Qtr
Qtr Qtr
Contract Award 0.0 13.07 24.97 28.48 43.35 49.54 55.38 58.57 58.77 58.97 59.17 59.37 59.57
Disbursement 0.0 0.71 3.27 3.47 11.62 22.59 35.12 39.71 43.72 49.15 54.57 57.80 59.57

Yearly Contract Award and Disbursement Projections for ADB and AusAID Financing
Projections 2012 2013 2014 2015
in million I II III Qtr IV Total I II Qtr III Qtr IV Total I II III IV Total I Total
US$ Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
Contract 0.0 13.07 11.90 3.51 28.48 14.87 6.19 5.84 3.19 30.09 0.20 0.20 0.20 0.20 0.80 0.20 0.20
Award
Disbursement 0.0 0.71 2.56 0.20 3.47 8.16 10.97 12.53 4.60 36.25 4.01 5.43 5.42 3.23 18.09 1.77 1.77

E. Fund Flow Diagram

ADB Loan

MEF/PCMU
(EA)/(FGIA)

Direct
Payments

MPWT MRD MOWRAM

(IA)/(Sub-Account) (IA)/(Sub-Account) (IA)/(Sub-Account)

Consultants, Contractors and Suppliers

ADB= Asian Development Bank, EA= Executing Agency, IA= Implementing Agency, FGIA= First Generation Imprest
Account, MEF Ministry of Economy and Finance, MOWRAM = Ministry of Water Resources and Meteorology,
MPWT= Ministry of Public Works and Transport, MRD = Ministry of Rural Development, PCMU = Project
Coordination and Monitoring Unit, Sub-Account formerly called SGIA= Second Generation Imprest Account
16

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

17. The financial management assessments of the three IAs for this project were based on
the detailed financial management assessments carried out during the approval of new
projects 9 in 2011. In addition, the IAs were also requested to fill out ADB’s standard financial
management assessment checklists during project preparation. The purpose of the assessment
was to determine the robustness of the accounting, financial controls and internal audit
arrangements, and the capability of the IAs to meet all the fiduciary requirements which are set
out in the loan agreement. The assessments indicate that on the whole, the prevailing
government financial, accounting, and auditing rules and systems meet the generally
acceptable international accounting and auditing standards. Regulations have adequate internal
control systems and financial reporting arrangements. All the IAs have worked in the past with
ADB and are implementing ongoing ADB projects. They also have been part of ADB’s capacity
development activities 10 particularly on public financial management.

18. However, there is still a varying degree of financial record keeping capacity at the PIU
levels. In view of this, the MPWT and MOWRAM PIUs will recruit individual accounting
consultants while the MRD PIU has agreed to utilize existing staff who are successfully handling
financial management of the ongoing ADB’s Rural Road Improvement Project. Likewise, team
leader and deputy team leader to be recruited at the PCMU level will have a strong financial and
procurement background to ensure sound financial management and procurement system are
established and maintained at the PCMU and PIUs level during project implementation.
Further, ADB’s small scale technical assistance to undertake advance actions for this project
has provision of a financial management expert. The financial management expert will assist the
PCMU and PIUs in setting up the financial management system during the initial phase of
project implementation. Assessment and review of internal controls and accounting systems
using the checklists on asset verification, procurement and financial management will be carried
out by CARM during review missions.

B. Disbursement

19. The loan and grant proceeds will be disbursed in accordance with ADB’s Loan
Disbursement Handbook (2012, as amended from time to time), 11 and detailed arrangements
agreed upon between the Government and ADB.

20. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS), 12 ADB funds may not be
applied to the activities described on the ADB Prohibited Investment Activities List set forth at
Appendix 5 of the SPS. All financial institutions will ensure that their investments are in
compliance with applicable national laws and regulations and will apply the prohibited
investment activities list to subprojects financed by ADB.

9
ADB. 2011. Report and Recommendation of the President to the Board of Directors: Provincial Road Improvement
Project. ADB. 2010. Report and Recommendation of the President to the Board of Directors: Rural Road
Improvement Project. ADB. 2010. Report and Recommendation of the President to the Board of Directors: Water
Resource Management Sector Development Project.
10
MRD and MOWRAM have been participants in ADB’s Public Financial Management for Rural Development
Program
11
Available at: http://www.adb.org/sites/default/files/loan-disbursement-handbook.pdf
12
Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf
 17

21. Disbursements from the ADB Loan for consulting services, civil works and goods under
the international competitive bidding(ICB) procedures will generally be paid through direct
payment procedures as defined in ADB’s Loan Disbursement Handbook (2012, amended from
time to time). Likewise, civil works contracts of $1 million and above using national competitive
bidding (NCB) and direct contracting procedures will generally be paid directly by ADB.
Disbursements for civil works using direct contracting and NCB procedures for contracts less
than $1 million will be generally paid through an imprest account. Likewise, civil works contracts
using shopping methods, and goods using NCB and shopping procedures will be generally paid
using an imprest account. In addition, all the related incremental expenses will be generally
paid through an imprest account. The Government of Australia co-financing will fund only the
civil works, and disbursement will be in accordance with the joint cofinancing agreement
between ADB and the Government of Australia.

22. The PCMU representing the MEF as the EA, will immediately after loan effectiveness,
establish the first generation imprest account (FGIA) for the ADB Loan at the National Bank of
Cambodia (NBC). The currency of the imprest account will be US Dollar and managed by the
PCMU. The PCMU will coordinate with other IAs to open (Sub-Account) at the National Bank of
Cambodia or commercial banks acceptable to ADB for the PIU/MPWT, PIU/MRD, and
PIU/MOWRAM respectively. The currency of the Sub-Account is US dollar. MEF, MPWT, MRD
and MOWRAM have sufficient past experience in administering ADB-funded project accounts,
and disbursement arrangements have been satisfactory to ADB. PCMU will be responsible for
preparing the annual contract awards and disbursement projections. It will be responsible in (i)
requesting budgetary allocations for counterpart funds, (ii) preparation of withdrawal
applications, and (iii) sending the withdrawal applications to ADB. PCMU and the PIUs will be
responsible in collecting supporting documents for the project expenditures they have incurred.

23. The maximum ceiling of the FGIA will not at any time exceed the estimated ADB
financed expenditures to be paid from the FGIA account for the next 6 months or 10% of the
loan amount, whichever is lower. The maximum ceiling of the Sub-Account with MPWT will be
equivalent to 6 months of estimated expenditures to be funded from the Sub-Account or $2
million, whichever is lower. The ceiling of each Sub-Account with MRD and MOWRAM will be
equivalent to 6 months estimated expenditures to be funded from the respective Sub-Account or
$1 million, whichever is lower. 13

24. The request for initial advance to the imprest account should be accompanied by an
Estimate of Expenditure Sheet 14 setting out the estimated expenditures for the first six (6)
months of project implementation, and submission of evidence satisfactory to ADB that the
imprest account has been duly opened. For every liquidation and replenishment request of the
imprest account, the borrower will furnish to ADB (a) Statement of Account (Bank Statement)
where the imprest account is maintained, and (b) the Imprest Account Reconciliation Statement
(IARS) reconciling the above mentioned bank statement against the EA’s records. 15

25. Before the submission of the first withdrawal application, the borrower should submit to
ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal
applications on behalf of the borrower, together with the authenticated specimen signatures of
each authorized person. The minimum value per withdrawal application is US$100,000, unless
otherwise approved by ADB. The borrower is to consolidate claims to meet this limit for
reimbursement and imprest account claims. Withdrawal applications and supporting documents
13
Bank charges from the operation of the imprest accounts may be financed by the ADB loan.
14
Available in Appendix 29 of the Loan Disbursement Handbook.
15
Follow the format provided in Appendix 30 of the Loan Disbursement Handbook.
18

will demonstrate, among other things that the goods, and/or services were produced in or from
ADB members, and are eligible for ADB financing.

26. The statement of expenditure (SOE) will be used to reimburse and replenish the eligible
expenditures and liquidate advances to the imprest accounts to ensure speedy project
implementation. Any individual payment to be reimbursed or liquidated under this procedure
shall not exceed the equivalent of $100,000 for the FGIA and the Sub-Accounts. Payments
exceeding the SOE ceiling, supporting documents should be provided. Supporting documents
include contracts (contract terms and conditions relating to payments), contractor's invoice
claims, interim payment certificates and other documents required in the contract, evidence of
payments (official receipts, bank payment slips). The SOE records should be well maintained
and made available for review by ADB's disbursement and review mission or upon ADB's
request for submission of supporting documents on a sampling basis, and for independent audit
purposes. 16

C. Disbursement and Liquidation Procedures for Government Funds

27. Withdrawal of government counterpart funds must be carried out in accordance with the
Government Policies and Procedures. The IAs will be responsible for submitting withdrawal
applications to MEF. Counterpart funds withdrawal applications should be made in accordance
with the budget plan agreed between the IAs and MEF. Counterpart funds may only be
withdrawn for expenditures of the project which are specified in the project loan and grant
agreements. Projects Team should set out the expenditure percentages, for the project in the
Project Finance Manual as a supplement to the main Financial Management Manual (May
2012, updated time to time). Counterpart funds withdrawals may be made for:

• Imprest Account Initial Advance

• Imprest Account Replenishment
• Direct Payment to Supplier or Contractor

28. Key Internal Controls: Withdrawal applications must be signed by an authorized

signatory or signatories. Withdrawal applications must be sequentially numbered starting with
the number one. Counterpart funds advanced to projects must be held in a Government
Counterpart Funds/Project Account at the National Bank of Cambodia or other approved
commercial bank.

29. Counterpart Funds Initial Advance: Each PIU completes the Government Withdrawal
Application form for the initial advance of counterpart funds together with supporting documents
and submits to the MEF/DIC – Department of Investment and Cooperation (DIC). The maximum
amount of the advance of counterpart funds will be agreed between the PIUs and MEF. The
Government Withdrawal Application Form must be signed by the authorized signatories of PIUs
and submitted to the MEF/DIC. The Government Withdrawal Application must be recorded in
the Project Counterpart Funds WA Register.

30. The MEF/DIC reviews the completed forms and submits for approval of MEF
Management. Thereafter arrangements are made to transfer the funds from the General
Department of National Treasury Accounts to the Project’s Counterpart Funds Imprest Account

16
Checklist for SOE procedures and formats are available at http://www.adb.org/sites/default/files/loan-disbursement-
handbook.pdf
 19

and advises the respective PIU of the transfer. On receipt of advice from the NBC that the
funds have been deposited into the Counterpart Funds Account, the receipt of the funds should
be recorded in the General Ledger and the Government WA Register must be up-dated.

31. Counterpart Funds Replenishment: The Project Team completes the Government
Withdrawal Application form and attaches a statement of actual expenditure together with the
disbursement tracking form for counterpart funds. Supporting expenditure documentation must
be maintained by the Project Team for subsequent review by MEF or audit. The Government
Withdrawal Application Form must be signed by the authorized signatories of the PIU and
submitted to the MEF/DIC. The Government Withdrawal Application must be recorded in the
Project Counterpart Funds WA Register.

32. The DIC reviews the completed forms and submits for approval of MEF Management.
Thereafter arrangements are made to transfers the funds from the General Department of
National Treasury Accounts to the Project’s Counterpart Funds Imprest Account. On receipt of
advice from the NBC that the funds have been deposited into the Counterpart Funds Account,
the receipt of the funds should be recorded in the General Ledger and the Government WA
Register must be up-dated.

33. Direct Payment to Supplier or Contractor: The Project Team completes a

Government Withdrawal Application Form. Separate withdrawal applications are required for
each payment in different currencies. The following documentation must be attached to the
Withdrawal Application Forms:

• Copy of Contract(s).
• Supplier or contractor invoice or claim
• For civil work – summary of work progress certified by project technical officer and
approved by the relevant Project authorized officer
• For equipment and materials purchased - evidence of shipment, either a copy of the
bill of lading or the forwarder's certificate
• Advance security such as a bank guarantee in the case of advance payments if
required under the terms of the contract, or where an unusually large advance
payment is made.

34. The Government Withdrawal Application Form must be signed by the authorized
signatories of the PIU and submitted to the MEF/DIC. The Government Withdrawal Application
must be recorded in the Project Counterpart Funds WA Register. The DIC reviews the
completed forms and submits for approval of MEF Management. Thereafter arrangements are
made to transfer the funds from the General Department of National Treasury Accounts to the
accounts of the supplier or contractor. On receipt of advice from the DIC that the payments
have been made, the receipt of the counterpart funds should be recorded in the General Ledger
and the Government WA Register must be updated.

D. Accounting Systems

35. The EA and the IAs will maintain separate project accounts and records by funding
source for all expenditures incurred on the Project. Recording and reporting of transactions of
project expenditures will be consistent with the Chart of Accounts and Budget Classification of
20

the Government (2007) and Government's 2012 Standard Operating Procedures (SOP) for
Externally Financed Projects/Programs (as updated from time to time). 17

E. Auditing Requirements

36. PCMU will cause the detailed consolidated project accounts to be audited in accordance
with International Standards on Auditing by an auditor acceptable to ADB. The audited accounts
will be submitted in the English language to ADB within 6 months of the end of the fiscal year by
the EA. The annual audit report will include a separate audit opinion on the use of the imprest
accounts, Sub-Account, the SOE procedures (as applicable) and financial loan covenants. The
Government has been made aware of ADB’s policy on delayed submission, and the
requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the
right to verify the project's financial accounts to confirm that the share of ADB’s financing is used
in accordance with ADB’s policies and procedures. The audited project accounts must be
disclosed in the ADB and the EA website.

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advanced Actions and Retroactive Financing

37. The issuance of invitations to bid under advance actions and retroactive financing will be
subject to ADB approval. The Government has been advised that approval of advanced actions
and retroactive financing does not commit ADB to finance the Project. The EA and the IAs need
to follow the summary note for advance actions and retroactive financing, which is attached in
Appendix 4.

38. Advance Actions are approved for the recruitment of DDIS at the PIU levels using
single source selection (SSS), civil works contracts for stage 2 subprojects and individual
project management consultants at the PCMU. Retroactive Financing is approved in principle
for the recruitment of DDIS at the PIU levels; civil work contracts of stage 2 subprojects and the
operation of PCMU, and PIUs. Retroactive financing will be up to 30% of the ADB loan amount
for eligible expenditures incurred prior to the effectiveness of the financing agreement but after
30 September 2011 and not earlier than 12 months before the date of the loan agreement.

B. Procurement of Goods, Works and Consulting Services

40. The procurement of goods and works, and recruitment of consulting services will be
carried out in a manner consisted with the simplified and expedient procedures permitted under
the ADB Disaster Emergency Assistance Policy, ADB Guidelines for Procurement (April 2010
and as amended from time to time) and ADB Guidelines on the Use of Consultants (April 2010,
and as amended from time to time). As a general principle, the project’s approach to
procurement of Works will be inspired by Procurement Guidelines para 3.18, which reads as
follows:

Procurement under Disaster and Emergency Assistance

“Procurement of goods and works under disaster and emergency assistance shall
incorporate greater flexibility. ICB requirements will be relaxed in favor of NCB with an

17
Ministry of Economy and Finance (MEF). 2012a. Standard Operating Procedures for Externally Financed
Project/Programs in Cambodia. Phnom Penh (May); MEF. 2012b. Financial Management Manual for Externally
Financed Project/Programs in Cambodia. Phnom Penh (May); MEF. 2012c. Procurement Manual for Externally
Financed Project/Programs in Cambodia, Phnom Penh (in two volumes), (May)
 21

abbreviated bidding period. LIB will be the norm for procurement of goods with
minimum bidding periods ranging from one to two weeks. Direct contracting to
contractors and suppliers under existing loans or grants will be allowed for new
contracts, with rates negotiated around those in effect for the existing contract with
adjustments as required for inflation and physical considerations. Similarly, contractors
and suppliers competitively selected under projects financed by other donors will be
considered for direct contracting for new ADB-financed contracts.”

41. Procurement capacity assessment of the EA and the IAs, has been undertaken. Based
on the assessment of the EA and IAs, the thresholds for procurement of works and goods as
well as consulting services have been agreed upon with the Government. Likewise, ADB’s prior
review and post review have been set forth in the procurement plan. Further, domestic
preference will be provided to the ICB contracts for goods and works in accordance with ADB
Guidelines for Procurement (April 2010 and as amended from time to time)

42. Procurement of Works and Goods: In order to expedite implementation and meet the
emergency needs, the procurement of works for stage 2 subprojects will be retroactively
financed using direct procurement method. Direct contracting of civil works will be subject to
ADB prior review. All works to be contracted under stage 3 of the project will use competitive
bidding. ICB procedures will be used for any civil works contracts estimated to cost more than
$3.5 million, and any goods contracts estimated to cost more than $500,000. NCB procedures
will be used for any civil works contract estimated to cost $3.5 million or less and any goods
contracts estimated to cost $500,000 or less respectively. Shopping will be used for any civil
works or goods contracts estimated to cost less than $100,000. The prior and post review by
ADB in accordance with the threshold has been set out in the procurement plan. NCB threshold
shall further be reviewed during implementation of the project and may be revised depending
upon the capacity of the IA, local constructing industry to enhance efficiency and economy in
the procurement process.

43. Recruitment of Consultants: Three DDIS consulting firms will be recruited by using
SSS and located in the PIUs. The detailed procedure for the recruitment of DDIS using SSS has
been outlined in the Appendix 4. On an exceptional basis, ADB will select all individual
consultants to be deployed at the MEF/PCMU including the disaster management institutional
specialist. ADB will undertake all stages of recruitment up to the evaluation stage and
MEF/PCMU will then undertake contract negotiation with the first ranked individuals selected by
ADB. MEF/PCMU will be bound to accept ADB’s selection, and will then proceed with the
contract negotiations, contracting and contract management of the experts recommended by
ADB.

C. Procurement Plan: The procurement plan for each output is in Appendix 5.

22

D. National Competitive Bidding

a. General

44. The procedure to be followed for NCB shall be those set forth for the “National
Competitive Bidding” method in the Government’s SOP Procurement Manual of September
2005 issued under sub-decree Number 14 ANK dated 26 February 2007 or revised SOP
Procurement Manual, acceptable to ADB with the clarifications and modifications described in
the following paragraphs required for compliance with the provisions of ADB’s Guidelines for
Procurement (April 2010 and as amended from time to time).

b. Application

45. Contract packages subject to NCB procedures will be those identified as such in the
project Procurement Plan. Any changes to the mode of procurement from those provided in the
Procurement Plan shall be made through updating of the Procurement Plan, and only with prior
approval of ADB.

c. Eligibility

46. Bidders shall not be declared ineligible or prohibited from bidding based on barring
procedures or sanction lists, except individuals and firms sanctioned by ADB, without prior
approval of ADB.

d. Advertising

47. Invitations to bid shall be advertised in at least one widely-circulated national daily
newspaper or freely accessible, nationally-known website. Bidding of NCB contracts estimated
at $500,000 equivalent or more for goods and related services or $3 million equivalent or more
for civil works shall be advertised on ADB’s website.

e. Anti- Corruption

48. Definitions of corrupt, fraudulent, collusive and coercive practices shall reflect the latest
ADB‘s Anti- Corruption Policy definitions of these terms and related additional provisions.

f. Rejection of all Bids and Rebidding

49. Bids shall not be rejected and new bids solicited without ADB’s prior concurrence.

g. Bidding Documents

50. The bidding documents provided with the Government’s Procurement Manual shall be
used for NCB. For ICB, ADB standard bidding documents shall be followed. The first draft
English language version of the procurement documents shall be submitted for ADB review
procedures (post and prior review). The ADB-approved procurement documents will then be
used as a model for all procurement financed by ADB for the project, and need not be subjected
to further review unless specified in the procurement plan.
 23

h. Member Country Restrictions

51. Bidders must be nationals of member countries of ADB, and offered goods, works and
services must be produced in and supplied from member countries of ADB.

E. Consultant's Terms of Reference: The detailed terms of reference is in Appendix 6

VII. SAFEGUARDS

52. Environmental Safeguards: The project is classified as category B for environment.

Subprojects will reconstruct existing transport and irrigation infrastructure. The subproject
selection criteria are formulated to avoid significant adverse environmental impacts. Subprojects
with impacts that are irreversible, diverse, or unprecedented; and/or located in critical habitats
and protected areas will not be included in the project. An EARF was prepared and disclosed in
accordance with ADB’s Safeguard Policy Statement, 2009 and government laws and sub-
decrees. The EARF includes environmental guidelines to further avoid and minimize adverse
impacts during the identification and finalization of subprojects. Implementation arrangements in
the PCMU and PIUs build on experience gained from previous and ongoing ADB-financed
projects, and adequate capacity is ensured to manage environmental impacts through
consultant support and additional capacity building. Initial Environmental Examinations (IEEs)
and Environmental Management Plans (EMPs) will be prepared during implementation
consistent with the EARF and will be incorporated into bidding and contract documents to be
implemented by contractors and monitored by the PIUs. Environmental reporting to ADB from
the PCMU will be done on a semi-annual basis. The EARF is in Appendix 7.

53. Social Safeguards: The project is classified as category B for involuntary resettlement
and category C for indigenous peoples. The subproject selection criteria are formulated to avoid
land acquisition, resettlement impacts, and social risks. Subprojects with involuntary
resettlement impacts will not be included in Stage 2 of the project. Subprojects with significant
involuntary resettlement impacts will not be included in Stage 3 of the project. Subprojects with
impacts on indigenous peoples will not be included in the project. A resettlement framework was
prepared and disclosed in accordance with the ADB’s Safeguard Policy Statement, 2009 and
government laws, regulations, and policies—to guide planning studies and detailed designs of
subprojects. Implementation arrangements in the PCMU and PIUs will build on experience
gained from previous and ongoing ADB-financed projects, and ensures that the PIUs have
adequate capacity to understand and prepare resettlement plans, through consultant support
and additional capacity building. Meaningful, widespread consultations will be undertaken with
stakeholders particularly in subproject areas during implementation. For each subproject,
consultation, participation, and disclosure will be undertaken based on RF Section IV. Table 2 of
the RF identifies consultation and information disclosure during preparation, updating, and
implementation of resettlement plans. The Table also identifies who is responsible for each
consultation and information disclosure activity. The EA will also ensure that the 4-stage
grievance redress mechanism is in place as described in Section VI of the RF. Semi-annual
monitoring reports on social safeguards from the EMO to be provided to ADB will include the
conduct of consultation, participation, disclosure and grievance redress procedures as
described in RF Section IX. The RF is in Appendix 8.
24

VIII. GENDER AND SOCIAL DIMENSIONS

54. Poverty reduction: The floods exacerbated an already difficult poverty situation in many
parts of Cambodia. The project is geographically targeted to the areas most in need and with a
high concentration of poverty. The household survey carried out jointly with other development
partners will assist in measuring the poverty impacts of the flood on rural communities. The
design incorporates features that will help reduce poverty both directly and indirectly. The direct
poverty reduction impact will come from the provision of short-term employment. Output 2: Rural
Road Rehabilitation and output 3: Irrigation and flood control will use labor-intensive work as
appropriate. Employment opportunities will be given to the poor and vulnerable population will
be based on self-selection using wage rate (the preferred method for targeting labor-intensive
public works). The repaired and in some cases upgraded road and irrigation infrastructure will
indirectly reduce poverty by helping to restore livelihoods and reduce vulnerability by improving
physical access to markets and social services as well as by increasing agricultural productivity.
The PIUs will monitor the poverty reduction impact by reporting on number of days of work
created for local men and women.

55. Gender mainstreaming: The project includes a Labor and Gender Action Plan (LGAP),
developed in accordance with the ADB Policy on Gender and Development and the laws of the
RGC, to ensure more equal access to project benefits, particularly in construction jobs. The
LGAP contains specific targets to raise awareness and improve gender equality. Monitoring the
LGAP will ensure the participation of women in project management and implementation.
Awareness raising on the Core Labor Standards and gender specific measures (such as equal
pay for equal work) will be provided to contractors under each PIU and in the TORs of the
supervision consultants. Contractors will implement a sex-disaggregated data collection system
in order to allow PIUs to monitor the achievement of the gender targets such as the total
number of days of unskilled labor that are created, and the number of these that accrue to
women unskilled laborers. The provisions in the LGAP apply primarily to Stage 3 works under
the project.

56. The PCMU, through the PIUs, will ensure LGAP implementation, monitoring, and
quarterly reporting with support from a national labor and gender consultant recruited for each
PIU and the CARM gender team. Gender-related targets are reflected in the DMF and include
for each output that at least 30% of unskilled labor hired for construction work will be women.
The estimated cost of implementing the LGAP is included in the project financing.
 25

Table 4: Labor and Gender Action Plan

Project Output Proposed Activities and Targets

Output 1: National and provincial road restoration (MPWT)

• Contractors will prioritize and report on the use of local unskilled labor
• At least 30% of unskilled labor hired will be women (through conditions in bid
documents)
• Contractors will uphold the Core Labor Standards, including not employing child
labor
• Men and women will receive equal pay for equal work
Output 2: Rural road restoration (MRD)
• Contractors will prioritize and report on the use of local unskilled labor
• At least 30% of unskilled labor hired will be women (through conditions in bid
documents)
• Contractors will uphold the Core Labor Standards, including not employing child
labor
• Men and women will receive equal pay for equal work
• Any community-based rural road maintenance demonstration activities, if
selected for inclusion in the project, will prioritize, build capacity for, and report on
women’s participation
Output 3: Irrigation and flood control (MoWRAM)
• Contractors will prioritize and report on the use of local unskilled labor
• At least 30% of unskilled labor hired will be women (through conditions in bid
documents)
• Contractors will uphold the Core Labor Standards, including not employing child
labor
• Men and women will receive equal pay for equal work
• Irrigation canals will only be selected for rehabilitation if they have functioning
Farmer Water User Committees with women’s representation
•
Output 4: Project coordination and monitoring
• Each PIU will have at least one woman on staff
• Each Ministry’s Gender Mainstreaming Action Group will be encouraged to
participate in project activities (particularly any gender training or orientation)
• All PIU staff will participate in training on gender mainstreaming in infrastructure
projects
• A national labor and gender specialist will be hired for each PIU to support LGAP
implementation, monitoring, and reporting
• PIUs will collect sex-disaggregated data in project performance and monitoring
indicators or project management information system
• The PMU will ensure that LGAP progress updates are included in quarterly and
annual reports
26

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND

COMMUNICATION

A. Project Design and Monitoring Framework: The design and monitoring framework
(DMF) is in Appendix 9.

B. Monitoring

57. Project Performance Monitoring: Within 6 months of loan effectiveness, the PCMU will
establish a project performance management system using the targets, indicators, assumptions,
and risks in the DMF. The PCMU with the support of consultants will also expand the DMF into
a Monitoring and Evaluation (M&E) Framework taking into account the important monitoring
parameters in addition to those included in DMF. The baseline data corresponding to indicators
and targets set out in the DMF and M&E Framework disaggregated by income levels, sex and
ethnicity will be gathered during detailed design stage by each PIU with the support of DDIS.
The PCMU will conduct annual monitoring using the same indicators and submit the reports to
ADB throughout project implementation on a quarterly basis. These quarterly reports will
provide information necessary to update ADB's project performance reporting system. 18
Results of a comprehensive completion survey will be included in the project completion report.

58. Compliance Monitoring: PCMU will monitor and ensure the compliance of loan
assurances —policy, legal, financial, safeguards, and others. All non-compliance issues, if any,
will be updated in quarterly progress reports together with remedial actions. Each ADB review
mission will also monitor the status of compliance with loan assurances and raises the non
compliance issues with the government and agrees on remedial actions.

59. Safeguards Monitoring: The PCMU will brief the PIU safeguards focal persons on
monitoring requirements. The M&E/safeguards specialist recruited at the PCMU will coordinate
with PIUs in monitoring safeguard compliance. The PCMU will prepare periodic monitoring
reports on progress of safeguards implementation, compliance issues, and corrective actions.
Reports will be posted in a location accessible to the public. Safeguards monitoring
requirements including suggested monitoring report formats are in safeguards plans and
frameworks. Consolidated safeguards monitoring reports will be provided by the PCMU to ADB
on a semi-annual basis.

60. Gender and Social Monitoring: The PCMU will ensure LGAP implementation,
monitoring, and quarterly reporting. Monitoring the LGAP will ensure the participation of women
in project management and implementation. A sex-disaggregated data collection system will be
developed by the PCMU and PIUs to monitor the achievement of the gender targets, such as
the number of days of unskilled labor that are created, and the number of these that accrue to
women unskilled laborers. The PCMU will monitor compliance with core labor standards and
reporting to ADB on an annual basis.

C. Evaluation

61. An inception mission will be fielded soon after the project is declared effective. Regular
bi-annual review missions will follow. The government and ADB will jointly review the project.
This includes (i) the performance of the PCMU, PIUs, consultants and contractors; (ii) physical
18
ADB's project performance reporting system is available at:
http://www.adb.org/Documents/Slideshows/PPMS/default.asp?p=evaltool
 27

progress of subprojects with subsector analysis and effectiveness of safeguards, and the LGAP;
and (iii)compliance with loan/assurances. Given that this project is to be implemented over a
short period of time (three years duration), it is essential to review the status of implementation
at an early stage. Accordingly, the MEF, MPWT, MRD and MOWRAM will undertake an in-
depth review of progress of the project jointly with ADB within 9 months of the Effective Date to
determine and agree on potential reallocation of Loan Proceeds on the basis of progress and
readiness of remaining Subprojects under Components 1 to 3.Within three months of physical
completion of the project, the PCMU will submit a project completion report to ADB 19.

D. Reporting

62. The PCMU will provide ADB with (i) quarterly progress reports in a format consistent
with ADB's project performance reporting system; (ii) consolidated annual reports including (a)
progress achieved by output as measured through the indicator's performance targets, (b) key
implementation issues and solutions; (c) updated procurement and implementation plan (d)
Safeguard compliance; and (iii) a project completion report within three months of physical
completion of the project. The project accounts and the executing agency APAs, together with
the associated auditor's report, should be prepared and adequately reviewed. PIUs will provide
PCMU with monthly progress reports and monthly expenditure reports within 15 days of the
following month using the standard format prepared by PCMU.

E. Stakeholder Communication Strategy and Grievance Redress

63. The communication plan developed by ADB for the project which is available as the
linked document will guide both ADB and the Government in stakeholder communication
activities. The project will follow ADB’s revised public communication policy which is effective
from April 2012. The project intends to maximize transparency by communicating relevant
project information to stakeholders in various means. The PCMU through the assistance of its
consultant and the ADB’s SSTA on Advance Action for Flood Damage Reconstruction Project
will set up a website within 3 months of loan effectiveness and disclose all key project-related
information, including the scope, cost, and financial and institutional arrangements of the
project, project safeguard reports such as IEE and RPs, and project progress such as
procurement, contract award and disbursement. The project will disclose the audited financial
project accounts as part of the revised ADB’s revised public communication policy. The website
will include information on project procurement including the list of participating bidders, name of
each winning bidder, basic details on bidding procedures adopted, the value of each contract
awarded, and the list and value of goods/services procured and the intended utilization of loan
proceeds under each contract being awarded. The website will also include contact details for
the PCMU and PIUs’ counterpart staff in Khmer and English languages, and will link to ADB's
Integrity Unit website at http://www.adb.org/Integrity/complaint.asp for reporting to ADB any
grievances or allegations of corrupt practices arising out of the project and/or project activities.
The PCMU consultants will also assist the Government to undertake disclosure

64. The government will cause the executing agency to ensure that all project staff are fully
aware of ADB procedures, including, but not limited to, procedures for implementation,
procurement, use of consultants, disbursements, reporting, monitoring, and prevention of fraud
and corruption. Each PIU will also fully disclose on their websites, relevant project-related
information such as subproject cost, cost-sharing arrangement, contractor's name, contract
price, progress of construction.
19
Project completion report format available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-
Sector-Landscape.rar
28

65. Participation is an important aspect of the project. Information, education, and

communication program for the project will be carried out by the Government and ADB. The
safeguard plans will ensure sufficient consultation and participation with beneficiaries, including
women, the poor and vulnerable groups.

X. ANTICORRUPTION POLICY

66. ADB reserves the right to investigate, directly or through its agents, any violations of the
Anticorruption Policy relating to the Project. 20 All contracts financed by ADB shall include
provisions specifying the right of ADB to audit and examine the records and accounts of the
executing agency and all Project contractors, suppliers, consultants and other service providers.
Individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-
financed activity and may not be awarded any contracts under the Project. 21

67. To support these efforts, relevant provisions are included in the financing agreement,
project agreement and the bidding documents for the Project. In particular, all contracts
financed by ADB in connection with the project will include provisions specifying the right of
ADB to audit and examine the records and accounts of the EA, IAs and all contractors,
suppliers, consultants, and other service providers as they relate to the project. ADB will
disseminate ADB’s anticorruption policy to EA and the IAs.

68. The Anti-Corruption Unit, operating under the Anti-Corruption Law of 2010, has power to
investigate any irregularities in the project. This includes financial irregularities, as well as
corruption by government officials.

69. Project-specific measures to enhance governance and prevent corruption, designed with
the stages of project implementation and the disbursement chain in mind, include (i) the
requirement for PCMUs and PIUs to follow government’s Standard Operating Procedure for all
expense and revenue items including cash and the proper and accurate maintenance of
financial records; (ii) establishing a project website at PCMU to provide transparency on project
details; and (iii) adhering to risk assessment and risk mitigation plan, which is in Appendix 10.

70. Furthermore, the project intends to maximize transparency, as described in Section IX

above. Full information disclosure and participatory monitoring at both the central and the local
levels are expected to be effective in reducing the risk of corruption and improving governance
at central and local levels.

71. Within 12 months of project effectiveness, the PCMU will prepare a grievance redress
mechanism acceptable to ADB.

20
Available at: http://www.adb.org/sites/default/files/anticorruption-integrity-policy-strategy.pdf
21
ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp
 29

XI. ACCOUNTABILITY MECHANISM

72. People who are, or may in the future be, adversely affected by the project may submit
complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an
independent forum and process whereby people adversely affected by ADB-assisted projects
can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s
operational policies and procedures. Before submitting a complaint to the Accountability
Mechanism, affected people should make a good faith effort to solve their problems by working
with the concerned ADB operations department. Only after doing that, and if they are still
dissatisfied, should they approach the Accountability Mechanism. 22

XII. RECORD OF PAM CHANGES

73. The first draft of the PAM (dated 7 March 2012) has been prepared and agreed upon at
the loan negotiation in March 2012. All revisions/updates during the course of implementation
should be retained in this Section to provide a chronological history of changes to implemented
arrangements recorded in the PAM.

74. The PAM has been duly consulted with EA and revised on 31 July 2012 during the
inception mission from 16 July 2012 to 31 July 2012. The main changes can be summarized as
follows:
• Project Readiness Activities (Section II, A) was updated based on actual progress;
• Subproject approval prior to commencing detailed design (Section III, E, 1) was
revised to confirm that clearance for Stage 2 subprojects will be endorsed by the
FDERP fact-finding mission based on field inspections of each of the subprojects;
• S-curve was updated to include combined projections for both ADB loan and grant
from Government of Australia;
• Appendix 1- subproject selection criteria was revised to include that EIRR must be
greater than 12% for Output 1-National and Provincial Roads (Section 2);
• Summary Note on Retroactive Financing & Advance Actions (Appendix 4) was
revised to add more steps for Direct Contracting in order to be consistent with the
actual implementation, and
• Appendix 5- The key changes in the procurement plan are summarized as follows:
- MoWRAM-CW15 for emergency repair of NWISP subprojects was shifted
from Stage 2 to Stage 3 under NCB procurement method;
- The package MPWT-CW6 for Emergency reconstruction of DBST 8.5-km
provincial road No. 270 was renamed as MPWT-CW6a;
- Two new packages namely MPWT- CW6b for reconstruction of three
bridges on 8.5-km provincial road No. 270 and MPWT-CW6c for
reconstruction of seven small structures on the 32.5-km provincial road
No.270 were added into the procurement plan, and
- Due to resettlement issues, MPWT-CW8 was split into three packages:
CW8a for reconstruction of 15-km provincial road No.159 in Banteay
Meanchey, CW8b for reconstruction of 5-km provincial road No.159 in
Banteay Meanchey and CW8c for reconstruction of 14.6-km provincial road
No.159 in Battambang Province.

22
For further information see: http://compliance.adb.org/.
30

75. The second revision of the PAM was duly consulted with EA during ADB review mission
from 21 January to 08 February 2013. The main changes can be summarized as follows:
• Appendix 2-Indicative List of Subprojects were updated to reflect changes to date.
• Appendix 3-Project Cost Tables were updated to reflect changes to date.
• Appendix 5-The key changes in the procurement plan are summarized as follows:
- NCB Prior Review: ADB prior review for subproject contracts above one
million, after the first approved subproject in each IA, was removed. Only
BERs will be prior reviewed in order to speed up the procurement
process.
- MoWRAM-CW4 and MoWRAM-CW5 were repackaged based on ADB No
Objection letter dated 16 November 2012.
- Repackaging MPWT-CW8.
- The procurement of MPWT-CW8, MRD-CW7 can be processed, but
contract awards will be dependent on availability of funds based on
savings from stage 2 civil works, stage 3 awarded contracts and ADB's
clarification on additional allocation.
- The procurement of MPWT-CW7, MoWRAM-CW3, MoWRAM-CW6 and
MoWRAM-CW15 are still pending, subject to fund availability.