Project Administration Memorandum

The project administration memorandum is an active document, progressively updated and revised as necessary, particularly following any changes in project or program costs, scope, or implementation arrangements. This document, however, may not reflect the latest project or program changes.

Project Number: 41414 Loan Number: 2460 August 2013

Viet Nam: Greater Mekong Subregion Ha Noi–Lang

Son, Greater Mekong Subregion Ha Long–Mong Cai,

and Ben Luc–Long Thanh Expressways Technical

Assistance Project

CURRENCY EQUIVALENTS (as of 13 August 2013)

Currency Unit – dong (D)

D1.00 = $0.000047 $1.00 = D21,095

ABBREVIATIONS

ADB – Asian Development Bank ASEAN – Association of Southeast Asian Nations CBTA – cross-border transport agreement CQS – consultants’ qualifications selection CSP – country strategy and program EIA – environmental impact assessment EMA – external monitoring agency EMDP – ethnic minority development plan EMP – environmental management plan EMSA – ethnic minority specific action GDP – gross domestic product GMS – Greater Mekong Subregion GZAR – Guangxi Zhuang Autonomous Region HCMC – Ho Chi Minh City JICA – Japan International Cooperation Agency MOT – Ministry of Transport NGO – nongovernment organization NH – national highway O&M – operation and maintenance PIU3 – project implementation unit no. 3 PPP – public–private partnership PRC – People’s Republic of China QCBS – quality- and cost-based selection SOE – state-owned enterprise TA – technical assistance TSSS – Transport Sector Strategy Study VEC – Vietnam Expressway Corporation

WEIGHTS AND MEASURES

ha – hectare

km – kilometer

km2 – square kilometer m – meter

NOTE

In this report, "$" refers to US dollars.

CONTENTS

LOAN PROCESSING HISTORY

REVISED DESIGN AND MONITORING FRAMEWORK OF THE PROJECT

I. PROJECT DESCRIPTION 1

A. Project Areas and Locations 1 B. Impact and Outcome 2 C. Outputs 2 D. Special Features 2

II. COST ESTIMATES AND FINANCING PLAN 3

A. Detailed Cost Estimates 3 B. Financing Plan 4 C. Allocation of Loan Proceeds 4

III. IMPLEMENTATION ARRANGEMENTS 5

A. Executing and Implementing Agencies 5 B. Project Management Organization 5

IV. IMPLEMENTATION SCHEDULE 5

V. COST ESTIMATES AND FINANCING PLAN DURING IMPLEMENTATION 5

VI. CONSULTANT RECRUITMENT 5

VII. DISBURSEMENT PROCEDURES 7

VIII. PROJECT MONITORING AND EVALUATION 7

IX. REPORTING REQUIREMENTS 9

X. AUDITING REQUIREMENTS 9

XI. MAJOR LOAN COVENANTS 9

XII. KEY PERSONS INVOLVED IN THE PROJECT 11

A. ADB 11 B. Borrower 11 C. Executing Agency 12

XIII. ANTICORRUPTION 13

APPENDIXES

1. Detailed Cost Estimates, Financing Plan, and Allocation 14

2. Project Organization Chart 15

3. Implementation Schedule 16

4. Procurement Plan 17

5. Contract Awards and Disbursement Projections by Quarter 24

6. Procedure for Recruiting Consulting Firm under Loan Projects 25 Using Quality-and-Cost Based Selection

7. Outline Terms of Reference for Project Design Consulting Services 26

8. Outline Terms of Reference for Detailed Design Appraisal Consulting Services 30

9. Procedure for Recruiting Consulting Firm under Loan Projects 32 Using Consultants’ Qualification Selection

10. Reporting Requirements 33

11. Sample Progress Report 34

12. ADB’s Anticorruption Policy 36

LOAN PROCESSING HISTORY

Dates

a. Fact-finding 17-29 Apr 2008

b. Management review meeting (MRM) 9 Jun 2008

c. Appraisal mission 12-17 Jun 2008

d. Staff review committee (SRC) 22 Jul 2008

e. Loan negotiations 4-5 Sep 2008

f. Board circulation 2 Oct 2008

g. Board consideration and approval 23 Oct 2008

h. Loan agreement signing 12 Dec 2008

i. Loan effectiveness 26 Jun 2009

REVISED DESIGN AND MONITORING FRAMEWORK OF THE PROJECT

Design Summary

Performance Targets and/or Indicators

Data Sources and/or Reporting Mechanisms

Assumptions and Risks

Impact Efficient movement of goods and people between northeastern Viet Nam and the GZAR in the PRC, and within the greater HCMC area, through construction of two expressways

Completion of the Ben Luc–Long Thanh Expressway by 2017, and the GMS Ha Noi–Lang Son Expressway by 2020

Travel time and costs reduced by at least 50% for Ha Noi–Nanning, and by 80% for east–west traffic in the southern HCMC area

Border-crossing time reduced at Huu Nghi–Youyiguan for cargo by 90% and goods by 50%

By 2020, cross-border trade and tourism between Viet Nam and the GZAR in the PRC increased by at least 50%

Traffic accidents reduced by 20% on the Ha Noi–Lang Son route

ADB surveys on traffic volume, travel time, origin–destination of trips in the HCMC area

ADB surveys on travel times and costs of transport between Ha Noi and Nanning

Trade and tourism statistical yearbooks of Viet Nam and the GZAR, and border trade and tourism data at the Huu Nghi–Youyiguan border crossings

Traffic accident reports of the national government and project provinces

Assumptions Transport projects related to the two expressways are completed on time

Stakeholders, including project-affected households, do not oppose the expressway projects

VEC has adequate capacity to manage construction of the expressway projects

Key provisions of the GMS CBTA related to facilitation of frontier crossing formalities and the exchange of traffic rights arrangements are implemented between the PRC and Viet Nam

Outcome Designs for the GMS Ben Luc–Long Thanh and Ha Noi–Lang Son expressway projects agreed by the Government of Viet Nam, VEC, ADB, and cofinanciers

Agreement on project designs for the Ben Luc–Long Thanh Expressway by 2010, and the Ha Noi–Lang Son Expressway by 2015

Project review missions and country programming missions

Meetings with the Government of Viet Nam, VEC, and cofinanciers

Assumptions Government priorities and agreements on project designs remain the same

Funding sources for the two expressway projects are identified

Outputs 1. Detailed designs of the two expressways prepared 2. Safeguard plans for the two expressways updated, and assistance provided for implementing land acquisition and resettlement

Cost-effective expressway alignments and designs completed Safeguard plans updated based on the detailed designs

Land acquisition and resettlement of project-affected households completed for the two expressway projects

Receipt of the report by the government, VEC, and ADB Review missions

Assumption The expressway alignment is approved by the Ministry of Transport, provincial transport departments concerned, and HCMC at early stage of consulting services Risk Recruitment of the project feasibility and design consultants and the detailed design consultants is

Design Summary

Performance Targets and/or Indicators

Data Sources and/or Reporting Mechanisms

Assumptions and Risks

3. Procurement documents for goods and civil works prepared, assistance for procurement provided 4. Capacity development for VEC

Prequalification and bidding documents prepared for goods and civil works, and prequalification and bidding implemented VEC provided with institutional development to implement the expressway projects VEC’s corporate financing management strengthened

Existing traffic management system integrated

delayed

Activities with Milestones 1. Prepare project design study for the two expressways, including engineering, social, environmental, economic, and financial aspects

1.1 Project design study for the Ben Luc–Long Thanh Expressway (Dec 2010– Dec 2013)

1.2 Project design study for the Ha Noi–Lang Son Expressway (Q2 2014–Q4 2015)

2. Update safeguard plans for the expressways, and assist VEC in implementing land acquisition and resettlement of project-affected households under the expressway projects

2.1 Safeguard plan update for the Ben Luc–Long Thanh Expressway (Dec 2010–Dec 2013), and assistance for land acquisition and resettlement (until Dec 2013) 2.2 Safeguard plan update for the Ha Noi–Lang Son Expressway (Q4 2014–Q4 2015), and assistance for land acquisition and resettlement (until Q2 2016)

3. Prepare prequalification and bidding documents for the civil works and provide assistance for the procurement of civil works

3.1 Procurement documents for the Ben Luc–Long Thanh Expressway (Dec 2010–Dec 2013) 3.2 Procurement documents for the Ha Noi–Lang Son Expressway (Q4 2014– Q4 2015)

4. Capacity development for VEC 4.1 Strengthening of accounting, planning, procurement, safeguards, and

technical departments of VEC (Dec 2010–Dec 2016) 4.2 Financial assessment and financing plan development for the Expressway

Projects (Q3 2010–Q4 2015) 4.3 Detailed design for integrated traffic management system for the

Expressways (Dec 2010–Q4 2015)

Inputs ADB: $22.1 million ADF hard-term loan, and VEC: $4.8 million Contingency and financing charges ADB: $1.7 million ADF hard-term loan

ADB = Asian Development Bank, ADF = Asian Development Fund, CBTA = cross-border transport agreement, GMS = Greater Mekong Subregion, GZAR = Guangxi Zhuang Autonomous Region, HCMC = Ho Chi Minh City, PRC = People's Republic of China, Q = quarter, VEC = Vietnam Expressway Corporation..

I. PROJECT DESCRIPTION

A. Project Areas and Locations 1. The GMS Ha Noi–Lang Son Expressway is proposed to be constructed parallel to National Highway No.1 (NH1), which was upgraded under the ADB-assisted Second Road Improvement Project,1 as well as to the single-track railway in northern Viet Nam leading to Guangxi Zhuang Autonomous Region (GZAR) of People’s Republic of China (PRC). The distance between Ha Noi and the border town of Huu Nghi in Lang Son province is about 130 km. The GMS Ha Noi–Lang Son Expressway forms part of the GMS eastern corridor, which was identified under the GMS Transport Sector Strategy Study (TSSS)2 as one of nine transport corridors, and runs from Nanning in GZAR to Ha Noi. Along the proposed expressway route in Bac Ninh and Bac Giang provinces, traffic is considerable, while in Lang Son province it is relatively low. It currently takes 3 hours to drive from Ha Noi to Huu Nghi. Cross-border trade between GZAR and Viet Nam has been expanding at about 4% per year. However, the volume of cargo transported by trucks peaked in 2003 and has since been declining. This is due to cumbersome border crossing formalities and the absence of exchange of traffic rights arrangements between the PRC and Viet Nam, which results in time-consuming and costly transshipment at the border checkpoints. The proposed expressway, which will link with the ADB-assisted expressway from Nanning (the capital of GZAR) to the border town of Youyiguan,3 combined with streamlining of cross-border operations, is expected to boost cross-border trade between Viet Nam and GZAR. It is important to reasonably forecast the traffic demand growth, reflecting the economic growth in the area and potential modal shift from motorcycles to passenger cars in Viet Nam, as well as the expansion of trade between Viet Nam and GZAR. There is only one daily passenger train, as passenger traffic appears to have shifted to the improved NH1. On average, eight freight trains run per week, transporting mainly heavy materials and products such as ore and steel. It is less likely, therefore, that there will be a modal shift arising from the construction of the GMS Ha Noi–Lang Son Expressway. 2. The Ben Luc–Long Thanh Expressway will be a southern link of the HCMC’s outer ring expressway as well as a short link of the north–south expressway in Viet Nam, and will be connected to the planned HCMC–Vung Tau Expressway. The expressway forms part of the GMS southern economic corridor route from Bangkok to Phnom Penh, HCMC, and Vung Tau, as well as the GMS eastern economic corridor from Nanning to Ha Noi and HCMC. In the southern area of HCMC, east–west traffic is restricted due to lack of river crossing facilities, forcing vehicles into the center of HCMC. Modal shift from motorcycles to passenger cars has already been substantial in the project area. Construction of HCMC ring roads to establish connectivity with neighboring cities by expressway links is considered a high priority by the Government. In this regard, the proposed expressway will have significant impacts on socioeconomic activities in the cities and towns around HCMC, and also will improve traffic problems in the center of HCMC by diverting the through traffic to the expressway. The expressway will be used as freight route to and from the HCMC river port. The Nha Be and

1 ADB. 1996. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

Socialist Republic of Viet Nam for the Second Road Improvement Project. Manila (Loan 1487-VIE). 2 ADB. 2004. Technical Assistance for Greater Mekong Subregion Transport Sector Strategy Study, Manila (TA

6195-REG). Objective of the GMS Transport Sector Strategy Study is to establish a well-built, seamless, multimodal subregional transport network that will contribute significantly to fully connecting the GMS. It was endorsed by the GMS governments in May 2007.

3 ADB. 2001. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

People’s Republic of China for the Guangxi Road Development Project. Manila (Loan 1851-PRC). The project was completed on 31 January 2008.

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Long Tau rivers in the project area are used as navigation channels for large cargo ships accessing the HCMC river port. Two bridges or tunnels need to be constructed across the rivers. If bridges are selected, these will have to be long-spanned bridges with a 50–60 meter (m) navigational clearance. The Mekong Delta area contains major agricultural fields which are capable of rice triple-cropping. Industrial parks, such as in food processing, are being developed in the project area. The proposed expressway will be used as a freight route to transport food produced in the Mekong Delta to the rest of the country by land and maritime transport. B. Impact and Outcome 3. The ensuing expressway projects will construct (i) the GMS Ha Noi–Lang Son Expressway (about 120 km), which will be connected to the existing Nanning–Youyiguan Expressway in GZAR; and (ii) the Ben Luc–Long Thanh Expressway (about 60 km), which will form part of the outer ring road of the HCMC urban expressway, and be an access link with the planned HCMC–Vung Tau Expressway. The outcome of the TA Loan Project is the design of the ensuing expressway projects agreed to by the Government of Viet Nam, VEC, ADB, and cofinanciers. 4. The expected impact of the TA Loan Project is the achievement of efficient movement of goods and people between northeastern Viet Nam and GZAR, and within the greater HCMC area, through construction of the two expressways. International and local traffic will be able to use an efficient, safe, and reliable express route from Ha Noi to the border with the PRC through the completion of the GMS Ha Noi–Lang Son expressway. Connectivity of cities and towns around HCMC will be improved and the cost and travel times for the movement of passengers and goods in and around HCMC will be reduced through completion of the Ben Luc–Long Thanh Expressway. Ultimately, the TA Loan Project will contribute to sustainable economic growth and enhanced economic exchange between Viet Nam and the PRC, and promote socioeconomic development in the project-influenced areas. C. Outputs 5. The associated TA projects undertake technical feasibility studies for the two expressways. Outputs from the TA Loan Project include completion of preconstruction activities, including (i) detailed designs and related studies of the expressways and their associated facilities, (ii) updated resettlement plans, ethnic minority development plans (EMDPs) or ethnic minority specific actions (EMSAs), environmental impact assessments (EIAs) and environmental management plans (EMPs), (iii) bidding documents for goods and civil works and assistance during the procurement of these contracts, and consultant selection documents and selection of consultants required for the construction of the expressways, and (iv) assistance with implementation of land acquisition and resettlement for the two expressway projects. Cost for land acquisition and resettlement does not be funded from the TA Loan Project. ADB Board approved the MFF for the Ben Luc–Long Thanh Expressway Project in December 2010. ADB Board approval of the ensuing MFF for the GMS Ha Noi–Lang Son Expressway Project is tentatively scheduled for 2015. D. Special Features 6. Proposed TA for preparing the GMS Ha Noi–Lang Son and Ha Long–Mong Cai expressway projects, and proposed TA for preparing the Ben Luc–Long Thanh Expressway Project were attached to the TA Loan Project. These associated TA projects carried out technical feasibility studies for the three expressways. Based on the draft final report on the

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technical feasibility study for each expressway project, the Government of Viet Nam, VEC, and ADB determined that the technical feasibility of the GMS Ha Noi–Lang Son and Ben Luc–Long Thanh expressway projects is satisfactory as a condition to the commencement of detailed engineering studies under the TA Loan Project, but the technical feasibility of the GMS Ha Long–Mong Cai expressway project is not satisfactory. The ensuing investment loans for construction of the GMS Ha Noi–Lang Son and Ben Luc–Long Thanh expressways are processed by using outputs of the associated TA projects and the TA Loan Project. 7. The project costs for construction of the three expressways are estimated at between $1.5 billion and $1.6 billion each. Given the large financing requirements, cofinancing for each of the projects was explored. JICA cofinances the GMS Ben Luc–Long Thanh Expressway Project, and the China Eximbank has expressed interest in cofinancing the GMS Ha Noi–Lang Son Expressway Project. 8. A memorandum of understanding between Viet Nam and the PRC was signed in March 2008 by vice-ministers of transport of the two countries to include the Ha Noi–Lang Son corridor and the Huu Nghi–Youyiguan border crossings in the scope of the GMS CBTA. The CBTA is a multilateral instrument for the facilitation of cross-border transport of goods and people. Formulated under the auspices of a series of ADB technical assistance projects, the CBTA provides a practical approach to streamlining regulations and reducing nonphysical barriers in the GMS. It covers key aspects of cross-border transport facilitation in one document, including (i) single-stop single-window customs inspection; (ii) cross-border movement of persons (i.e., visas for persons engaged in transport operations); (iii) transit traffic regimes, including exemptions from physical customs inspection, bond deposit, escort, and agriculture and veterinary inspection; (iv) requirements that road vehicles will have to meet to be eligible for cross-border traffic status; (v) exchange of commercial traffic rights; and (vi) infrastructure, including road and bridge design standards, road signs, and signals. When the CBTA between the PRC and Viet Nam enters into force, i.e., when both governments ratify the CBTA’s implementing guidelines, key transport facilitation provisions mentioned above will have to be implemented, and the current exchange of traffic rights arrangements that is limited to the border areas will have to be expanded to cover the entire Nanning–Ha Noi corridor.

II. COST ESTIMATES AND FINANCING PLAN A. Detailed Cost Estimates 9. The TA Loan Project is estimated to cost $30.2 million equivalent, including local taxes (Table 1). ADB finances the net cost for the consulting services. All financing charges are to be capitalized. VEC finances all local taxes imposed on the consulting services. The local taxes are estimated at 20% of the base cost at maximum, $4.8 million equivalent. Detailed cost estimates by expenditure category and detailed cost estimates by financier are in Appendix 1.

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10. The Government has requested a loan equivalent to $26.0 million from the Special Funds resources of ADB to help finance the TA Loan Project. The loan is denominated in special drawing rights with a term of 32 years, including a grace period of 8 years, an interest charge of 3.15% per annum during the life of the loan, and such other terms and conditions as set forth in the draft loan and project agreements. B. Financing Plan 11. The ADB loan finances 84% of the total project cost (Table 2). The remaining cost ($4.8 million) is financed by VEC. The Borrower of ADB’s loan is the Socialist Republic of Viet Nam. The entire loan proceeds is relent. VEC borrows the loans from the Ministry of Finance through subsidiary loan agreements, on terms acceptable to ADB and at ADB’s interest rate applicable to the loans, plus a relending fee pursuant to the borrower’s regulations.

Note: Due to depreciation of $ against SDR, the loan amount in $ equivalent was reduced by $0.6 million. Source: Asian Development Bank estimates.

C. Allocation of Loan Proceeds 12. ADB finances the net cost for the consulting services. VEC finances the local taxes for the consulting services. The local taxes on the consulting services are estimated at 20% of the base cost at maximum.

Table 1: Updated Project Investment Plan

($ million)

Item Amounta

A. Base Cost

Consulting Services

a. Project design study 26.6

b. Detailed design appraisal study 1.2

c. External resettlement monitoring 0.7

Subtotal (A) 28.5

B. Contingencies 0.1

C. Financing Charges During Implementationb 1.6

Total (A+B+C) 30.2 a Includes taxes and duties of $4.8 million.

b Includes interest. Interest during construction has been computed at 3.15%.

Note: Due to depreciation of $ against SDR, the loan amount in $ equivalent was reduced by $0.6 million. Source: Asian Development Bank estimates.

Table 2: Updated Financing Plan

($ million)

Source Total %

Asian Development Bank 25.4 84 Vietnam Expressway Corporation 4.8 16

Total 30.2 100

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III. IMPLEMENTATION ARRANGEMENTS A. Executing Agency 13. The project organization charts are shown in Appendix 2. The executing agency is VEC under the supervision of MOT. VEC has overall responsibility for project implementation and formal correspondence with the line ministries, Ha Noi City, HCMC, provincial governments, and ADB. B. Project Management Organization 14. VEC set up a new project implementation unit no. 3 (PIU3) for the TA Loan Project, which comprises a qualified project director and suitable staff. The PIU3 has responsibility for day-to-day project implementation. To enhance knowledge sharing and improve job efficiency, PIU3 coordinates with other VEC staff in the Business Planning Department, Technical Department (including environmental unit and social and resettlement unit), Finance and Accounting Department, as well as the existing project implementing units of other projects. After the MFF for the GMS Ben Luc–Long Thanh Expressway Project was approved, VEC established a new Ben Luc–Long Thanh Expressway Project Management Unit (BLLT-EPMU). Tasks for the GMS Ha Long–Mong Cai Expressway Project were removed. VEC engages and direct the work of consultants for (i) the project design including (a) detailed design study and its related studies, (b) update of the resettlement plans, EMDPs (or EMSAs), EIAs, and EMPs, (c) assistance in procurement of goods and civil works, and (d) implementation of the land acquisition and resettlement; (ii) appraisal of the detailed designs; and (iii) external monitoring of the land acquisition and resettlement activities.

IV. IMPLEMENTATION SCHEDULE 15. The TA Loan Project is implemented over 7 years for commencement in January 2009 and completion in December 2016. The overall implementation schedule for the TA Loan Project is presented in Appendix 3.

V. COST ESTIMATES AND FINANCING PLAN DURING IMPLEMENTATION 16. The procurement plan and a list of proposed contract packages for the TA Loan Project are in Appendix 4. Effective monitoring of project implementation requires accurate projections of contract awards, commitments, and disbursements. Comparison of such projections with the actual helps identify impediments to implementation progress and remedial measures. Accurate disbursement projection also helps ADB improve its overall liquidity, cash flow, and portfolio management. ADB requests VEC by the second week of September to prepare their projections of contract awards, commitments, and disbursements for the following year. VEC submits the projections to ADB by the second week of each year. The updated contract awards and disbursement projections are shown in Appendix 5.

VI. CONSULTANT RECRUITMENT

17. For each expressway project, four types of consulting services are carried out before and during processing of the ensuing investment loan. First, project feasibility consulting services to be funded by the associated TA grants prepare engineering, economic, financial, social, and environmental feasibility studies. Second, project design consulting services to be funded by the TA loan (i) prepare detailed designs; (ii) update resettlement plans, EMDPs (or

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EMSAs), EIAs, and EMPs based on the detailed designs; and (iii) assist in the procurement of civil works and the implementation of the land acquisition and resettlement. Third, in accordance with the Government’s internal procedures, detailed design appraisal consulting services to be funded by the TA loan review the detailed designs and project cost estimates prepared by the project design consulting services. Fourth, external resettlement monitoring consulting services to be funded by the TA loan monitor land acquisition and resettlement activities. 18. ADB recruited an international consulting firm for each of the associated TAs for the GMS Ha Noi–Lang Son and Ha Long–Mong Cai expressway projects and for the Ben Luc–Long Thanh Expressway Project following the quality- and cost-based selection (QCBS) procedure and in line with ADB’s Guidelines on the Use of Consultants (2007, as amended from time to time). The consultants engaged under the associated TA grants did not prepare terms of reference for the consulting services on the detailed design study, and therefore are not excluded from the consultant selection for the ensuing project design study if they express interest. To ensure transparency of consultant selection, the final report of the project feasibility study was disclosed to all short-listed consultants for the ensuing project design study. 19. VEC undertakes three consulting services for each of the GMS Ha Noi–Lang Son and Ben Luc–Long Thanh Expressways under the TA Loan Project: (i) the project design study, (ii) the detailed design appraisal study; and (iii) the external resettlement monitoring. All consulting firms are selected in line with ADB’s Guidelines on the Use of Consultants.

(i) VEC recruits international consulting firms for the project design study following the QCBS procedure (Appendix 6). The quality–cost ratio is 80:20. The outline of the consulting services for the project design study is in Appendix 7. The project design study (a) undertakes detailed engineering designs for the expressways and their associated facilities; (b) updates resettlement plans, EMDPs (or EMSAs), EIAs, and EMPs, taking into account detailed engineering designs; (c) prepares bidding documents for procurement of goods and civil works and assist VEC in undertaking procurement of the goods and civil works; and (d) assists in the implementation of the resettlement plans prior to commencement of civil works. The consulting services contract period lasts 36 months from December 2010 to December 2013 for the Ben Luc–Long Thanh Expressway, and lasts for 18 months from September 2013 to June 2015 for the GMS Ha Noi–Lang Son Expressway.

(ii) VEC selects international consulting firms for the detailed design appraisal study.

The QCBS procedure is used for the consulting services, and the quality–cost ratio is 80:20. The outline of the consulting services for the detailed design appraisal study is in Appendix 8. Prior to procurement of the civil works, the detailed design appraisal study reviews detailed designs of the expressways and their associated facilities and cost estimates for the projects in line with the Government’s regulations. A period of 4 months is required to appraise the detailed designs for each expressway. The consulting services contract period starts in February 2013 for the GMS Ben Luc–Long Thanh Expressway, and starts in April 2015 for the GMS Ha Noi–Lang Son Expressway.

(iii) VEC also recruits national consulting firms to undertake the external resettlement

monitoring. The Consultants’ Qualifications Selection procedure (Appendix 9) is used for the consulting services. The terms of reference for the external resettlement monitoring consulting services were developed in the resettlement plans.

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VII. DISBURSEMENT PROCEDURES 20. Loan disbursement is in accordance with ADB’s Loan Disbursement Handbook (2007, as amended from time to time) and detailed arrangements agreed between the Government and ADB. The loan proceeds are disbursed directly to the consultants based on an approved contract under the direct payment procedure. ADB finances the net cost for the consulting services. VEC prepares a withdrawal application form (Appendix 5 of ADB’s Loan Disbursement Handbook), which should not include the local taxes, and send it to Controller, ADB. The percentage of ADB’s share is 100% for the withdrawal application form. Taxes imposed on the consulting services contract are paid by VEC to the tax office.

VIII. PROJECT MONITORING AND EVALUATION

21. Project Portfolio Performance Rating. The purpose of portfolio performance rating is to establish the implementation status of each project. This will enable executing agency project managers and project team leaders to identify implementation problems and design effective remedial measures to get the project back on-track. Projects are rated using the following five performance indicators. These indicators have equal weight.

a) Technical Are problems, if any (e.g. quality standards, key project conditions, implementation arrangements, cost overruns that require additional financing, etc.) identified in external supervision consultants and/or review mission reports being addressed? (Yes/No) Where more than one problem is being addressed, each problem is rated as either being addressed (Yes) or not (No). To calculate the overall technical indicator rating, a Yes rating is given a value of 1 and a No rating a value of 0. The sum of these ratings is divided by the total number of problems and the threshold levels in Table 3 are applied to define the indicator status. b) Procurement The difference between the cumulative actual and the updated projected contract award values starting at loan effectiveness over the life of the project. The updated contract award projection is derived from Appendix 5. The actual contract award values are derived quarterly from the financial system. c) Disbursement The difference between the cumulative actual and the updated projected disbursements starting at loan effectiveness over the life of the project. The updated disbursement projection is derived from Appendix 5. The actual contract award values are derived quarterly from the financial system. Disbursement data will be automatically sourced from the loan and grant financial information systems to trigger the application of formula related to disbursement. d) Financial management Compliance with audit/accounts covenants: Has an acceptable annual audit report been received on time? (Yes/No). The default is Yes until the due date as defined in the loan agreement. If the audited project accounts and agency financial statements have not been uploaded, and the indicator status has not been updated on or before the due date, then compliance will be rated No. An audit report is unacceptable if either partial or incomplete audited project accounts or agency financial statements are submitted, or only unaudited project accounts and financial statements are submitted. An audit report qualification need not imply unacceptability. The acceptability of an audit report with audit qualifications will be assessed by an ADB financial management specialist based on the nature of the qualification.

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e) Safeguards Compliance with safeguard covenants: (i) Environment (Yes/No) (ii) Resettlement (Yes/No) (iii) Indigenous people (Yes/No). Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory (Green)—all covenants in the category are being complied with (Yes), with a maximum of one exception (No) allowed, (ii) Partly Satisfactory (Amber)—a maximum of two covenants in the category are not being complied with (No), (iii) Unsatisfactory (Red)—three or more covenants in the category are not being complied with (No).

22. Rating will use a three-level traffic light applied to each indicator, and to the aggregation of the individual indicators into a single project rating. The five indicator ratings are aggregated into a single project rating by generating an average rating score for the project. The following values will be assigned to each rating Green = 1 point, Amber = 0.5 point and Red = 0 points. The assigned values for each of the five indicators are summed and divided by 5 to produce an overall project rating score between 0 and 1. Applying the percentage thresholds only, a project with a total rating score greater than or equal to 0.9 is on-track (Green); a project with a total rating score of 0.7–0.89 is a potential problem (Amber); and a project with a total rating score of less than 0.69 is an actual problem (Red), and is ‘at-risk’ (see Table 3).

Table 3: Rating of Contract Award and Disbursement Criteria

Status Rating Threshold

On track Green The S-curve for either ‘actual’ disbursement or contract award is within >90% of original projection; Technical – overall rating =>0.9; Financial management are rated Yes; Safeguard compliance is rated satisfactory (i.e. all Yes or with a maximum of one No)

Potential Problem

Amber The S-curve for either ‘actual’ disbursement or contract award is 75%–90% of original projection; Technical – overall rating 0.7–0.89; Safeguard compliance is rated partially satisfactory (i.e. has a maximum of two No’s)

Actual Problem Red The S-curve for either ‘actual’ disbursement or contract award is less than 75% of original projection; Technical – overall rating =<0.69; Financial management ratings are No; Safeguard compliance is rated unsatisfactory (i.e. has three No's)

23. Project Performance Monitoring. VEC, assisted by the project feasibility and design consultants, establishes baseline data for the performance indicators and targets for evaluating project performance in relation to impacts, outcomes, and outputs of the expressway projects. The performance indicators and targets will be again measured 6 months and 3 years after completion of the construction of each expressway, and compared to the baseline data to identify the project benefits. 24. Project Review. Regular reviews are carried out semiannually so that ADB fact-finding and appraisal missions for processing of the ensuing investment loans can utilize outputs of the

9

consulting services, and approval of the ensuing investment loans in the programmed year may be ensured. A project completion review mission will be fielded about 1 year after completion of the TA Loan Project. There will also be special reviews as required to address issues that arise during project implementation.

IX. REPORTING REQUIREMENTS 25. PIU3, on behalf of VEC, makes satisfactory arrangements for reporting the progress of project implementation. The reporting requirements are summarized in Appendix 10. It monitors project implementation in accordance with the implementation schedule, and keeps ADB informed through quarterly progress reports of any significant deviations from the schedule. The quarterly reports summarize information in detailed project reports, including basic data related to the Project, utilization of funds, achievement of immediate development objectives, implementation progress, environmental management and monitoring, land acquisition and resettlement progress, compliance with loan covenants, and major issues and problems. Sample progress report is provided in Appendix 11. 26. Within 3 months of completion of the Project, VEC through PIU3 will submit through VEC a project completion report to ADB, which will provide a detailed evaluation of the project design, costs, performance of the consultants, the performance indicators, social impacts, and such other details as may be requested by ADB.

X. AUDITING REQUIREMENTS 27. VEC maintains separate financial records and accounts adequate to identify financing resources received and project expenditure, including consulting services and the local taxes imposed on the consulting services financed out of the loan proceeds and local funds. The loan accounts and related financial statements are audited annually in accordance with sound auditing standards by an auditor acceptable to ADB. VEC submits annual audited reports and related financial statements to ADB within 6 months of the end of each fiscal year. The audit opinion includes (i) a detailed description of the source of funds and expenditures made, (ii) an assessment of the adequacy of accounting and internal controls systems with respect to project expenditure and other financial transactions in order to ensure safe custody of project-financed assets, and (iii) confirmation of compliance with loan covenants.

XI. MAJOR LOAN COVENANTS 28. In addition to the standard assurances, the Government and VEC have given the following assurances, which are incorporated in the legal documents:

(i) The Borrower will cause VEC to ensure that the detailed design study services and other services to be provided under the TA Loan Project for any of the expressways do not commence until the feasibility study conducted under the associated TA projects for the relevant expressway has been completed to the satisfaction of the Government, VEC, and ADB.

(ii) The Borrower will ensure that VEC updates the EIAs, including the EMPs, taking into account the detailed engineering design for the expressways in accordance with the requirements of ADB’s Environment Policy (2002). The Borrower will ensure that the procurement documents for the civil works include specific measures as indicated in the EIA and in accordance with ADB's Environment Policy to mitigate negative

10

environmental impacts caused by the construction of the expressways and related facilities and activities and to give due consideration to prevention of damage to the natural environment in the design, construction, operation, and maintenance of the expressways and related facilities and activities. The Borrower will also ensure that (a) specific provisions are included in the civil works and consulting services contracts for the implementation of the EMPs and their monitoring, and (b) budget allowances are made for the implementation of these provisions.

(iii) The Borrower will ensure that VEC updates the resettlement plans and the EMDPs

or EMSAs, as may be applicable, for the construction of the expressways and related facilities and activities in accordance with the requirements of ADB’s Involuntary Resettlement Policy (1995) and ADB’s Policy on Indigenous Peoples (1998) and taking into account the final detailed engineering designs. The Borrower will further ensure that VEC submits the updated resettlement plans and EMDPs or EMSAs to ADB for approval, and that the updated resettlement plans and EMDPs or EMSAs are disclosed to the affected persons prior to submission to ADB.

(iv) The Borrower will ensure that (a) affected persons are compensated at replacement

cost and assisted before they are displaced from their houses, land, and assets; and (b) that no affected persons are displaced until suitable alternative land within the same or a neighboring commune has been allocated to them or compensation has been paid that is sufficient to purchase suitable alternative land within the same or a neighboring commune.

(v) If, at any time after a resettlement plan has been approved or updated, significant

realignment of any part of the expressway is required, the Borrower will revise and update that resettlement plan to take into account the realignment. The updated resettlement plan will be updated in accordance with ADB’s Involuntary Resettlement Policy and submitted to ADB for approval prior to commencement of any land acquisition activities for the realigned part of the relevant expressway. Significant realignment occurs when the previously approved alignment is moved entirely outside the construction corridor of the previous design by a distance greater than 100 meters, or the impact of the realignment increases the number of affected persons by more than 10%.

(vi) The Borrower will ensure that VEC contracts an external monitoring agency (EMA)

for independent monitoring and evaluation of resettlement activities and that the EMA’s monitoring reports be uploaded onto VEC’s website. The Borrower will ensure that VEC submits copies of the EMA’s monitoring reports to ADB every quarter until resettlement and income restoration programs are complete.

(vii) During the TA loan project implementation, VEC will have in place sound financial

management, financial reporting, internal controls, and internal auditing systems acceptable to ADB.

(viii) The Borrower will take all actions which will be necessary to enable VEC to perform

its obligations under the Project Agreement, and will not take or permit any action which would interfere with the performance of such obligations.

(ix) The Borrower will exercise its rights under the subsidiary agreements in such a

manner as to protect the interests of the Borrower and ADB and accomplish the

11

purpose of the loan. No rights or obligations under the subsidiary loan agreement will be assigned, amended, abrogated, or waived without the prior concurrence of ADB.

XII. KEY PERSONS INVOLVED IN THE PROJECT

A. ADB

29. The Department/Division responsible for the implementation of the Project is Transport and Communications Division (SETC), Southeast Department (SERD). SETC has the overall responsibility of the implementation of the Project in ADB.

Director : Mr. James P. Lynch Tel. No. (63-2) 632-6198 Email: jlynch@adb.org

Principal Transport Specialist : Mr. Yasushi Tanaka

Tel. No. (63-2) 632-5657 Email: ytanaka@adb.org

Transport Specialist : Mr. Mitsuhiro Yao

Tel. No. (63-2) 632-6466 Email: myao@adb.org

Project Analyst : Ms. Elizabeth Alimurung

Tel. No. (63-2) 632-6729 Email: ealimurung@adb.org

Address : Asian Development Bank

6 ADB Avenue, Mandaluyong City 0401 Metro Manila, Philippines

Facsimile : (63-2) 636-2444 (ADB’s main fax) (63-2) 636-2015 (direct to SETC)

B. Borrower 30. The Ministry of Transport has overall responsibility of the implementation of the Project in the Government of Viet Nam.

Deputy Director General, Planning and Investment Department

: Ms. Nguyen Thanh Hang Tel. No. (84-4) 3942-6009

Expert, Planning and Investment Department

: Mr. Nguyen Quoc Pham Tel. No. (84-4) 3942 0198 Email: phamthanhbinh71@gmail.com

Address : Ministry of Transport

80 Tran Hung Dao Street, Hanoi, Viet Nam Facsimile : (84-4) 3942-3291

12

C. Executing Agency (EA) 31. VEC has the responsibility for the day-to-day project implementation under MOT’s supervision. VEC sets up PIU3, and appointed the full-time Project Director and his staff. PIU3 has a headquarter office and three branch offices.

Headquarter Office General Director : Dr. Mai Tuan Anh

Tel. No. (84-4) 643-0268 Project Director for BLLT Expressway : Mr. Pham Hong Quang Project Director for HNLS Expressway : Mr. Tran Ngoc Hoang Project Coordinator : Mr. Dang Hoai Nam

Mr. Nguyen Trung Kien Address : Vietnam Expressway Corporation

MITEC Building, Cau Giay new urban area, Yen Hoa Ward, Cau Giay District, Ha Noi, Viet Nam

Email: : duongcaotoc@vnn.vn Facsimile: : (84-4) 643-0270 Project Implementation Unit 3 Project Director : Mr. Phung Minh Mo Highway Engineer : Mr. Nguyen Tu Procurement Specialist : Mr. Phan Xuan Bang Financing/Accounting Specialist : Mr. Pham Van Dung Economist : Mr. Nguyen Hai Long Environmental Specialist : Mr. Nguyen Trung Kien Social and Resettlement Specialist : Mr. Vo Thuc Dinh Address : Vietnam Expressway Corporation

MITEC Building, Cau Giay new urban area, Yen Hoa Ward, Cau Giay District, Ha Noi, Viet Nam

Email : duongcaotoc@vnn.vn Facsimile : (84-4) 643-0270

13

Ben Luc-Long Thanh Expressway Project Management Unit Project Director : Mr. Thai Dinh Dung Deputy Project Director : Mr. Le Dac Tuan Technical and Environmental Section Leader

: Mr. Tran Trong An

Financial and Administration Section Leader

: Ms. Ta Ngoc Linh

Planning and Resettlement Section Leader

: Mr. Vo Xuan Quy

Address : Floor 4, No. 400 Nguyen Thi Thap,

Tan Quy Ward, District 7, HCMC Email : epmu.bllt@gmail.com Facsimile : (84-8) 3775-5238

XIII. ANTICORRUPTION 32. ADB’s Anticorruption Policy (1998, as amended to date) was explained to and discussed with the Government of Viet Nam and VEC. Consistent with its commitment to good governance, accountability, and transparency, ADB reserves the right to investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive, or coercive practices relating to the Project. To support these efforts, relevant provisions of ADB’s Anticorruption Policy (Appendix 12) are included in the loan regulations and the bidding documents for the Project. In particular, all contracts financed by ADB in connection with the Project include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and the project- related records and accounts of all consultants and other service providers. 33. To ensure transparency and good governance, VEC publicly discloses on its website information on how loan proceeds are being used. For each procurement contract, VEC discloses (i) the list of participating consultants, (ii) the name of the winning consultant, (iii) basic details on consultant selection procedures adopted, (iv) the amount of the contract awarded, (v) the list of goods and/or services purchased, and (vi) the intended and actual utilization of loan proceeds under each contract. VEC also discloses details of resettlement reports on its website, which are updated within 2 weeks of each contract being awarded. Also, VEC submits quarterly internal and external resettlement monitoring reports to ADB. The resettlement reports are uploaded onto VEC’s website within 2 weeks of their submission. Moreover, the Government ensures that all of VEC’s project staff are fully aware of, and comply with, the Government’s and ADB’s procedures, including, but not limited to, procedures for implementation, procurement, use of consultants, disbursement, reporting, monitoring, and prevention of fraud and corruption.

14 Appendix 1

UPDATED DETAILED COST ESTIMATES, FINANCING PLAN, AND ALLOCATION ($ million)

Item

Total Amount

ADB Loan VEC

Amount % Amount %

A. Investment Costs

1. Consultants 28.5 23.7 100.0 0.0 0.0

a. Project Design Study 22.1 22.1 100.0 0.0 0.0

b. Detailed Design Appraisal Study 1.0 1.0 100.0 0.0 0.0

c. External Resettlement Monitoring 0.6 0.6 100.0 0.0 0.0

2. Taxes and Duties 4.8 0.0 0.0 4.8 100.0

Subtotal (A) 28.5 23.7 83.2 4.8 16.8

B. Contingencies 0.1 0.1 100.0 0.0 0.0

C. Financing Charges During Implementationa 1.6 1.6 100.0 0.0 0.0

Total Disbursement (A+B+C) 30.2 25.4 84.1 4.8 15.9

ADB = Asian Development Bank, VEC = Vietnam Expressway Corporation. a

Interest for the ADB loan is 3.15%.

Note: Due to depreciation of $ against SDR, the loan amount in $ equivalent was reduced by $0.6 million. Source: Asian Development Bank estimates.

Appendix 2 15

PROJECT ORGANIZATION CHART

Project Design Consultants

Detailed Design Appraisal

Consultants

External Resettlement

Monitors

Vietnam Expressway Corporation

Project Implementation Unit 3

TA Consultants

Ministry of Transport

Asian Development Bank

Other

Ministries

People’s Committee of

Ha Noi and Ho Chi Minh City

Provincial People’s

Committees

16 Appendix 3

IMPLEMENTATION SCHEDULE

7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

A. Implementation of TA Loan Project

(i) Ben Luc-Long Thanh Expressway

1. DDS for Ben Luc-Long Thanh Expressway

2. Procurement Assistance of Civil Works

3. Land Acquisition and Resettlement Assistance

4. Appraisal of DDS

5. External Resettlement Monitoring

(ii) GMS Ha Noi-Lang Son Expressway

1. VEC's Consultant Selection for Project Design Study

2. DDS for GMS Hanoi-Lang Son Expressway

3. Procurement Assistance of Civil Works

4. Land Acquisition and Resettlement Assistance

5. VEC's Consultant Selection for DDS Appraisal Study

6. Appraisal of DDS

7. VEC's Consultat Selection for External Resettlement Monitoring

8. External Resettlement Monitoring

B. GMS Ben Luc-Long Thanh Expressway Project

1. Loan Processing (Tranche 2)

2. Selection of Project Supervision Consultant

3. Procurement of Civil Works

4. Land Acquisition and Resettlement

5. Income Restoration Program

6. Construction of the Expressway

C. GMS Ha Noi-Lang Son Expressway Project

1. Loan Processing (MFF, Tranche 1, Tranche 2)

2. Selection of Project Supervision Consultant

3. Procurement of Civil Works

4. Land Acquisition and Resettlement

5. Income Restoration Program

6. Construction of the Expressway

ADB = Asian Development Bank, DDS = detailed design study, GMS = Greater Mekong Subregion, FS = feasibility study, VEC = Vietnam Expressway Corporation

2018Item

2013 2014 2015 2016 2017

Appendix 4 17

PROCUREMENT PLAN

Basic Data Project Name: GMS Ha Noi–Lang Son, GMS Ha Long–Mong Cai, and Ben Luc–Long Thanh Expressways Technical Assistance Project Country: Socialist Republic of Vietnam Executing Agency: Vietnam Expressway Corporation Loan Amount: $26,000,000 Loan (Grant) Number: 2460-VIE Date of First Procurement Plan: 2008 Date of this Procurement Plan: June 2013

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

1. Project Procurement Thresholds

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

Procurement of Goods and Works Method Threshold

Consulting Services

Quality- and Cost-Based Selection above $200,000

Consultants’ Qualification Selection below $200,000

2. ADB Prior or Post Review

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

Procurement Method Prior or Post Comments

Recruitment of Consulting Firms

Quality- and Cost-Based Selection (QCBS) Prior

Quality-Based Selection (QBS) Prior

Other selection methods: Consultants Qualifications (CQS), Least-Cost Selection (LCS), Fixed Budget (FBS), and Single Source (SSS)

Prior

Recruitment of Individual Consultants

Individual Consultants Prior

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

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

General Description Contract Value

Recruitment Method

1

Advertisement Date (quarter/year)

International or National Assignment Comments

A1 (Detailed design for HNLS)

$10.888 million QCBS 3rd

Quarter of 2010 International Financed by ADB. The quality - cost

ratio is 80:20

A3 (Detailed design for BLLT)

$11.809 million QCBS 1st Quarter of 2009 International Awarded

B1 (DD appraisal for HNLS)

$0.306 million QCBS 1st Quarter of 2014 International Financed by ADB.

The quality - cost ratio is 80:20

Appendix 4

18

B3 (DD appraisal for BLLT)

$0.815 million QCBS 1st Quarter of 2011 International Awarded

C1 (Resettlement monitoring for HNLS)

$0.232 million CQS 1st Quarter of 2014 International Financed by ADB

C3 (Resettlement monitoring for BLLT)

$0.120 million CQS 3rd

Quarter of 2011 International Awarded

BLLT = Ben Luc-Long Thanh Expressway, HNLS = Ha Noi-Lang Son Expressway Note: Contract values include taxes and duties.

4. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000

4. The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

General Description

Value of Contracts

(cumulative) Number of Contracts

Procurement / Recruitment

Method Comments

None

B. Indicative List of Packages Required Under the Project

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

General Description

Estimated Value (cumulative)

Estimated Number of Contracts

Procurement Method

Domestic Preference Applicable Comments

Goods and Works

None

General Description

Estimated Value (cumulative)

Estimated Number of Contracts

Recruitment Method

Type of Proposal Comments

Consulting Services

None

C. National Competitive Bidding

1. General

6. The laws to be followed for national competitive bidding are set forth in (i) the Law on Procurement No. 61/2005/QH11 of 29 November 2005, (ii) the Construction Law no. 16/2003/QH11 of 26 November 2003, (iii) the Amendment Law No. 38/2009/QH12 of 19 June 2009 amending and supplementing key articles of the above-mentioned two laws, and (iv) the processes described in Decree No. 85/2009/ND-CP of 15 October 2009 on “Guiding Implementation of Procurement Law and Selection of Construction Contractors under the Construction Law”. Whenever any procedure in the national procurement laws is inconsistent with the ADB Procurement Guidelines (April 2010, and as amended from time to time), the ADB Guidelines shall prevail, amongst others on the following.

Appendix 4 19

2. Registration

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

(ii) Where registration is required prior to award of contract, bidders: (i) shall be allowed

a reasonable time to complete the registration process; and (ii) shall not be denied registration for reasons unrelated to their capability and resources to successfully perform the contract, which shall be verified through post-qualification.

(iii) Foreign bidders shall not be required to register as a condition for submitting bids. (iv) Bidder’s qualification shall be verified through pre- or post-qualification process.

3. Eligibility

(i) National sanction lists may only be applied with approval of ADB4. (ii) A firm declared ineligible by ADB cannot participate in bidding for an ADB financed

contract during the period of time determined by ADB. (iii) A firm which has been engaged by the borrower to provide consulting services for

the preparation or implementation of a project, and any of its affiliates, shall be disqualified from subsequently providing goods, works, or services, resulting from or directly related to the firm's consulting services for such preparation or implementation.

4. Prequalification and Post qualification

(i) Post qualification shall be used unless prequalification is explicitly provided for in the loan agreement/procurement plan. Irrespective of whether post qualification or prequalification is used, eligible bidders (both national and foreign) shall be allowed to participate.

(ii) In the event where pre-qualification is used, interested firms shall be given no less

than 42 days to prepare their pre-qualification submission. (iii) When pre-qualification is required, the evaluation methodology shall be based on

pass/ fail criteria relating to the firm’s experience, technical and financial capacities.

(iv) Qualification criteria shall be clearly specified in the bidding documents, and all criteria so specified, and only criteria so specified, shall be used to determine whether a bidder is qualified. The evaluation of the bidder’s qualifications should be conducted separately from the technical and commercial evaluation of the bid.

4Section 52 of the Integrity Principles and Guidelines allows ADB to sanction parties who fail to meet ADB's high ethical standards

based on the decisions of third parties, such a decision can only be made by the Integrity Oversight Committee on the basis of ADB's own independent examination of the evidence. As such, the process should follow the normal assessment and investigative processes prescribed by the Integrity Principles and Guidelines.http://www.adb.org/Documents/Guidelines/Integrity-Guidelines-Procedures/integrity-guidelines-procedures-2006.pdf

Appendix 4

20

(v) In carrying out the post-qualification assessment, the Employer/ Purchaser shall exercise reasonable judgment in requesting, in writing, from a bidder missing factual or historical supporting information related to the bidder’s qualifications and shall provide reasonable time period (a minimum of 7 days) to the bidder to provide response.

5. Preferences

(i) No preference of any kind shall be given to domestic bidders or for domestically manufactured goods.

(ii) Regulations issued by a sectoral ministry, provincial regulations and local regulations

which restrict national competitive bidding procedures to a class of contractors or a class of suppliers shall not be applicable.

(iii) Foreign bidders shall be eligible to participate in bidding under the same conditions

as local bidders, and local bidders shall be given no preference (either in bidding process or in bid evaluation) over foreign bidders, nor shall bidders located in the same province or city as the procuring entity be given any such preference over bidders located outside that city or province

6. Advertising

(i) Invitations to bid (or prequalify, where prequalification is used) shall be advertised in Government Public Procurement Bulletin. In addition, the procuring agency should publish the advertisement in at least one widely circulated national daily newspaper or freely accessible, nationally-known website allowing a minimum of twenty-eight (28) days for the preparation and submission of bids and allowing potential bidders to purchase bidding documents up to at least twenty-four (24) hours prior the deadline for the submission of bids. Bidding of NCB contracts estimated at $500,000 or more for goods and related services or $1,000,000 or more for civil works shall be advertised on ADB’s website via the posting of the Procurement Plan.

(ii) Bidding documents shall be made available by mail, or in person, to all who are

willing to pay the required fee, if any. (iii) The fee for the bidding documents should be reasonable and consist only of the cost

of printing (or photocopying) the documents and their delivery to the bidder. (Currently set at 1 Mln VND, increase subject to approval of ADB)

7. Standard bidding documents

(i) The Borrower’s standard bidding documents, acceptable to ADB, shall be used. The bidding documents shall provide clear instructions on how bids should be submitted, how prices should be offered, and the place and time for submission and opening of bids.

(ii) Bidders shall be allowed to submit bids by hand or by mail/ courier.

Appendix 4 21

8. Bid Opening

(i) All bids received after the deadline for submission indicated in the bidding documents will be rejected.

(ii) All bids received before the bid submission deadline shall be opened except those

with proper notice of withdrawal. (iii) A copy of the bid opening record shall be promptly provided to all bidders who

submitted bids.

9. Bid Evaluation

(i) Merit points shall not be used in bid evaluation. (ii) Bidders shall not be eliminated from detailed evaluation on the basis of minor, non-

substantial deviations.5 (iii) Except with the prior approval of ADB, no negotiations shall take place with any

bidder prior to the award, even when all bids exceed the cost estimates. (iv) A bidder shall not be required, as a condition for award of contract, to undertake

obligations not specified in the bidding documents or otherwise to modify the bid as originally submitted.

(v) Bids shall not be rejected on account of arithmetic corrections of any amount.

However, if the Bidder that submitted the lowest evaluated bid does not accept the arithmetical corrections made by the evaluating committee during the evaluation stage, its bid shall be disqualified and its bid security shall be forfeited.

10. Rejection of All Bids and Rebidding

(i) No bid shall be rejected on the basis of a comparison with the owner's estimate or budget ceiling without the ADB’s prior concurrence.

(ii) Bids shall not be rejected and new bids solicited without the ADB’s prior

concurrence. 11. Participation by Government-owned enterprises

7. Government-owned enterprises shall be eligible to participate as bidders only if they can establish that they are legally and financially autonomous, operate under Enterprise law and are not a dependent agency the contracting entity. Furthermore, they will be subject to the same bid and performance security requirements as other bidders.

5Minor, non-substantial deviation is one that, if accepted, would not affect in any substantial way the scope, quality, or performance

specified in the contract; or limit in any substantial way, the Contracting entity rights or the Bidder’s obligations under the proposed contract or if rectified, would not unfairly affect the competitive position of other bidders presenting substantially responsive bids.

Appendix 4

22

12. Non-eligibility of military or security units

8. Military or security units, or enterprises which belong to the Ministry of Defense or the Ministry of Public Security shall not be permitted to bid.

13. Participation by Foreign contractors and suppliers. Joint Ventures and Associations

(i) Foreign suppliers and contractors from eligible countries shall, if they are interested, be allowed to participate without being required to associate or form joint ventures with local suppliers or contractors, or to subcontract part of their contract to a local bidder.

(ii) A bidder declared the lowest evaluated responsive bidder shall not be required to

form a joint venture or to sub-contract part of the supply of goods as a condition of award of the contract.

(iii) License for foreign contractors operation in Vietnam would be provided in a timely

manner and will not be arbitrarily withheld. 14. Publication of the Award of Contract. Debriefing.

(i) For contracts subject to prior review, within 2 weeks of receiving ADB’s “No-objection” to the recommendation of contract award, the borrower shall publish in the Government Public Procurement Bulletin, or well-known and freely-accessible website the results of the bid evaluation, identifying the bid and lot numbers, and providing information on: i) name of each bidder who submitted a bid; ii) bid prices as read out at bid opening; iii) name and evaluated prices of each bid that was evaluated; iv) name of bidders whose bids were rejected and the reasons for their rejection; and v) name of the winning bidder, and the price it offered, as well as the duration and summary scope of the contract awarded.

(ii) For contracts subject to post review, the procuring entity shall publish the bid

evaluation results no later than the date of contract award. (iii) In the publication of the bid evaluation results, the borrower shall specify that any

bidder who wishes to ascertain the grounds on which its bid was not selected, should request an explanation from the procuring entity. The procuring entity shall promptly provide an explanation of why such bid was not selected, either in writing and / or in a debriefing meeting, at the option of the borrower. The requesting bidder shall bear all the costs of attending such as debriefing. In this discussion, only the bidder’s bid can be discussed and not the bids of competitors.

15. Handling of Complaints

9. The national competitive bidding documents shall contain provisions acceptable to ADB describing the handling of complaints in accordance with Chapter X of Decree No. 85/2009/ND-CP, read with Articles 72 and 73 of the Law on Procurement No. 61/2005/QH11.

Appendix 4 23

16. ADB Member Country Restrictions

10. 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.

17. Fraud and Corruption

11. ADB will sanction a party or its successor, including declaring ineligible, either indefinitely or for a stated period of time, to participate in ADB-financed activities if it at any time determines that the firm has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for, or in executing, an ADB-financed contract.

18. Right to Inspect/ Audit

12. Each bidding document and contract financed from by ADB shall include a provision requiring bidders, suppliers, contractors to permit ADB or its representative to inspect their accounts and records relating to the bid submission and contract performance of the contract and to have them audited by auditors appointed by ADB.

24 Appendix 5

CONTRACT AWARDS AND DISBURSEMENT PROJECTIONS BY QUARTER ($ million)

Contract Award

2013 2014 2015 2016

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Project design for BLLT

Project design for HNLS

9.434

Detailed design appraisal

for BLLT

Detailed design appraisal

for HNLS

0.255

External resettlement

monitoring for BLLT

External resettlement

monitoring for HNLS

0.193

Additional feasibility study

for HNLS 30 km

0.250

Total 0.250 0.000 0.000 9.434 0.000 0.000 0.193 0.000 0.255 0.000 0.000 0.000 0.000 0.000

Disbursement

2013 2014 2015 2016

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Project design for BLLT

0.659 0.659

Project design for HNLS

1.887 0.943 2.830 2.830 0.943

Detailed design appraisal

for BLLT

0.366 0.183

Detailed design appraisal

for HNLS

0.064 0.128 0.064

External resettlement

monitoring for BLLT

0.034 0.006 0.006 0.006 0.006 0.006 0.006 0.006 0.006 0.006 0.008 0.008

External resettlement

monitoring for HNLS

0.048 0.019 0.019 0.019 0.019 0.019 0.025 0.025

Additional feasibility study

for HNLS 30 km

0.250

Total 1.309 1.048 0.006 2.064 0.949 0.177 2.884 0.196 0.089 3.154 1.034 0.198 0.025 0.196

Appendix 6 25

PROCEDURE FOR RECRUITING CONSULTING FIRM FOR LOAN PROJECTS USING QUALITY-AND-COST BASED SELECTION

CONSULTANT ADB

User division lists

project in ADBBO

SUBMISSION 1

Receives RFP and User division sends

prepares technical comments/approval to EA

& financial proposals

Receives proposals, stores

unopened financial

proposals

SUBMISSION 2

User division sends

comments/approval

Receives copy

(attendance is optional)

CSC prepares short list,

Reviews ADBBO or

advertisement and sends EOI

Receives EOIs

Prepares long list of consultants

User division provides

list of firms from DACON

CSC meeting ranks technical proposals,

prepares evaluartion report, and submits

to ADB

RFP, and evaluation criteria,

short-listed

consultants

and submits to ADB

Sends RFP to

Negotiates contract, submits

to ADB minutes of negotiations

Finalizes contract and sends

contract negotiations

Receives

CO

NT

RA

CT

ING

starts work

Sends representative to

SE

LE

CT

ION

a representative

EA's advice

opening or nominates

receive advice and unopened

Receives

Sends approval

to EA

User division

SUBMISSION 4 reviews and

and draft contract

to contract negotiations

submits to ADB

Invites first-ranked consultant

and place for opening

Advises unsuccessful consultants,

Advises consultants whose

RECRUITING CONSULTING FIRMS FOR LOAN PROJECTS USING QCBS

Advertises project in

newspapers, etc.

Discusses TOR TOR developed Appraisal mission discusses TOR

EXECUTING AGENCY

PR

EP

AR

AT

ION

Prepares procurement planFact-finding mission assesses EA and

helps prepare a procurement plan

consultants of time,date,

Publicly opens

Arranges to attend

financial proposals

financial proposals

signed contract

Unsuccessful consultants

financial proposals returns unopened financial

Selected consultant

proposals, issues notice to

proceed to selected consultant

signed contract

Receives

SUBMISSION 3

Evaluates

financial proposals

CSC ranks proposals, prepares

ranking report, and

approves

copies to consultant and ADB

minimum technical requirement

Advises technically qualified

Submits technical

and

financial proposals

CSC members

evaluate technical proposals

proposals did not meet

User division reviews & approves and

submits to COSO on a no-objection basis

User division reviews & approves and

submits to COSO on a no-objection basis;

CSC may be convened in problematic

cases where strong technical judgment is

questionable

User division reviews & approves if

</+$600,00 and submits to COSO on a no-

objection basis; asks COSO to convene

CSC if >$600,000

to EA

of notification

to EA

Sends approval

26 Appendix 7

TERMS OF REFERENCE FOR PROJECT DESIGN CONSULTING SERVICES A. Scope of the Services 1. The project design consulting services have been divided into three components:

(i) Expressway detailed design component. Complete expressway detailed design documentation required for the construction of the Greater Mekong Subregion (GMS) Ha Noi–Lang Son Expressway, the GMS Ha Long–Mong Cai Expressway, and the Ben Luc–Long Thanh Expressway.

(ii) Safeguard plans component. Update environmental impact assessment (EIA), environmental management plan (EMP), resettlement plan, ethnic minority development plan (EMDP) or ethnic minority specific action (EMSA) as may be applicable, and other social development plans for each expressway, which will be prepared under the associated TA projects; assist the Vietnam Expressway Corporation (VEC) in implementing the updated resettlement plans.

(iii) Procurement assistance component. Prepare procurement documents for the civil works of the expressways and assist VEC in undertaking the procurement.

2. The consulting services are provided by an international consulting firm, joint venture, or consortium of consulting firms, which are recruited in accordance with the (Asian Development Bank's) ADB's Guidelines on the Use of Consultants (2007, as amended from time to time). The tasks to be completed under each component are set out below. The project design consultants review the project feasibility study report, which is prepared by the project feasibility consultants to be engaged by ADB under the associated TA projects. B. Outline Terms of Reference 3. Based on the preliminary design prepared under the associated TA projects, the consultants will prepare detailed engineering designs and documentation required to commence construction of the three expressways. The tasks to be undertaken are as follows:

(i) Undertake detailed topographic, geotechnical, and traffic surveys sufficient to design detailed alignments and cross sections for the proposed expressways.

(ii) Prepare detailed engineering designs and bills of quantities, and calculate detailed costs for civil works, broken down into base cost, contingencies, and taxes and customs duties. The detailed costs will be estimated in the form of the low, middle, and high scenarios of the inflation forecast.

(iii) Conduct a road safety audit on the engineering designs to ensure that safety hazards have been eliminated.

(iv) Prepare concept and detailed engineering designs for traffic control and toll collection systems. These designs will be based on standards for expressway traffic control systems and data interchange that will be developed under the services for use on all expressways. The intent is that these systems will take into account the latest international standards. A key feature of the system will be the use of open architecture and a data exchange facility to facilitate expansion of the system and communications with other systems.

(v) Undertake surveys to determine the extent of unexploded ordnance contamination and include appropriate measures to survey and clear the site prior to commencement of construction.

Appendix 7 27

(vi) Prepare documents for VEC’s use in securing a concession for the operation and maintenance (O&M) of the completed expressway, based on the work under the Expressway Network Development Plan TA,1 which assessed various public–private partnership models. When construction of the expressway is completed, it is proposed that O&M of the expressway facilities will be bid for as a concession.

4. Based on the safeguard plans prepared under the associated TA projects, the consultant will update the EIA, EMP, resettlement plan, EMDP or EMSA as may be applicable, and other safeguard plans for the three expressways, and assist VEC in implementing the resettlement plan. The tasks to be undertaken are as follows:

(i) Prepare an update to the EIA and EMP based on the EIA prepared under the associated TA projects that take account of the results of the detailed design. This will be undertaken in accordance with (a) ADB’s Environment Policy (2002) guided by Operations Manual section on environmental considerations2 and other policies and guidelines of ADB, i.e., Public Communications Policy (2005), and Environmental Assessment Guidelines (2003); (b) the Environmental Protection Law, 2006, and its pursuant implementing ordinance, including Decree 80, 2006 and Circular 08, 2006; and (c) Ministry of Transport sector standards, including Standard 22 TCN 242 98: Guidelines for Environmental Impact Assessment in the Feasibility Study and Design of Transport Construction.

(ii) Undertake detailed measurement surveys based on the detailed designs, relocation site surveys, and replacement cost surveys; develop income restoration programs for severely affected households; and develop design and procurement of civil works required for development of the relocation sites.

(iii) Prepare an updated resettlement plan, an updated EMDP (or EMSA), and other required social development plans, based on results of task (ii) above, as well as the full resettlement plan, EMDP (or EMSA), prepared under the associated TA projects and the detailed designs, and assist VEC in the implementation of these plans. The consultants will undertake these tasks in accordance with ADB’s Involuntary Resettlement Policy (1995) and Policy on Indigenous Peoples (1998) guided by Operations Manual section on involuntary resettlement and indigenous peoples,3 and other relevant policies and guidelines of ADB, i.e., Policy on Gender and Development (1998), Accountability Mechanism Policy (2003), 4 and Public Communications Policy.

(iv) Assist VEC and district resettlement committees in implementing and monitoring the resettlement plans, and engage an external resettlement monitoring agency.

(v) Ensure that the bid documents include specific provision to minimize disruption and damage to the environment and local settlements caused by construction, using the EIA, EMP, and the detailed design prepared during this work as a basis for these provisions. Bid documents will also include specific provisions for the engagement and payment of a subcontractor to undertake HIV/AIDS awareness programs for contractors’ staff.

(vi) Assist VEC in implementing land acquisition, resettlement, and income restoration programs in accordance with the resettlement plans approved by ADB.

1

ADB. 2005. Technical Assistance to the Socialist of Republic of Viet Nam for the Expressway Network Development Plan Project. Manila (TA 4695-VIE).

2 ADB. 2006. Operations Manual. Section F1: Environmental Considerations. Manila (25 September).

3 ADB. 2006. Operations Manual. Section F2: Involuntary Resettlement. Manila (25 September); ADB. 2006.

Operations Manual. Section F3: Indigenous Peoples. Manila (25 September). 4 ADB. 2003. Operations Manual. Section L1: ADB Accountability Mechanism. Manila (29 October).

28 Appendix 7

5. The consultants will prepare procurement documents for the civil works of the expressways and assist VEC in undertaking the procurement. The tasks to be undertaken are as follows:

(i) Prepare all required bidding documents in accordance with the requirements of ADB’s Procurement Guidelines (2007, as amended from time to time) for sections of the expressways to be funded with assistance from ADB. Prepare all required bidding documents in accordance with procurement guidelines and procedures of the project cofinanciers.

(ii) Prepare bidding documents for civil works to construct the expressways. These documents will include, as necessary, prequalification documents, prequalification evaluation documents, and bidding documents for the civil works, including the road traffic information and toll collection systems. Bidding documents will include bill of quantity items for environmental mitigation measures, and HIV/AIDS awareness and prevention programs for contractors’ workers. The bidding documents will also include provisions regarding any aspects of the gender strategy that should be included, and, if appropriate, employment opportunities for ethnic minority groups in the construction phase.

(iii) Prepare procurement plans, setting out details of proposed contract packages, procurement methods, and a proposed schedule for procurement. Each plan is to cover a period of no less than 18 months and is to be updated on a regular basis.

(iv) Assist VEC in (a) evaluating prequalification of potential bidders in line with the prequalification evaluation document approved by ADB, and prepare a prequalification evaluation report; (b) evaluating bids and preparing a bid evaluation report; and (c) answering inquiries from bidders during the prequalification and bidding exercise. Responsibility for the content of evaluation reports and responses to inquiries will remain with VEC.

(v) Assist VEC in involving the private sector in all aspects of expressway O&M for the three expressways and develop appropriate means and structures to secure private sector involvement in such activities.

C. Required Expertise 6. The consulting services for each expressway are undertaken by an international consultant in association with national consultants. The total expected expertise inputs for the two expressways are 1,452 person-months (422 person-months of international and 1,030 person-months of national consulting services). The consultants should have expertise shown in Table A8. The required expertise and person-months will be updated as appropriate based on outputs of the project feasibility study. D. Reporting Requirements 7. The consultants prepare the following reports and documents for each expressway project, and submit them to VEC and ADB: (i) an inception report to provide comments on the final report on the project feasibility study, and additional engineering, social, and environmental surveys, and highlight problems encountered or anticipated, and recommend solutions; (ii) monthly progress reports; (iii) an expressway final alignment report and drawings; (iv) a detailed economic feasibility analysis report on the project and a detailed financial analysis report on the project and VEC; (v) update of the EIA, summary EIA, and EMP, and district-level updated resettlement plans, EMDP (or EMSA), and other social development plans, based on the final alignment; (vi) a detailed engineering design report and drawings on the expressway and its

Appendix 7 29

associated facilities; (vii) a project cost estimate report, (viii) a prequalification document, a prequalification evaluation report, a bidding document, and a bid evaluation for the civil works of the expressway project; and (ix) a project completion report to present records of the project implementation in all aspects, and give a summary of the preconstruction activities and the consultant’s activities.

Table A8: Total Expected Expertise Inputs to the Consulting Services

Expertise Persons Person-months

International Consultants

Team Leader 3 50 Highway Engineer 6 80 Geotechnical Engineer 3 15 Structural Engineer 6 30 Slope Protection Engineer 3 8 Bridge Engineer 6 22 Tunnel Engineer 3 8 Traffic System Engineer 3 9 Mechanical/Electric Engineer 3 9 Building Engineer 3 15 Construction Planner 3 12 Transport Economist 3 6 Financial Specialist 3 6 Environmental Specialist 3 6 Resettlement Specialist 3 72 Social Development Specialist 3 44 Procurement Specialist 3 30 Subtotal 60 422 National Consultants

Deputy Team Leader 6 76 Senior Highway Engineer 9 120 Senior Structural Engineer 12 60 Senior Bridge Engineer 9 33 Highway Engineer (CAD Operator) 15 125 Structural Engineer (CAD Operator) 8 65 Bridge Engineer (CAD Operator) 8 65 Geotechnical Engineer 12 60 Traffic System Engineer 3 9 Mechanical/Electric Engineer 6 18 Building Engineer 9 24 Cost Estimator 3 17 Transport Economist 6 12 Financial Specialist 6 12 Environmental Specialist 6 12 Resettlement Specialist 9 90 Social Development Specialist 9 141 Procurement Specialist 3 15 Office Manager 6 76 Subtotal 145 1,030 Total 205 1,452

Source: Asian Development Bank and Vietnam Expressway Corporation estimates.

30 Appendix 8

OUTLINE TERMS OF REFERENCE FOR DESIGN APPRAISAL CONSULTANTS A. Introduction 1. The consultants for the project design study complete the detailed designs for the Ben Luc–Long Thanh Expressway by November 2010, the Greater Mekong Subregion (GMS) Ha Noi–Lang Son Expressway by April 2011, and the GMS Ha Long–Mong Cai Expressway by May 2012. In accordance with the Government regulation, the Vietnam Expressway Corporation (VEC) engages another consultant to carry out appraisal of the detailed designs for each expressway before bidding for the civil works start. 2. The consulting services are provided by an international consulting firm, joint venture, or consortium of consulting firms, which are recruited in accordance with the Asian Development Bank's (ADB's) Guidelines on the Use of Consultants (2007, as amended from time to time). The consultant should have (i) sufficient experience on design of grade-separated highways and/or construction supervision of grade-separated highway construction in Viet Nam; (ii) sufficient technical expertise in highway geometric design, geological investigation, highway structural design, and highway facilities design required to carry out the above consulting services; and (iii) familiarity with the policies and guidelines in Viet Nam with respect to highway design, and also internationally recognized highway design standards. B. Terms of Reference 3. The tasks to be undertaken by the design appraisal consultant are as follows:

(i) Review draft engineering reports to be prepared by the consultants for the project feasibility and design studies.

(ii) Examine the given highway geometric designs; undertake road safety audit of the highway geometric designs; confirm accordance of the designs with the standards and regulations in Viet Nam, and propose necessary changes in the designs if needed.

(iii) Make geological investigations; review the given slope protection designs, confirm accordance of the designs with the standards and regulations in Viet Nam, and propose necessary changes in designs if needed.

(iv) Examine the given highway structural designs such as bridges, culverts, and drainage; confirm accordance of the designs with the standards and regulations in Viet Nam; and propose necessary changes in designs if needed.

(v) Examine the given highway facilities designs such as electric, information, communication, and tolling systems; confirm accordance of the designs with the standards and regulations in Viet Nam; and propose necessary changes in designs if needed.

(vi) Examine the given environmental mitigation works; confirm accordance of the designs with requirements provided in the environmental impact assessment prepared by the consultant for the project feasibility study, and standards and regulations in Viet Nam; and propose necessary changes in designs as needed.

(vii) Review cost estimates to be made by the consultants for the project feasibility and design studies.

(viii) Discuss outputs of the appraisal of the given highway detailed designs with the consultants for the project feasibility and design studies.

(ix) Prepare a design appraisal report and submit it to VEC.

Appendix 8

31

C. Required Expertise 4. The consulting services for each expressway are undertaken by an international consultant in association with national consultants. The total expected expertise inputs for the two expressways are 72 person-months (30 person-months of international and 42 person-months of national consulting services). The consultants should have expertise shown in Table A9.

Table A9: Total Expected Expertise Inputs to the Consulting Services

Expertise Persons Person-months

International Consultants

Project Manager/Highway Engineer 3 6 Bridge Engineers 3 6 Geotechnical and Tunnel Engineer 3 6 Structural Engineer 3 6 Traffic System Engineer 3 1.5 Building Engineer 3 3 Environmental Specialist 3 1.5 Subtotal 21 30 National Consultants

Highway Engineers 6 12 Bridge Engineer 3 6 Geotechnical and Tunnel Engineer 3 6 Structural Engineers 3 6 Traffic System Engineer 3 3 Electrical Engineer 3 3 Mechanical Engineer 3 3 Environmental Specialist 3 3 Subtotal 27 42 Total 48 72

Source: Asian Development Bank and Vietnam Expressway Corporation estimates.

D. Reporting Requirements 5. The consultants prepare a draft design appraisal report and submit it to VEC and the project design consultants in the midterm of the consulting service contract. The consultants prepare a design appraisal report and submit it to VEC at the end of the contract.

32 Appendix 9

PROCEDURE FOR RECRUITING CONSULTING FIRM FOR LOAN PROJECTS USING

CONSULTANTS’QUALIFICATION SELECTION

Appendix 10 33

REPORTING REQUIREMENTS 1. The Project Implementation Unit 3 (PIU3), on behalf of Vietnam Expressway Corporation (VEC), makes satisfactory arrangements for reporting the progress of project implementation. A. Proper Timing 2. For recruitment of project supervision consultants, the PIU3 submits to ADB for review and approval: (i) shortlist, request for proposal document, and evaluation criteria; (ii) technical proposal evaluation report; (iii) financial proposal evaluation report and overall ranking; (iv) minutes for contract negotiation meetings with the first-ranked consulting firm and draft contract documents; and (v) 3 copies of the signed contract documents. 3. For procurement of the civil works, the PIU3 submits to ADB for review and approval: (i) procurement data and information required for Specific Procurement Notice, and draft prequalification document; (ii) prequalification evaluation report; (iii) draft bidding documents; (iv) bid evaluation report; and (v) 3 copies of the signed contract documents. B. Every Quarter 4. The PIU3 monitors project implementation in accordance with the implementation schedule, and keeps ADB informed through quarterly progress reports of any significant deviations from the schedule. The quarterly reports summarizes information in detailed Project reports, including basic data related to the Project, utilization of funds, achievement of immediate development objectives, implementation progress, environmental management and monitoring, land acquisition and resettlement progress, compliance with loan covenants, and major issues and problems. 5. The PIU3 submits internal and external resettlement monitoring reports, which are prepared by VEC’s internal and external resettlement monitors, to ADB every quarter. The resettlement reports will be uploaded onto VEC’s website within two weeks of their submission. C. Every Year 6. VEC submits annual audited reports and related financial statements to ADB within 6 months of the end of each fiscal year. The audit opinion should include (i) a detailed description of the source of funds and expenditures made; (ii) an assessment of the adequacy of accounting and internal controls systems with respect to project expenditures and other financial transactions, to ensure safe custody of project-financed assets; (iii) a determination as to whether VEC has maintained adequate documentation for all financial transactions, specifically including the statement of expenditure and imprest account procedures; and (iv) confirmation of compliance with loan covenants on the debt service coverage ratio and debt–equity ratio of VEC. D. After Physical Completion of the Project 7. Within 6 months of physical completion, the PIU3 submits through VEC a project completion report to ADB, which provides a detailed evaluation of the project design, costs, performance of the project supervision consultants and contractors, the above performance indicators, social and environmental impacts, economic and financial assessment, and such other details as may be requested by ADB.

34 Appendix 11

SAMPLE PROGRESS REPORT A. Introduction and Basic Data Provide the following:

(i) ADB loan number, project title, borrower, executing agency;

(ii) total estimated project cost and financing plan;

(iii) status of project financing including availability of counterpart funds;

(iv) dates of approval, signing, and effectiveness of ADB loan;

(v) original and revised (if applicable) ADB loan closing date and elapsed loan period based on original and revised (if applicable) loan closing dates; and

(vi) date of last ADB review mission.

B. Utilization of Funds (ADB Loan and Counterpart Funds) Provide the following:

(i) cumulative contract awards financed by the ADB loan, and counterpart funds (commitment of funds to date), and comparison with time-bound projections (targets);

(ii) cumulative disbursements from the ADB loan, and counterpart funds (expenditure to date), and comparison with time-bound projections (targets); and

(iii) reestimated costs to completion, need for reallocation within ADB loan categories, and whether an overall project cost overrun is likely.

C. Project Purpose Provide the following:

(i) status of project scope/implementation arrangements compared with those in the report and recommendation of the President (RRP), and whether major changes have occurred or will need to be made;

(ii) an assessment of the likelihood that the immediate development objectives (project purpose) will be met in part or in full, and whether remedial measures are required based on the current project scope and implementation arrangements;

(iii) an assessment of changes to the key assumptions and risks that affect attainment of the development objectives; and

(iv) other project developments, including monitoring and reporting on environmental and social requirements that might adversely affect the project's viability or accomplishment of immediate objectives.

D. Implementation Progress Provide the following:

(i) assessment of project implementation arrangements such as establishment, staffing, and funding of the PMO or PIU;

(ii) information relating to other aspects of the EA’s internal operations that may impact on the implementation arrangements or project progress;

Appendix 11

35

(iii) progress or achievements in implementation since the last progress report; (iv) assessment of the progress of each project component, such as recruitment of

consultants and their performance; procurement of goods and works (from preparation of detailed designs and bidding documents to contract awards); and the performance of suppliers, manufacturers, and contractors for goods and works contracts;

(v) assessment of progress in implementing the overall project to date in comparison with the original implementation schedule—quantifiable and monitorable target, (include simple charts such as bar or milestone to illustrate progress, a chart showing actual versus planned expenditure, S-curve graph showing the relationship between physical and financial performance, and actual progress in comparison with the original schedules and budgets); and

(vi) an assessment of the validity of key assumptions and risks in achieving the quantifiable implementation targets.

E. Compliance with Covenants Provide the following:

(i) the borrower's compliance with policy loan covenants such as sector reform initiatives and EA reforms, and the reasons for any noncompliance or delay in compliance;

(ii) the borrower’s and EA’s compliance with financial loan covenants including the EA’s financial management, and the provision of audited project accounts or audited agency financial statements; and

(iii) the borrower’s and EA’s compliance with project-specific loan covenants associated with implementation, environment, and social dimensions.

F. Major Project Issues and Problems Summarize the major problems and issues affecting or likely to affect implementation progress, compliance with covenants, and achievement of immediate development objectives. Recommend actions to overcome these problems and issues (e.g., changes in scope, changes in implementation arrangements, and reallocation of loan proceeds).

36 Appendix 12

ADB’S ANTICORRUPTION POLICY

A. Introduction 1. ADB’s anticorruption policy is implemented rigorously to achieve the objectives of (i) supporting competitive markets and effective public administration, (ii) supporting promising anticorruption efforts and including anticorruption issues in country dialogue, and (iii) ensuring that ADB projects and staff adhere to the highest ethical standards. 2. ADB systematically identifies, in consultation with its member countries, opportunities for reducing corruption as part of its broader emphasis on promoting good governance and sound development management. In reducing corruption in the Asia and Pacific region, ADB will:

(i) address anticorruption issues in ADB lending and technical assistance operations, including during project preparation and supervision;

(ii) address anticorruption issues in country programming dialogue including the

country strategy and program (CSP);

(iii) cover anticorruption aspects in policy dialogue and policy-intensive lending operations;

(iv) undertake analyses of corruption-related issues in the context of loan-related

economic and sector work;

(v) support training, education, and dissemination activities among staff, government officials, consultants and contractors, representatives of civil society, and other ADB stakeholders;

(vi) compile best practices, in the region and elsewhere, concerning relevant

anticorruption issues and initiatives, and support for research and international efforts to combat corruption;

(vii) enforce strict guidelines on procuring goods and works and in selecting

consultants; and

(viii) ensure that ADB staff adhere to the highest ethical standards. B. Application of the Policy

1. Supporting Competitive Markets and Efficient, Effective, Accountable, and Transparent Public Administration

3. A major thrust of ADB’s anticorruption efforts is supporting competitive markets and ensuring transparent public administration. This effort has two components. The first seeks to reduce the scope of direct government intervention in the economy, in the belief that markets should be efficient, effective, and competitive, and have as few barriers to entry and exit as possible. This reduces the opportunity for firms or officials to take advantage of artificially restricted markets or suboptimal pricing to demand monopoly rents. The second component focuses on supporting improvements in public administration and public sector management.

Appendix 12

37

4. In advancing such initiatives, ADB seeks to adopt a proactive stance. Most priority governance initiatives can make corrupt behavior more difficult to engage in and more readily detected once it occurs. Over the longer term, ADB is likely to be more effective if it focuses its anticorruption efforts on measures for prevention and not on short-term efforts aimed at prosecution, although the latter is necessary to provide an appropriate deterrent and to ensure the integrity of ADB operations.

2. Supporting Promising Anticorruption Initiatives, and Country Dialogue 5. ADB may also be called upon to assist its developing member countries (DMCs) to pursue an explicit anticorruption program. ADB assistance is guided by three considerations: (i) the nature of the DMC request for ADB assistance, (ii) the degree to which the request is consistent with ADB’s broader country operational strategy and ongoing efforts in governance and capacity building, and (iii) the extent to which the request falls in an area where ADB has expertise.

3. Ensuring that ADB Projects and Staff Adhere to the Highest Ethical Standards

6. If ADB’s efforts to reduce unethical behavior between its DMCs and suppliers and contractors are to be credible, it is essential that ADB staff be beyond reproach and that ADB’s internal regulations and procedures support the highest ethical standards. Toward this end, the third pillar of ADB’s anticorruption policy calls for robust internal measures to ensure the integrity of ADB operations along the following dimensions:

(i) maintaining the integrity of ADB lending and technical assistance (TA) operations by considering issues of corruption more explicitly in the formulation of the CSP;

(ii) applying ADB’s strengthened procurement policy: rejecting a proposal where

corrupt or fraudulent practices were employed by the bidder, canceling the portion of the loan allocated thereto, and making such bidders ineligible for future ADB procurement;

(iii) creating and using independent internal reporting mechanisms to address

allegations of corruption among ADB staff or within ADB operations;

(iv) enhancing integrity through project design and improving the quality of oversight for ADB loans and TAs; and

(v) ensuring that all ADB staff are familiar with the anticorruption policy and ADB’s

code of conduct, and act in a manner consistent with both the letter and the spirit of these statements.

C. Implementation Arrangements 7. The Integrity Division of the Office of the Auditor General (OAGI) is the point of contact for allegations of fraud and corruption in ADB-financed activities or among its staff. On 30 September 2005, the President approved the Integrity Guidelines and Procedures, which established detailed procedures for OAGI’s work. The Integrity Guidelines and Procedures were developed in consultation with the Budget, Personnel, and Management Systems Department

38 Appendix 12

(BPMSD), the Office of the General Counsel (OGC), and other relevant departments, and will be reviewed and updated periodically in consultation with the same departments. 8. With regard to ADB lending and TA operations, or to matters dealing with ADB staff, staff are required to report to OAGI, for investigation, any allegations or evidence of corruption that they receive or encounter. In the context of this policy, “evidence” is any physical object, record, document (in any form), testimony or other information that tends to establish the existence or non-existence of an allegation or fact. Individual ADB staff members do not investigate such allegations or evidence of suspected corruption, except as they may be specifically requested to do so by OAG. ADB staff must, however, consider the impact of corruption on ADB operations (such as in policy dialogue, programming decisions, and the administration of projects) in their respective areas of responsibility. 9. In rare cases where rapid follow-up actions may be needed to prevent the imminent loss or diversion of ADB resources or to protect the safety of ADB staff and consultants, staff may address these issues explicitly with the relevant entity, executing agency, or appropriate law enforcement agencies after clearance from their head of department or office, OAGI and, where law enforcement agencies are involved, OGC. Any discussion with a given entity or government agency should, however, be limited to a specific operation or set of operations. Furthermore, the head of department or office should advise OAGI, and standard ADB operating procedures should be applied at the earliest possible time. 10. Once the allegation and/or evidence has been turned over to OAGI, OAGI will screen it in accordance with its established procedures. Upon screening, OAGI will determine whether to proceed with an investigation or not. OAGI may consult with OGC and/or other departments or offices.

1. Ensuring Integrity in ADB Financed Activity

11. In light of the complex nature of corruption, it is important that ADB Management and staff are given flexibility in dealing with individual cases within the framework of the anticorruption policy. While acknowledging the need for fairness and consistency in its operations, and strongly affirming the need for its operations to adhere to the highest levels of probity and integrity, ADB notes that different types of corruption will require different responses. There is a need for careful judgment based on accurate information and the specifics of the situation. If OAGI’s investigation determines that fraud or corruption has occurred in an ADB-financed loan or TA project, then—depending on the nature of the violation and the government’s willingness to act decisively in addressing it—ADB could pursue a range of options. Breaches of specific loan regulations or covenants could result in, among others, a decision by Management to refuse to finance certain expenditures, suspend disbursements, accelerate the maturities of loans, or cancel a portion of or an entire loan. ADB could request the reassignment, demotion, dismissal or possible prosecution of personnel associated with various components of the project. 12. If ADB determines that fraud or corruption has reached such proportions that it poses a significant impediment to the probity and integrity of ADB operations or the attainment of a country’s fundamental development objectives, it could elect to lower or suspend ADB lending and/or TA operations to that country after discussions with the national authorities and consultation with ADB’s Board of Directors. Conversely, where a country has made significant progress in improving the efficiency, effectiveness, and integrity of its public and private sectors,

Appendix 12

39

ADB could elect to accelerate the lending program or provide additional TA resources to ensure sustainability of the reforms.

2. Anticorruption Issues in Project Design 13. Individual projects must be designed bearing in mind the risk of fraud or corruption within the project. Projects should also be designed in ways that support good public sector management. Where feasible, the financial management and administration of ADB projects should be integrated into the regular systems of government to prevent “enclaving”—the creation of quasi-independent units within a broader organization with their own accounting and reporting procedures. Projects aimed at strengthening public institutions should include components that enhance their capacity to prevent and detect fraudulent or corrupt practices, such as improving cash management (particularly in sectors that generate user fees or other revenues) or their internal audit and inspector general functions. Appraisal missions should consider the best means for ensuring the timely submission of project accounts. The selection of appropriate procurement modalities should be carefully considered, including the design of contract packages.

3. Anticorruption Issues in Project Monitoring and Supervision 14. Project processing missions provide opportunities for ADB staff to address anticorruption issues in project design. In this context, particular attention needs to be given to strengthening the ability of counterpart agencies to manage financial and human resources effectively and to carefully monitor their performance. Country portfolio review missions, country disbursement missions, and project review missions provide useful venues for discussing the policies and practices that impede the efficient implementation of ADB projects. ADB staff responsible for conducting such missions should take advantage of these opportunities to promote greater transparency, accountability, and efficiency within ongoing ADB operations. Recommendations for future improvements should be circulated to OAG, the Strategy and Policy Department (SPD), the Operations Evaluation Department, and the Regional and Sustainable Development Department (RSDD). 15. ADB’s anticorruption efforts will emphasize the implementation of practical and cost effective prevention control measures, consistent with the Charter principle of “economy and efficiency”. Illustrative examples would include ensuring that staff with the requisite skills in accounting and financial management are recruited by the executing or implementing agency, and that robust internal control systems and accounting systems are in place before loan disbursement. Other measures include the following:

(i) identifying projects that are particularly at risk,

(ii) conducting direct field investigations for major infrastructure projects,

(iii) auditing executing agencies directly involved in project implementation,

(iv) disseminating a description of ADB’s anticorruption policy in local languages, and

(v) improving cooperation with capable nongovernment organizations (NGOs) in monitoring certain facets of project implementation.

40 Appendix 12

16. Directors and staff should devote attention and resources to upgrading the quality of project monitoring and implementation missions, particularly for high-risk projects. The technical expertise of these missions should be broadened to ensure that staff with relevant qualifications, particularly in financial, managerial, and policy areas, participate. Mandatory training on recognizing “red flags” and areas of potential vulnerability will be provided to financial analysts and project implementation officers. Designing appropriate efficiency indicators to monitor the project’s financial and physical progress regularly should be considered.

4. Ensuring the Integrity of ADB Staff 17. Violations of the duties and obligations incumbent on staff in accordance with ADB’s rules and procedures will be dealt with severely. Depending on the gravity and the circumstances of the case, disciplinary measures may be imposed pursuant to ADB’s administrative orders. 18. In addition to any disciplinary action taken against staff, ADB staff found to have engaged in corrupt conduct will be required to make full restitution of any benefits arising from such corrupt conduct. This procedure will apply equally to situations in which staff improperly and unlawfully enrich themselves and/or those close to them, and circumstances in which they induce others to do so.

5. Audit

19. ADB will undertake measures to improve the quality of project audits. 20. Specialized training in forensic accounting and other investigative techniques will be provided to selected OAG staff. Ongoing OAG efforts to streamline internal work procedures to free up greater resources for audits of high-risk and high-impact areas will continue. OAGI will conduct audits of project procurement-related activities, which will help prevent and detect corruption and fraud. OAG will also institute a program of random audits of ADB projects. 21. OAG will strengthen its exchange of information with supreme audit institutions in the DMCs, and play an active role in helping to upgrade the audit capability of such institutions.

6. Anticorruption Issues in Country Programming, Policy and Sector Dialogue 22. ADB staff who prepare CSP documents, and staff responsible for processing and/or implementing loans and TA projects, need to address corruption in the context of broader governance and capacity-building issues. They should be knowledgeable about issues of corruption and its impact within their particular geographic and/or sectoral sphere of operations. 23. ADB has several mechanisms for dialogue with its DMCs on issues of governance (including corruption), ranging from CSP discussions to the policy and sector dialogue accompanying various lending operations. In keeping with the evolving practice of the International Monetary Fund and the World Bank, Management and staff will consider issues of fraudulent or corrupt practices more explicitly in country risk analysis and in formulating the CSP. The CSP documents will discuss and recommend ways in which ADB can help advance the principles of sound development management, including measures that would help to combat fraudulent or corrupt practices.

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24. ADB staff should consider the history of ADB operations in a given sector or country, and whether ADB projects are likely to be affected by fraudulent or corrupt practices during their design or implementation. They should also consider the extent to which that country’s ability to attain its national development objectives is compromised by fraud and corruption, and the degree to which the government is willing or able to control corruption if it threatens the effectiveness of ADB projects and/or that country’s general economic and social development. 25. As a general rule, staff should address problems of fraud and corruption in the context of broader governance and public sector management issues. Particular effort should be devoted to:

(i) continuing to expand ADB’s assistance on issues of governance and capacity building, with particular attention to promoting market liberalization and public administration reform;

(ii) giving increased emphasis to strengthening key laws and institutions for

advancing transparency and accountability, such as supreme audit institutions, procurement agencies, regulatory agencies, ombudsman offices, administrative courts, and public information laws;

(iii) giving increased emphasis to strengthening key functions for advancing

transparency and accountability, such as civil service recruitment and promotion, or cash management and expenditure control;

(iv) supporting promising anticorruption initiatives on a case-by-case basis; and

(v) supporting regional initiatives, where appropriate, and research on advancing

accountability and transparency in the Asia and Pacific region. 26. Staff engaged in policy and sector dialogue should integrate these concerns into their discussions with DMC governments.

7. Treatment of Fraud and Corruption Issues in ADB Reports and the Release of ADB Documents

27. When there is compelling evidence that corrupt activities have hampered the effectiveness of ADB projects or lowered their rate of return, this evidence should be explicitly noted in ADB documents, including project supervisory reports, project completion reports, project performance evaluation reports, and other relevant documents so that appropriate remedial action can be taken. 28. Management and staff should use plain language in the reports, and avoid using opaque or euphemistic language that may obscure the nature of the problem. This principle also applies to country programming exercises and ADB research and analytical work.

8. The Media and Policy Dissemination 29. Vice presidents and heads of departments or offices (with the approval of their vice presidents) may speak to the media as they deem necessary about issues of fraudulent or corrupt practices in the conduct of ADB operations. Other ADB staff shall seek the approval of their head of department or office, unless discussing issues of fraud and corruption in general

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terms. Staff should not speak to the media about either specific examples of fraud or corruption among suppliers or in DMCs, or the general level of corruption within an ADB-financed activity, an entity, or country without clearance from the vice president concerned or, in his or her absence, the head of the Department of External Relations (DER). 30. The operational departments and RSDD will work in collaboration with SPD and OGC to disseminate current and updated information about the policy to ADB member countries and executing agencies. The Central Operations Services Office will work with OGC to disseminate current and updated information about the policy to ADB suppliers and consultants. 31. In consultation with DER, OAGI will (i) maintain for public dissemination a simplified brochure and other information materials describing ADB’s anticorruption policy, and (ii) update and disseminate these materials. OAGI will also maintain its website as part of the ADB internet site.

9. Partnerships 32. ADB cooperates closely with other international organizations, such as the International Monetary Fund, the World Bank, and other multilateral development banks; United Nations agencies; the Organization for Economic Co-operation and Development; and bilateral development agencies in supporting international and country-specific efforts to combat corruption. It may work with NGOs on various international efforts to control corruption. It may work with NGOs on specific anticorruption initiatives within a particular country, although such work needs to be undertaken only with the full support and backing of the government concerned.

10. Staff Responsibilities 33. While it is not the intention of this policy to turn ADB staff into police officers, or to make the objective of reducing corruption paramount over other development goals, all departments and staff have a compelling obligation to ensure the integrity of ADB operations within their respective areas of responsibility. ADB staff must familiarize themselves with the content of this policy and ADB’s code of conduct, and must be prepared to respond appropriately as circumstances demand (Asian Development Bank Administrative Order 2.02, Section 4.). 34. All senior ADB staff, including heads of all ADB departments and offices, their deputies, directors, and the heads of all resident or regional missions and representative offices are responsible for supervising all employees within their sphere of responsibility. They should exercise appropriate due diligence in management and oversight, ensuring that ADB staff and all other persons who are associated with, and provide services for their unit, adhere to the highest ethical standards. They should respond to any allegations or evidence they encounter among either ADB staff or within ADB operations in accordance with the relevant staff guidelines and procedures. The same principle applies to mission leaders with respect to all mission members. 35. All departments and staff have an obligation to ensure the integrity of ADB operations within their respective areas of responsibility. Under the policy, each professional and support staff member is required to:

(i) adhere to the “Code of Conduct” set forth in ADB’s administrative orders, regarding rights, duties, and responsibilities of staff;

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(ii) familiarize themselves with the contents of this policy and be prepared to

respond appropriately, as required, within their specific area of competence in advancing integrity among ADB member governments, contractors, and suppliers; and

(iii) ensure the probity and integrity of ADB operations by reporting any allegations or

evidence of fraudulent or corrupt practices to OAGI for investigation. 36. Individual staff members are ADB’s front line of defense against fraud and corruption. They could be held responsible for any failure to take reasonable precautions or to turn over allegations or evidence of fraudulent or corrupt practices within ADB lending and TA operations or among ADB staff to OAGI for investigation. 37. OAGI and BPMSD, working in conjunction with other relevant ADB departments, will provide both specialized training on issues of governance, ethics and anticorruption to all ADB staff and more general training on recognizing potential danger areas to financial analysts and project implementation officers. Working in collaboration with DER, OAGI and BPMSD will also conduct general information briefings and produce and update information material, as appropriate. 38. To monitor and coordinate ADB’s efforts with respect to anticorruption initiatives and programming, the departments and offices concerned will be requested to provide SPD, OAG, and OGC (with respect to legal frameworks and legal issues of relevance to other areas of action) with periodic appraisals of the ways in which they are implementing the policy.