project administration manual - asian development …...resource endowments,3 an ample pool of...

Project Number: 47152 Loan Number(s): October 2016

Republic of the Union of Myanmar: Irrigated

Agriculture Inclusive Development Project

Project Administration Manual

ABBREVIATIONS

ACC – agricultural coordination center ADB – Asian Development Bank AFD – Agence Française de Développement AsIF – Asian Investment Facility of the European Union AMD – Agricultural Mechanization Department CDZ – Central Dry Zone DOA – Department of Agriculture DMF – design and monitoring framework EA – executing agency EARF – environmental assessment and review framework EMP – environmental management plan FC – frontline center FMA – financial management assessment GAP – Gender Action Plan GRM – grievance redress mechanism ha – hectare IA – Implementing agency ICB – international competitive bidding IEE – initial environmental examination IWRM – integrated water users management IWUMD – Irrigation and Water Utilization Management Department M&E – Monitoring and evaluation MOALI – Ministry of Agriculture, Livestock and Irrigation NCB – national competitive bidding OAG – Office of the Auditor General O&M – operation and maintenance PAM – project administration manual PCU – public complaints unit PMU – project management unit PPMS – project performance management system PPTA – project preparatory technical assistance QCBS – quality- and cost based selection REGF – resettlement and ethnic groups framework SOE – statement of expenditure SPS – Safeguard Policy Statement TOR – terms of reference WUG – water user group

CONTENTS

Page

I. PROJECT DESCRIPTION 1

A. Rationale 1 B. Impacts and Outcome 4 C. Outputs 4

II. IMPLEMENTATION PLANS 5

A. Project Readiness Activities 5 B. Overall Project Implementation Plan 6

III. PROJECT MANAGEMENT ARRANGEMENTS 7

A. Project Implementation Organizations: Roles and Responsibilities 7 B. Key Persons Involved in Implementation 11 C. Project Organization Structure 12 D. Project Management Unit Structure 12 E. Selection Criteria 13 F. Community Participation 14 G. Irrigation Management, Finance (including O&M) and Asset Management 19

IV. COSTS AND FINANCING 23

A. Detailed Cost Estimates by Expenditure 26 B. Allocation and Withdrawal of Loan Proceeds 27 C. Detailed Cost Estimates by Financier ($ ‘000) 28 D. Detailed Cost Estimates by Outputs/Components 29 E. Detailed Cost Estimates by Year ($’000) 30 F. Contract and Disbursement S-curve 31 G. Fund Flow Diagram 32

V. FINANCIAL MANAGEMENT 32

A. Financial Management Assessment 32 B. Disbursement 35 C. Accounting 36 D. Auditing and Public Disclosure 37

VI. PROCUREMENT AND CONSULTING SERVICES 38

A. Advance Contracting 38 B. Procurement of Goods, Works and Consulting Services 38 C. Procurement Plan 40 D. Consultant's Terms of Reference 40

VII. SAFEGUARDS 40

A. Environment 40 B. Land Acquisition 42 C. Ethnic Groups 43

VIII. GENDER AND SOCIAL DIMENSIONS 43

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 50

A. Project Design and Monitoring Framework 50 B. Monitoring 50 C. Evaluation 50 D. Reporting 51 E. Stakeholder Communication Strategy 51

X. ANTICORRUPTION POLICY 52

XI. ACCOUNTABILITY MECHANISM 52

XII. RECORD OF PAM CHANGES 53

Project Administration Manual Purpose and Process

1. The project administration manual (PAM) describes the essential administrative and

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

2. The Ministry of Agriculture, Livestock and Irrigation (MOALI), the executing agency, and its Irrigation and Water Utilization Management Department (IWUMD), and Department of Agriculture, the implementing agencies, are wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with the Government and ADB’s policies and procedures. ADB staff is responsible to support implementation including compliance by the executing and implementing agencies of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.

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

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

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

5.

1

I. PROJECT DESCRIPTION

A. Rationale

1. Development issues. Agriculture accounted for 31% of the country’s gross domestic product, 52% of employment, and 20% of exports in 2014.1 Despite good land2 and water resource endowments,3 an ample pool of low-cost labor, and proximity to large regional markets, Myanmar has significantly underperformed neighboring countries in terms of labor and land productivity since the 1960s. Growth in the agriculture sector was only 3.3% in 2014, and most farming systems are caught in a low equilibrium trap: low inputs result in low productivity and low quality of outputs that bring low returns. This contributes to a high incidence of poverty, food insecurity, indebtedness, malnutrition, and low levels of education among the rural poor.

2. Although sector indicators reflect an economy in transition, Myanmar’s agricultural development potential is considerable and offers a significant opportunity for inclusive economic growth.4 The country has 18.2 million ha of arable land, of which only 13.3 million ha (73%) are cultivated at present. In the monsoon season, only 2.1 million ha of cultivated land are irrigated, while the remaining 11.2 million ha are rain-fed. Rice is the main crop. Other crops include pulses, oilseeds, maize, cotton, rubber, sugarcane, tropical fruits, and vegetables.5 The potential for further developing the value chain for these crops is significant.

3. Sector constraints. The CDZ has the second-highest population density but remains one of the least developed.6 Seasonal water shortages caused by low and erratic annual rainfall patterns and sandy and fragile soils render agriculture a high-risk endeavor.7 Key sector constraints in the CDZ include (i) weak land and water resource management; (ii) disjointed agricultural value chains, with poor access to support services, inputs, and inadequate post-harvest operations and marketing arrangements; (iii) poor irrigation infrastructure and weak management, resulting in unreliable and inequitable access to water; (iv) insufficient operational flexibility to cope with the emerging impacts of climate change; and (v) insufficient public investment and private sector participation.

4. Revitalizing agriculture and promoting agricultural value chains. Stimulating and developing agricultural value chains will help ensure balanced, integrated rural development and income growth for farmers in the CDZ. Improvements in the value chains through research and development and extension delivery of improved cropping systems that increase the

1 ADB. 2015. Country Information Note. Manila.

2 In Myanmar, the average farm size of 3 ha is higher than in other developing Asian countries. Myanmar also has a

larger share of the workforce working in agriculture, and the average age of farmers is lower. 3 Myanmar’s water resources are considerable. Four river systems supply more than 19,000 cubic meters per capita

of water each year, compared with an average 4,000 cubic meters per year across Asia.

The country currently uses

less than 10% of its water resources.

4 ADB. 2014. Myanmar: Unlocking the Potential—Country Diagnostic Study. Manila.

5 Myanmar is the world’s second-largest producer of pulses and beans, and third-largest for sesame after the

People’s Republic of China and India. 6 The CDZ covers more than 54,000 square kilometers, encompassing the lower Sagaing region, the central and

western Mandalay region, and most of Magway region. It is home to more than 15.4 million people, accounting for 25% of the country’s population, 76% of whom live in rural areas. Government of Myanmar, Ministry of Immigration and Population. 2015. The 2014 Myanmar Population and Housing Census: Volume 2. Nay Pyi Taw.

7 Situated in the shadow of the Rakhine mountain range, the CDZ has an average annual rainfall of just 800

millimeters. Rainfall is negligible during Myanmar’s 6-month dry season and the effects of drought and dry spells are a key determinant of chronic poverty and food insecurity in the CDZ. Irrigation is needed to produce a dry season crop and essential even for securing a good crop during the monsoon season rains.

2

production of pulses, oilseeds, and other non-rice crops are necessary to raise both on-farm and off-farm agricultural productivity. Predictable water supply is an important prerequisite but only part of the solution. Along with improving access to irrigation, a broader focus on integrated value chain development will help enhance the production base and ensure that farmers have more access to production credit and quality seeds and other farm inputs at reasonable prices.

5. Irrigated agriculture. Myanmar increased its investment in new irrigation systems in 1960 and stepped this up after 1990, but construction quality and maintenance have often been poor.8 The condition of these systems has declined, resulting in low efficiency and productivity. Traditional arrangements for irrigation management have also been undermined by decades of top-down administrative control. The government lifted a restriction on irrigating non-rice crops in 2014. The potential now exists to operate existing systems more flexibly as storage systems, increasing water utilization and diversifying crop production, for which the CDZ has a comparative advantage over other areas in Myanmar. The four project districts of Magway, Meiktila, Shwebo, and Yamethin have a combined irrigable area of more than 75,000 ha, of which the project will cover about 20,000 ha (6% of the total irrigated area in CDZ).9 The average annual cropping intensity of the subprojects studied under the project preparatory TA is broadly typical of the CDZ. It ranges from 65% to 130% and averages 110%. These systems need to be rehabilitated, modernized, and better managed by the Ministry of Agriculture, Livestock, and Irrigation (MOALI) and the farmers to make them more flexible and responsive to the farmers’ requirements.

6. Climate vulnerability and mitigation. Myanmar is highly vulnerable to severe climate events, particularly cyclones. Although conditions vary considerably between regions, climate changes observed during 2005–2015 have included higher temperatures, higher rainfall, and increased intensity of rains, with longer dry seasons and delays in the onset of the rainy season. This trend suggests that in future, longer dry seasons and higher temperatures will increase crop water requirements, but higher and more intense rainfall will increase runoff. All irrigation systems covered by the project have reservoirs, which may allow storage of increased monsoon runoff for subsequent use to increase cropping intensity. Overall, climate change is expected to have a positive impact on crop intensities in reservoir-backed irrigation systems, but more intense rainfall and flood flows will need improved drainage infrastructure.

7. Institutional and governance reforms to improve water management. Myanmar needs to strengthen its institutional and legal framework for IWRM and irrigation management. Irrigation is still guided by the Burma Canal Act of 1905 and it is not covered by the 2006 Conservation of Water Resources and Rivers Law, which focuses on river navigation and the role of the Ministry of Transport. No national body exists to coordinate water resources, but the MOALI recognizes the need to continue developing policies, legislation, and institutions to strengthen IWRM. In 2013, the Ministry of Transport received support from the Government of the Netherlands to develop an IWRM strategy.10 An ADB TA is supporting the IWRM strategy

8 Nationwide, there has been rapid construction of dams and irrigation coverage since the 1960s, and particularly

after 1990, but the currently developed area is still just over 20% of the potential area of about 10 million ha. 9 The CDZ has a combined irrigated area of about 350,000 ha, 25% of the total irrigated area in Myanmar. Of 240

projects built since 1998, 130 are located in the CDZ. Of these, 113 have reservoirs that make them relatively resilient to climate change. International Water Management Institute. 2013. Water Resource Assessment of the Dry Zone of Myanmar: Final Report for Component 1. Colombo.

10 P. van Meel et al.. 2014. Myanmar Integrated Water Resources Management Strategic Study: From Vision to Action. Amersfoot, the Netherlands.

3

through water allocation and water demand modeling in the Samon River Basin in the CDZ. 11 These efforts should help to identify pathways to raising water productivity at the basin level. Irrigation service fees are currently set very low at MK1,950 per acre, and revenue flows are reduced by weak collection arrangements. Nevertheless, agricultural production and irrigation water productivity can be increased by establishing key performance indicators related to crop areas and the reliability, timeliness, and equity of water supply and by introducing asset management systems for improved operation and maintenance (O&M).

8. Government strategy. The current policy environment is favorable to medium-term agriculture sector growth, enhanced by agricultural policy liberalization and a raft of reforms and legislation since 2011. The newly elected government sees agricultural development as critical to achieving inclusive growth, developing market mechanisms, creating social stability between agriculture-based ethnic communities, and accelerating rural development and poverty reduction. The government’s 5–year agriculture sector plan sets key objectives to improve irrigation and flood protection, crop production, and agro-industry; and to strengthen markets, human resource development, and research.12 It aims to increase cropping intensity to 160% and irrigated area to 2.25 million ha by 2021. In 2016, the former Ministry of Agriculture and Irrigation was merged with the Ministry of Livestock, Fisheries, and Rural Development to create the MOALI. A single ministry will be better able than its predecessors to coordinate whole farm development of crops, improvement of on-farm and nonfarm livelihoods, and promotion of value chains. In addition to contributing to the 5-year plan targets, the project is aligned with Myanmar’s long-term national comprehensive development plan and its rice sector development and climate-smart agriculture strategies.13

9. Sector modality and Project features. Consistent with the sector modality, the project addresses key aspects of Myanmar’s agriculture sector 5-year plan and associated sector strategies (footnotes 15 and 16). It will support their implementation and help in developing relevant sector policies within the MOALI. It includes components that will help diversify agriculture, modernize irrigation, promote private sector development, and enhance human resources. By targeting the CDZ, the project will focus on one of the most food-insecure, water-stressed, climate-sensitive, and natural resource-poor regions in Myanmar. Uncertain climatic conditions make well-functioning irrigation systems critical to successful crop production and sustaining the livelihoods of farmers and farm workers. Demand growth is strongest in the diversification of crops such as oilseeds and pulses and commercial horticultural crops. When combined with help to develop farmer associations and establish linkages with local private sector companies for improved market access, the cultivation of these crops offers the best prospects for boosting agricultural profitability.

10. ADB experience and lessons learned. This will be the first ADB-financed irrigation project in Myanmar since restarting operations in 2012, but ADB regional post-evaluation studies indicate that, along with infrastructure improvements, the outcomes of irrigation projects are enhanced when combined with agricultural support services and comprehensive policy and

11

Myanmar Dry Zone Study financed under ADB. 2011. Regional Technical Assistance for Knowledge and Innovation Support for ADB’s Water Financing Program. Manila.

12 Government of Myanmar, MOALI. 2016. Agriculture Sector Second Five-Year Plan (2016/2017–2020/2021). Nay

Pyi Taw. 13

Government of Myanmar, Ministry of National Planning and Economic Development. 2013. Framework for Economic and Social Reforms: Policy Priorities for 2012–15 towards the Long-Term Goals of the National Comprehensive Development Plan. Nay Pyi Taw; Government of Myanmar, Ministry of Agriculture and Irrigation. 2015. Myanmar Rice Sector Development Strategy. Nay Pyi Taw; and Government of Myanmar, Ministry of Agriculture and Irrigation. 2015. Myanmar Climate-Smart Agriculture Strategy. Nay Pyi Taw.

4

institutional reforms to promote agricultural value chains. ADB irrigation projects have a mixed track record in participatory irrigation management and management transfer. Recognizing these lessons, the project will include a diagnostic assessment of agricultural diversification options and a participatory assessment of system-wide irrigation modernization needs to inform training programs and extension needs. It will include a revision of design standards as appropriate and consideration of financing options for O&M costs. Capacity building for MOALI’s Irrigation and Water Utilization Management Department (IWUMD) and water users’ groups (WUGs) will strengthen irrigation system management.

11. Development coordination. Development partners such as AFD, the International Fund for Agriculture Development, the Japan International Cooperation Agency, and the World Bank are reengaging in the agriculture sector in Myanmar. They are working with MOALI to introduce regional and global best practices in the CDZ to achieve sustainable smallholder agriculture, irrigation, and rural development. Projects have complementary objectives and take a coherent approach to sector development and improvement of irrigated and rain-fed agriculture. Development partners avoid duplication by covering different areas of the CDZ, but promote consistency to ensure coordination, lesson sharing, and wide synergy. 14

12. Alignment with ADB strategies and plans. The project is aligned with ADB’s interim country partnership strategy for 2012–2014 (extended to 2016)15 and the proposed country partnership strategy, 2017–2021 and is included in ADB’s country operations business plan for 2016–2018. These strategies aim to help the government achieve sustainable and inclusive growth to create jobs and reduce poverty. It is in line with ADB’s Operational Plan for Agriculture and Natural Resources, 16 which calls on ADB to support value chain linkages and build climate change resilience in natural resources. It supports ADB’s Water Operational Plan,17 which focuses on water use efficiency, enhancing agricultural water productivity and addressing IWRM.

B. Impacts and Outcome

13. The impacts of the project will be food security for domestic consumption and higher nutritional value by all citizens attained, socioeconomic status of rural people through increased agricultural productivity enhanced, and quality and standard of agricultural products to compete in international markets improved. These impacts are aligned with the government’s midterm agriculture sector plan (footnote 12). The outcome will be income increased and poverty reduced for rural populations in the project areas.

C. Outputs

14. Output 1: Effective agricultural value chains in oilseeds, pulses, and horticultural crops developed. To diversify agriculture and promote exports, the project will support farmers, landless communities, and other key participants in the four project districts to develop and

14

Development Coordination (accessible from the list of linked documents in Appendix 2). 15

ADB. 2012. Interim Country Partnership Strategy: Myanmar, 2012–2014. Manila; ADB. 2014. Country Operations Business Plan: Myanmar, 2015–2017. Manila; ADB. 2015. Country Operations Business Plan: Myanmar, 2016–2018. Manila.

16 ADB. 2015. Operational Plan for Agriculture and Natural Resources: Promoting Sustainable Food Security in Asia and the Pacific in 2015–2020. Manila.

17 ADB. 2011. Water Operational Plan, 2011–2020. Manila.

5

promote agricultural value chains for oilseeds, pulses, and horticultural crops.18 Key interventions will include the (i) establishment of district-level hub frontline centers, to serve as a link between government and private sector, with provision for market promotion and collaboration with commodity associations and chambers of commerce, development of market information systems, and facilitation of contract farming ventures with smallholder farmer groups and cooperatives; (ii) establishment of irrigation system-or township-level satellite frontline centers to support agricultural coordination committees (ACCs), through organization of farmer and producer groups, delivery of improved seed and inputs, provision of mechanization services, and post-harvest operations, and (iii) promotion of climate-smart agriculture.

15. Output 2: Reliability of agricultural water supplies improved and irrigated area increased. The project will support rehabilitation, modernization, and improved management of about five irrigation systems to improve the reliability of water supplies to about 20,000 ha19 of irrigated land within Magway, Meiktila, Shwebo, and Yamethin districts. It will (i) finance the planning, design, supervision, civil works, and materials to improve irrigation infrastructure;20 and (ii) improve irrigation management from the township to the tertiary levels through capacity building within the IWUMD, the ACCs and their subsidiary committees, and WUGs. Activities will include the introduction of asset management; improvement of reservoir operations, agricultural planning, and irrigation scheduling; and performance monitoring. WUGs will be developed incrementally starting from the existing farmer-led management arrangements. The project will promote active participation by irrigation system users in the design of infrastructure and provide gender-inclusive training on system O&M, water management, and governance.

II. IMPLEMENTATION PLANS

A. Project Readiness Activities

Table 1: Project Readiness Activities

2016 2017

Indicative Activities J J A S O N D J Responsibility

Establish project implementation arrangements MOALI

Advance contracting actions MOALI

DED for Chaunmagyi System (Core Subproject)

MOALI, PPTA Consultants

Loan negotiations MOALI, MOPF, ADB

Government budget inclusion MOALI, MOPF

ADB Board approval ADB

Loan signing MOPF, GOM

Government legal opinion provided GOM

Loan effectiveness ADB, GOM

ADB = Asian Development Bank; GOM = Government of Myanmar; MOALI = Ministry of Agriculture, Livestock and Irrigation; MOPF = Ministry of Planning and Finance; PPTA = Project Preparatory Technical Assistance

18

Value chain development will support higher value crops grown in the CDZ, namely oilseeds (sesame, groundnut and sunflower), pulses (green gram, black gram, chickpea), and horticultural crops (grapes and vegetables).

19 Parallel cofinancing by AFD is expected to increase the coverage area by 16,000 ha.

20 This will involve improving water control structures, expanding drainage capacity to cope with climate change, repairing canal banks, strengthening sediment management, improving selected tertiary units, and demonstrating drip irrigation.

6

B. Overall Project Implementation Plan

Donor

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

Advance action for recruitment of consultants All 1 Loan

Agricultural Development Unit operational All 2 Grant

Project Initiation - PMU establishment All

Mandalay Region - Package 1 sub-projects (Chaungmagyi - 7,500ac) ADB

Surveys 1 1

Consultations 1 1

Design 1 1 1

Procurement 1 1 1 1

Construction 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Irrigation management planning and initiation 2 2 2 2 2 2 2

Irrigation managent strengthening and support 2 2 2 2 2 2 2 2 2 2 2 2

Magway Region - Package 1 sub-projects (Natmauk -25,000 ac) AFD

Surveys 1 1

Consultations 1 1

Design 1 1 1 1

Procurement 1 1 1

Construction 1 1 1 1 1 1 1 1 1 1 1 1

Irrigation management planning and initiation 2 2 2 2 2 2 2 2

Irrigation managent strengthening and support 2 2 2 2 2 2 2 2 2 2

Agricultural Component - Yamethin and Magway I

Value chain ADB+AFD 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Seeds & mechanisation ADB+AFD 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Good Agricultural Practices AsIF 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

Mandalay Region - Package 2 sub-projects (approx 15,000 ac) ADB

Feasibility studies 1 1

Surveys & consultations 1 1

Design 1 1 1

Procurement 1 1 1

Construction 1 1 1 1 1 1 1 1 1 1 1 1


Irrigation managent strengthening and support 2 2 2 2 2 2

Magway Region - Package 2 sub-projects (approx 7,000 ac) AFD



Design 1 1 1

Procurement 1 1 1

Construction 1 1 1 1 1 1 1 1 1 1 1 1


Irrigation managent strengthening and support 2 2 2 2 2 2

Agricultural Component - Yamethin and Magway II

Value chain ADB+AFD 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Seeds & mechanisation ADB+AFD 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Good Agricultural Practices AsIF 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

Mandalay Region - Package 3 sub-projects (approx 22,500 ac) ADB



Design 1 1 1

Procurement 1 1 1

Construction 1 1 1 1 1 1 1 1 1 1


Irrigation managent strengthening and support 2 2

Magway Region - Package 3 sub-projects (approx 13,000 ac) ADB



Design 1 1 1

Procurement 1 1 1

Construction 1 1 1 1 1 1 1 1 1 1


Irrigation managent strengthening and support 2 2

Agricultural Component - Yamethin and Magway II

Value chain ADB+AFD 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Seeds & mechanisation ADB+AFD 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Good Agricultural Practices AsIF 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

Water Resource Capacity and Institutional Support AsIF 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

Advance Actions

2016

Year 7

2017 2018 2019 2020 2021 2022 2023

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

7

III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Implementation Organizations: Roles and Responsibilities

16. The Ministry of Agriculture, Livestock and Irrigation (MOALI) will be the executing agency (EA). The Irrigation and Water Utilization Management Department (IWUMD) and Department of Agriculture (DOA) will be the implementing agencies (IAs).

Project implementation organizations

Management Roles and Responsibilities

Project Steering Committee Oversee project and provide policy guidance to ensure alignment with Government of Myanmar (GOM) policies and loan agreement.

Meets at least semi-annually.

Approves project annual plans in compliance with the relevant sector policy and related documents.

Endorses the annual project budget for ADB approval.

Reviews and assesses project implementation progress.

Provides advice on policy matters related to the project.

Makes final decision on subproject investments and subproject approval.

Ministry of Agriculture, Livestock and Irrigation (MOALI, Project Executing Agency)

Overall supervision and guidance on implementation of the project.

Appoint the Project Director and other key staff, and establish and supervise the Project Management Unit (PMU) comprising government employees, contractual staff, and consultants.

Coordinate project implementation activities among government agencies.

Assume overall accountability and responsibility for project planning, management, and implementation.

Submit annual audit reports to the Asian Development Bank (ADB).

Operate imprest account through PMU

Payments to contractors/consultants/suppliers through PMU

Provide timely policy support.

Department of Agriculture (DOA, Implementing Agency for output 1)

Assumes direct accountability and responsibility for implementation of output 1.

In particular, assumes responsibility for: (i) Value Chain Development including improved seed supply, extension of good agricultural practices to farmers and agribusiness support to post harvest operations and marketing; and (ii) Cross-cutting Value Chain Development Support (including establishment and support to frontline centers (FCs), support to improved input supply, development of market information system and support to value chain development.

Coordinate and collaborate with other departments within MOALI required to implement Output 1, including Department of Agricultural Research (DAR), Agricultural Mechanization Department (AMD), Department of Agricultural Land Management and Statistics (DALMS), district and township level agricultural agencies and FCs, and agricultural coordination committees (ACCs).

21

Establish and maintain the required project accounting arrangement and other implementation recording systems for the implementation of Output 1.

Prepare training material on good agricultural practices and climate smart agriculture.

21

ACCs are key governmental institutional structures at the township level. They are structural coordination bodies, drawing on all departments related to agriculture, which are responsible for the coordination of crop planning and extension activities and also make irrigation water allocation and distribution decisions. The FCs at the township level are existing structures, but will be revitalized with support from the project. They serve as subcommittees under the ACCs. The district level FCs will be established through the project.

8

Ensure environmental and social safeguards are compliant with ADB’s Safeguard Policy Statement (2009).

Develop and oversee workable input supply arrangements with the private sector.

Evaluate crop varieties identified through participatory planning and arrange for multiplication of Certified Seed through seed multiplication groups as a pilot and develop as self-financing commercial activity.

Provide the PMU with necessary inputs to quarterly project progress reports, semiannual environmental and social monitoring reports, and a project completion report.

Operate and maintain the facilities constructed or improved under the Project.

Irrigation and Water Utilization Management Department (IWUMD, Implementing Agency for Output 2)

Assumes direct accountability and responsibility for implementation of Output 2.

In particular, IWUMD assumes responsibility for (i) design, contract award, implementation, and monitoring and evaluation (M&E) of irrigation system rehabilitation works; and (ii) capacity building for scheme-level improved water management, promotion of water user groups (WUGs) and water user participation in design, and gender-inclusive training to water users on O&M, water and group management and governance.

Coordinate with other departments within MOALI required to implement Output 2, including Department of Agriculture (DOA), DRD, district and township level agricultural and water management agencies, and ACCs.

Management, operation and maintenance of irrigation infrastructure as well as planning and managing water distribution to secondary canal level.

Develop distributary level layouts and operational details.

Establish and maintain the required project accounting arrangement and other implementation recording systems for the implementation of Output 2.

Prepare an Asset Management Plan, including an asset inventory of existing systems in the project areas, with support from Project consultants.




Irrigation and Water Utilization Management Department (IWUMD, Implementing Agency for capacity building for IWRM)

Assumes direct accountability and responsibility for implementation

In particular, IWUMD assumes responsibility for (i) national and regional initiatives to address climate change and sustainable agricultural water management; (ii) strengthen land management capacity within the Project; and (iii) promote sustainable irrigation system O&M, at the system and on-farm level.

Coordinate with other departments within MOALI, including national, regional, district and township level agencies involved in water management, and ACCs.

Establish and maintain the required project accounting arrangement and other implementation recording systems




9

Project Management Unit

Establish and maintain the required project accounting arrangement and other implementation recording systems for the overall Project.

Establish a sub-unit of the PMU to act as the Agricultural Development Unit (ADU), staffed by consultants to work with DOA on Output 1.

Direct project preparation and implementation activities.

Prepare the annual work program and budget.

Oversee procurement activities, particularly bid opening, and supervise the bid evaluation process, and endorse bid evaluation reports for all international competitive bidding and national competitive bidding procurement packages.

Coordinate financial management of the implementing agencies and consolidate project accounts and financial statements.

Recruit consultants and process payments to contractors/consultants/suppliers

Operate imprest account

Prepare and submit withdrawal applications.

Establish baseline data to monitor project impacts, including regular monitoring of physical and financial progress.

Conduct financial, environmental, and social due diligence for proposed subprojects as necessary in consultation with relevant government agencies and ADB.

Assist the executing and implementing agencies in monitoring the project implementation, including periodic site inspections

Submit (i) quarterly project progress reports; (ii) semiannual environmental and social safeguards monitoring reports; (iii) annual audit reports; and (iv) a project completion report to the ADB and GOM.

Department of Agricultural Research

Assist DOA in developing multiplication of certified seed as self-financing commercial activity for Output 1.

Install and supervise field trials for crop variety evaluation.

Production of Breeder and Foundation Seed.

Assist DOA in demonstrations and on-farm trials of alternative crops, new technologies and farming techniques.

Participate in the ACCs.

Settlement and Land Records Department

Agricultural Mechanization Department

Assist DOA and IWUMD in ensuring existing cadastral maps (Kwin maps) of land uses in the project areas are updated and validated based on remote sensing/geographic information systems and field surveys.

Facilitate the provision of land use certificates for all participating households in the project areas.

Participate in the ACCs.

Implement farm mechanization activities (include vocational training).

Promote climate smart mechanization services and train farmers.

Participate in ACCs.

Agricultural Coordination Committee (ACC)

Chaired by DOA.

Responsible for crop scheduling, planning, and marketing.

Responsible for irrigation planning on all (including rehabilitated) systems, including seasonal planning on basis of reservoir storage, and reservoir operation rules.

Coordination between all related sectors.

Hold seasonal and monthly ACC meetings for irrigation management planning, coordination and supervision.

Frontline Centers (FC) Output 1:

Support ACC in irrigation planning on systems and coordinating between WUGs and ACC.

Longer term training and support to water users in sustainable operation and maintenance within tertiary units (supported by the IWUMD, DOA and NGOs).

10

Output 2:

Deliver training on good agricultural practices, including on-farm demonstrations, Farmer Field Schools and climate smart agriculture.

Introduce and deliver Farmers Field Schools.

Provide training in agricultural mechanization (with attention to training for landless and women).

Assist DOA in: o Review and evaluate value chains. o Develop and oversee workable PPP input supply

arrangements. o Develop market information system. o Coordinate agricultural demonstrations and trials at farming

household level.

Consultants Support the IWUMD by providing detailed engineering designs, bid documents and followed by supervision of construction of core sub-projects.

Support the IWUMD by providing feasibility studies of subsequent projects, bid documents, followed by design and construction supervision

Provide training to PMU, District and Township ID, ACC, water users and WUGs in irrigation and water management and assessment management.

Prepare reservoir operation rules, irrigation schedules and scheduling procedures, and train IWUMD, ACC, and WUGs in the same.

Develop and conduct farmer field schools for water users and WUGs.

Conduct training on financial management and disbursement as well as procurement

Nongovernment Organizations Support WUGs, the IWUMD and ACC in Yamethin and Magway Districts and provide a limited programme of training on: coordination with the ACC and ID as well as tertiary level irrigation planning and water management.

Provide in training to FC staff and training to the landless and women.

Support FCs and DOA in agricultural value chain analysis.

Provide services to landless and entrepreneurs.

ADB Provide financing for the project cost through an Asian Development Fund Loan.

Monitor project arrangements and progress, disbursement, procurement, consultant selection, and reporting.

Review compliance with agreed procurement procedures.

Timely review of documents that require ADB’s approval.

Review compliance with loan covenants.

Monitor compliance with safeguards procedures.

Monitor project conformity with ADB’s anti-corruption policies.

Undertake periodic review missions, including midterm review jointly, with the Government.

11

B. Key Persons Involved in Implementation

Executing Agency Ministry of Agriculture, Livestock and Irrigation

Mr. Kyaw Myint Hlaing Director General Irrigation and Water Utilization Management Department Ministry of Agriculture, Livestock and Irrigation Building No. 15, Nay Pyi Taw Myanmar Tel: + 95 67 410008

ADB

Environment, Natural Resources and Agriculture Division Southeast Asia Department

Jiangfeng Zhang Director Telephone No.: +63 2 632 6234 Email address: [email protected] Office address: 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines

Mission Leader Pavit Ramachandran

Senior Environment Specialist Telephone No.: +662 263 5300 Email address: [email protected]

12

C. Project Organization Structure

ACC = Agricultural Coordination Committee; DOA = Department of Agriculture; IWUMD = Irrigation and Water Utilization Management Department

D. Project Management Unit Structure

13

17. The staff included in the above chart are, with the exception of the Project Director, all externally recruited and do not include incremental seconded staff. The PMU will be established as a condition for withdrawal from the loan account. The PMU should comprise a project director, financial management specialist, procurement specialist, accountant, and a safeguard specialist.

E. Selection Criteria

18. The feasibility studies of core subprojects for Natmauk system in Magway district of Magway Region and Chaungmagyi system of Yamethin district of Mandalay Region, both in the CDZ have been done. A pipeline of subprojects has also been assessed and, based on preliminary analysis, nine of the 11 - including the two core subprojects, have been considered potentially viable. Given the preliminary nature of studies any subproject included in the project needs a more thorough feasibility study and it is proposed that all 11 be considered for possible inclusion, along with other possible systems in the CDZ.

19. The funds currently available are unlikely to allow more than five of the pipeline of nine subprojects to be completed and selection will be required within both short and possible long lists of irrigation subprojects. The economic analysis suggests that the irrigation projects will be much more marginal than the agricultural value chain activities and it is proposed that a viable agricultural value chain activity - and its farmer, landless and women beneficiaries - within a selected project district should not be excluded from this inclusive development project purely on the basis of technical weaknesses in the associated irrigation system.

20. The selection criteria are therefore divided into those applied to purely agricultural value chain promotion and those applied to the general model of agricultural and irrigation development combined. The selection criteria applied to all candidate projects are as follows:

(i) it shall be at least Category B in terms of environmental and social safeguards

impacts as defined in the SPS; (ii) all land acquired and used for the subproject, including for development of

tertiary canals, must be voluntarily donated; (iii) should not be covered by other ongoing or proposed projects financed by ADB or

any other development partners; (iv) there should be formal evidence of local demand for the subproject reflected in a

letter from the township administrator; (v) the beneficiaries should include sharecroppers, poor farmers, and women

farmers; and (vi) should be economically viable; and technically, socially and environmentally

feasible. The economic internal rate of return should be greater than 12%. 21. For each irrigation-related subproject the following additional criteria will be applied:

(i) the irrigation system shall have low irrigation efficiency and water productivity with scope for substantial enhancement of both irrigation efficiency and water productivity;

(ii) should involve only rehabilitation of existing systems and should not involve construction of new systems, any new supplementary structures or canals must be within existing command areas;

14

(iii) should involve rehabilitation of both primary and secondary canals to ensure that water reaches the farm;

(iv) must have a command area that is conducive to diversification to higher value crops and some evidence of actual diversified cropping, at least in the summer;

(v) should have adequate physical access roads and bridges for input suppliers and access to markets, subject to minor improvements as part of the rehabilitation program;

(vi) must have adequate water available to meet its irrigation water requirements for the proposed typical annual crop plan for the last 4 years out of 5 years;

(vii) the farmers must be willing to take O&M to ensure maintenance and management of terminal units and priority will be given to those demonstrating existing community groups; and

(viii) the coverage area of the subproject should be between 1,000 and 25,000 acres. 22. Subproject Selection Process. The process for selection of subprojects will be as follows:

(i) the PMU, in consultation with IWUMD, DOA and the relevant regional and district authorities, shall conduct a feasibility review of potential subprojects;

(ii) the PMU shall screen and rank subprojects in accordance with the selection criteria reflected in paragraphs 1 and 2 above and submit the ranking to the PSC for their consideration;

(iii) the PSC shall consider and provide necessary concurrence to the proposed subprojects prepared and recommended by the PMU; and ADB shall issue a no-objection to the selected subprojects

F. Community Participation

1. Agricultural Development

23. The project will work with value chain stakeholders, including farmers, farmer groups, private sector and chambers of commerce, in a participatory planning process to agree with value chain development plans specific to each district and township. At the early stage of the project, once the key crops are determined for analysis, a gender-focused value chain analysis will be undertaken for each crop to identify entry points for targeting activities to farmers, including landless women farmers who are often farm laborers. The project will review and evaluate these value chains in a participatory way with a view to supporting partnerships with the private sector, Chambers of Commerce, financial institutions and GOM in leveraging the weak links.

24. Extension of good agricultural practices to farmers will follow a detailed participatory assessment of existing practices and the available, appropriate and relevant good agricultural practice including, crop water management, cropping systems, climate smart agriculture (CSA), integrated pest management (IPM), rhizobia inoculum use, on-farm post-harvest operations, etc.. This will form the basis for subsequent preparation of high quality training materials, training of trainers (including the training of DOA and ID staff, demonstration plots on farmer fields, farmer field schools, farmer to farmer visits, and support mechanization.

25. The project will promote advanced information distribution systems to provide accessible information on good agricultural and farm practices; the project will support the development of a sophisticated telecommunications based Information Systems (IS) which will be accessible to

15

all key stakeholders in the value chains; a public awareness creation exercise will be undertaken to inform the public of the IS; and funds will be provided for the updating of the information database on a daily basis.

26. Frontline Centers will be established and promoted to be a “one stop shop” resource center providing information and training for farmers, landless and women in a range of on-farm and off-farm activities. They will be located at two levels at the District level and the township/irrigation system level using existing, appropriately located DOA offices, with former being a larger central hub based at the DOA District Office.

27. The Satellite Frontline Centre at the township/irrigation system level will provide key support to the communities and farmers in the system area, including enabling feedback from farmers and ensuring their participation in project activities. This will include arrangements for farmers fields schools and on-farm demonstrations on GAP, and strengthening links with contact farmers, farmer groups and WUGs, and private sector. Special attention will be given to ensuring participation by and training for the landless and for women, including on income generating activities (IGAs).

2. Irrigation Infrastructure and Management

28. Active participation by government stakeholders, local CBOs and individual water users and farmers, including a range of committees and other existing and proposed institutional arrangements is essential in planning, design, construction and management of irrigation projects is essential. At present, farmers participate in agricultural coordination committees (ACC) and subcommittees in the townships and village tracts. These arrangements will be strengthened and made more representative, and in addition, there will be an extensive program of direct consultations with farmers (including landless farmers), which will lead to formation and capacity-building of informal and subsequently formal water users’ groups (WUGs). 29. The ACC and their subcommittees do not currently have formal arrangements for participation by farmers, but the project will introduce the concepts of Participatory Irrigation Management (PIM) leading to a definition of composition, roles and responsibilities of strengthened ACCs at each level, including any new members proposed to meet the overall objectives. The importance of direct representation by farmers and other water users will be stressed and procedures for recruiting them will be agreed. 30. The project will develop effective arrangements for participation by water users in both planning and management of the irrigation systems. This will draw on regional experience with PIM but build on existing arrangements – locally known as myaunggaung –which will be analysed and developed to ensure that the interests of all farmers are represented. The project will take a cautious approach towards the development of formal water users associations, and will focus on ensuring strong participation by all categories of water users. 31. A cautious approach towards the development of formal water users associations will be promoted through the subproject. The role of myaunggaung will be analyzed and developed to ensure that the interests of all farmers are represented. This will draw on lessons learned from other projects in the region as well as in Myanmar. 32. The process will start with an information campaign to ensure that there is a general understanding by farmers and village authorities with regard to the project and its objectives to

16

improve livelihoods, undertaken through mass publicity campaigns (including village meetings, radio/television, brochures, etc). Following this, distributary canals will be identified from which pilot villages for intensive activities will be selected, and criteria will be prepared for the final selection of pilot WUGs from those interested, leading to recommendation of preferred villages to ACC for ratification. The pilot tertiary units will be used as a focus for learning for application across the selected distributary canals. 33. This will be followed by a more intensive three stage process for management strengthening (i) participatory analysis; (ii) intensive capacity building through farmer field schools and related methods; and (iii) long-term support. This is proven to be a more responsive process than the normal approach of mass training programmes for large numbers of WUGs; it will take more time and resources but ensures that the program meets local needs. Whilst women’s participation in irrigation management is important, international experience suggests that formal quotas for participation (such as requiring 30% of committee members to be women) are often counter-productive. The methods for setting up WUGs will include detailed consultation with women to ensure that the resulting WUG structure reflects their views on how irrigation should be managed. It is anticipated that their views will evolve gradually as their involvement increases. For this reason ‘gender-sensitive’ WUGs are proposed, rather than specific quotas. 34. Each stage will be facilitated by a locally-based NGO, possibly working in association with a national NGO. The role of NGOs is to ensure that advanced skills in facilitation and promoting participation are used. A team comprising a community mobiliser, agricultural specialist, water resources/irrigation specialist, and social development specialist will be brought together. Some additional specialists may be drawn from the staff of the relevant agency (IWUMD, DOA, etc) to act as resource people to the meetings; this will help strengthen relations between farmers and officials. Although many local NGOs have good skills in community mobilization, they are not familiar with large-scale irrigation or the application of participatory techniques to such projects. International technical assistance will be needed at the outset to establish the process but most of the skills required are transferrable from other sectors. Further details are given in the Supplementary Document on Irrigation Development and Management.

a. Analysis

35. The analysis stage involves a rapid assessment of the tertiary unit reviewing problems, constraints and potential solutions in the context of livelihoods, including any existing organization structure, past and current activities, and frequency and way of communication with their member farmers. The assessment aims to identify the need for strengthening and capacity-building. The assessment is estimated to take three days per unit and will result in a plan for works to be included under the infrastructure component of the sub-project as well as for actions to be taken to improve management within the tertiary unit and to improve coordination with main system management. A range of PRA techniques wi l l be used and ensure that all social groups are engaged with, including vulnerable groups such as female-headed households or landless farmers. This will use resource mapping, wealth ranking, crop calendar, gender task analysis, problem analysis, transect walks, FGDs, etc, and lead to identify interim leader or 'champion'. 36. This stage will also include a technical assessment of the extent, functionality and condition of the irrigation and drainage system in the WUG territory and its present management. This will be based on a joint inspection by water users and the ID and other ACC members. It will include a description of the existing IWUMD facilities and their

17

management in the potential WUG territory, making a map of the existing layout, preparation of an inventory of condition and functionality, identification of problems and constraints. It will also cover identification of any land implications of canal / farm ditch repair or extension if required, including any need for land swap or voluntary donation.

37. The findings will be synthesized into a simple summary report and then the analysis stage will be concluded through a facilitated community meeting, to report the results and endorse the findings including the inventory of problems and constraints to water distribution and delivery to be addressed under the infrastructure component.

38. This stage continues until the detailed design phase, but the outcomes will be reviewed immediately prior to construction as g a p s m a y e m e r g e d u e t o delay and/or unforseen changes. By the end of this stage, there should be a good understanding of rights, roles and responsibilities of WUGs, and confirmation by pilot villages of their willingness to participate in the project.

39. Although a small number tertiary units will be selected for pilot implementation of management reforms, canal walkthroughs and farmer consultations will be undertaken in all distributary canals to ensure that local knowledge and requirements are reflected in the detailed designs.

b. Capacity Building

40. The intensive capacity building stage will be undertaken at the end of the construction phase, in preparation for management of the new facilities. Subject to the construction program, some parts of the system may be complete and operational before the overall completion, and thus it is envisaged that this stage will be spread over two years. The approach proposed for this capacity building is a modified form of farmer field schools (FFS), but with a greater focus on water management and on user group strengthening than is normal practice. The inclusion of agricultural activities is valuable, for stimulating farmer interest in the program and balances the rather dry and uninteresting but still necessary topics around user group management and governance. Since the FFS runs for an entire season, typically meeting for half a day per week it enables observation and resolution of real problems as they occur. An 18 week program with rotating sessions on infrastructure management, water distribution, agriculture and user group management provides good coverage of the important issues and can interpret them in the right local historical and political context. It will be structured in a way which is convenient and accessible to women as well as to men.

41. First an inventory will be made at the regional and district levels of existing trainers, their range of training topics with respect to irrigation management, and the quality and relevance of any existing training materials for an FFS approach to capacity building. These will not cover all the topics required and where necessary, training modules and materials will be updated and new training modules and materials will be prepared. Training-of-trainers will be conducted for the updated training topics, modules and materials, and crucially in techniques for facilitation of field schools.

42. The combination of agricultural and water management activities is effective for stimulating interest and building an appreciation of the role of a user group. The FFS will be facilitated by the same NGO-led group, with participants self-identified during the analysis phase whilst ensuring broad representation. This will lead to formation of an informal group, incorporating existing myaunggaungs which could form the basis of a WUG. Decisions on the

18

structure and governance of the group and the need for registration will be taken at that stage. It is anticipated that the areas to be managed by each group will be largely as delineated in the analysis stage, but there is some scope for flexibility - particularly in the way direct outlets or minor canals are combined into potential WUGs in logical hydraulic and social units. This may take some time to be finalized during the FFS, during which the pilot WUG boundaries will be confirmed and the potential membership ratified. All farmers within the hydraulic boundary will automatically be members and have the right to select leaders and an executive committee.

43. This will still be an informal WUG until the legal framework for formalization of user groups is established, but the roles, rights and responsibilities should be agreed and a representative selected to interact with IWUMD, FC, ACC, DOA, etc. This is likely to be one of the myaunggaungs.

44. The FFS will include a range of topics related to agriculture, infrastructure maintenance, water distribution and monitoring, and user group governance. It is only at this stage that detailed arrangements for WUG governance will be confirmed, including general assembly, committee structure and representation (women, ethnic minority, other vulnerable group representation), financial arrangements, roles and responsibilities of general members and committee, relations with IWUMD and adjacent WUGs, participatory monitoring.

45. The FFS also provide an effective demonstration to other farmers. Participants should be encouraged to disseminate their learning to their neighbors, and they should put it into practice whilst ensuring equitable water distribution throughout the tertiary unit during the season that the FFS is operational. It is recommended that two FFS should be held in each selected unit, either in the monsoon and following summer season or in successive monsoon seasons. This enables topics to be covered in sufficient depth and gives enough time to learn from and build on the early findings.

c. Longer term support

46. Longer term support will be largely provided via the FCs, drawing on staff from the IWUMD and DOA, facilitated by the NGO where appropriate. This will include a limited training program to ensure sustainable O&M within tertiary units, coordinated with planned management of the main system; rational procedures for crop planning and water allocation and distribution; maintenance of the tertiary system by users; and effective coordination with the ACC.

47. The approach outlined above will be followed in the pilot tertiary units and distributary canals. A more limited capacity-building program is proposed for other tertiary units. The pilot tertiary units will serve as demonstrations for other units, and the NGO-led team will also provide a limited program of training on coordination with the ACC and IWUMD, irrigation planning, water management and maintenance at tertiary level to representatives of each distributary canal.

48. Depending on the progress with establishing informal WUAs and enabling them to take on responsibilities for the operation, maintenance and management of distributary canals, each WUA will be trained to prepare an action plan for higher level management. This will lead towards detailing its responsibilities and those of the IWUMD, defining arrangements for receiving bulk water on volumetric basis, preparing irrigation plan for the command area, managing irrigation service to its members, equitably distributing water to

19

farmers, improving on farm water application, collecting and remitting water charges to the IWUMD, and maintaining the minor canal and CAD system to design standards. It is anticipated that significant progress towards this will be achieve in a pilot area in the lifetime of the project. 49. The IWUMD will prepare guidelines and training with simple and standard formats for requisite data collection for seasonal crop planning and water demand estimation, irrigation scheduling and rotational supply to outlets, farmer crop area estimation for collecting water charges and maintenance plan (including a participatory bench marking format to integrate this with the IWUMD asset management plan). 50. Integrated Water Resources Management (IWRM). The IWRM component is focused largely on activities at a higher level than individual irrigation systems and townships. Much of the work will be undertaken in consultation with Government agencies at regional and national level, and will include studies and actions at river basin level, particularly the Samon river basin which covers several districts in Mandalay Region. 51. Despite this focus, local consultations and participation will be an important feature of the component. A similar approach will be adopted as for the irrigation component, involving facilitated meetings with water users using PRA techniques to ensure effective participation by the full range of local stakeholder groups (including, for example, women, landless, and those who may be adversely affected by water resource development). Further details are given in Supplementary Document on IWRM and Water Resource Institutional Arrangements G. Irrigation Management, Finance (including O&M) and Asset Management

1. Water Management

52. The rather crude infrastructure, and limited staff and other resources available to the IWUMD at present mean that water delivery is operated simply, with canals flowing continuously at constant flow depending on availability further upstream. Rotations are introduced when water is scarce. The situation will change after infrastructure is improved, and it will be possible to control deliveries much more precisely. The small number of IWUMD field staff will mean that water user representatives will take on a bigger role in operating new structures – for which they will need training and support. 53. The IWUMD role will become one of planning distribution and assuring delivery down to secondary canal level, and ensuring that WUGs take on their new role diligently. Simple gate structures should be well within the capacity of farmer groups to operate but they do create opportunities for abuse and theft of water. The IWUMD will retain a role in distributary canal (DY) canal management, with binthas22 advising myaunggaungs23 on operation of the new structures, but this should be an advisory role and gradually decline in importance as emergent WUGs grow in confidence, ability and trust. 54. Modernization of secondary canals provides an opportunity for a changed role in management. The modernization will be planned with the users, during which their capacity and willingness to take over management will be assessed and fostered. To facilitate the

22

Field staff of IWUMD. 23

Farmer leader of watercourse irrigation system.

20

handing over process the IWUMD will prepare a detailed layout map of the distributary canal and including the operational details such as design flow and discharge levels of canal, weirs, outlet points, channels, drains, etc. 55. IWUMD staff at Township and field levels will need training on how to manage this change in their role, and to foster a better understanding of participatory irrigation management (PIM) and the resulting changes in their procedures and processes. Improved communications with water users will also be encouraged.

2. Irrigation Finance

56. Irrigation is almost entirely financed from Union and Regional Affairs, with almost no cost recovery from agricultural water users. Responsibilities for revenue assessment and collection have changed in recent years. Before 2007, the then IWUMD assessed water use, Settlement and Land Records Department (SLRD) prepared the water tickets and General Administration Department collected the fees, but then the arrangements were changed so that IWUMD became responsible for collecting the fee and depositing this in the bank – but without the right to use the funds collected. This gave no incentive to use water efficiently or care about water losses, or even to collect the fees. As a result, there has been very low collection since then. The arrangements are currently being changed to giving the responsibility back to General Administration Department, but the fees collected will still be sent to Union Government and there will still be no direct relationship with cost recovery for O&M. Water fees are not set out in any legislation and thus their collection cannot be enforced. 57. The water tariff is very low for gravity irrigation systems and does not recover the cost of maintenance work. The water tariff for river pumping systems is higher than for gravity systems, allowing for the cost of pumping paid for directly by farmers. Actual total expenditure on ordinary maintenance and special has risen slightly in recent years and has been supplemented by much larger capital grants in 2014 and 2015. The vast majority of expenditure is on staff costs. Most of the routine maintenance requirements are for labor, but there are insufficient laborers employed by the IWUMD to carry this out in full. Thus, a greater involvement by farmers is required to ensure that secondary and tertiary canals are kept clear. 58. The IWUMD has been managing irrigation effectively for many years with little external support. It is, however, constrained in several ways. Staff numbers are very low in comparison to the need, and there are weak arrangements for sharing responsibilities with water users; staff skills are limited to traditional methods for irrigation management with little regard for concepts such as benchmarking performance, agreeing and implementing a service delivery approach, asset management. Financial resources are limited, and there is little long term planning. Annual plans are drawn up, but generally severely curtailed due to budget limitations. These weaknesses apply across the districts and townships. 59. Finance is constrained by annual government allocations from the regional budget for O&M. There is no concept of payment for service delivery, and water fees are essentially not collected. 60. Improvements to infrastructure will provide an opportunity to develop skills in management whilst the physical condition is still good. IWUMD involvement in planning and supervision will build an understanding of assets and their management. Capacity building for township and field level staff will enable them to become much more effective. Improved infrastructure with more systematic involvement by water users will reduce the pressures on

21

IWUMD field staff to operate all structures on a daily basis and enable them to focus more on higher level activities for ensuring compliance with a service delivery plan.

3. Asset Management Planning

61. There are significant opportunities for increasing agricultural production, water use efficiency and productivity of water if the IWUMD can adopt a service delivery culture. At present the IWUMD operates in a ‘top-down’ way, based too much on the cropping patterns and water allocations prescribed in the original project designs and reiterated by the ACC. Instead they should evaluate current cropping patterns and farmers’ demands, and take account of the potential for conjunctive use of surface and groundwater. They need to develop effective procedures for high levels of service delivery based on liaison, dialogue, participation, agreement and partnership with water users. 62. The primary role of the IWUMD should be to deliver an irrigation service to water users. The conventional, albeit somewhat theoretical, arrangement is for water user groups to be provided with a guaranteed supply of water by the IWUMD, for which they pay a fee with terms of service delivery and payment defined in a Service Agreement. In Myanmar where water fees are very low and there are weak arrangements for collection and management, it will be some time before this ideal situation can be reached. Even without direct payment for the service, it is possible to set out the service to be delivered with key performance indicators related to crop areas, reliability, timeliness and equity of water supply, O&M expenditure, and canal maintenance. 63. Systematic maintenance of irrigation assets is critical for the efficient operation and management, but there is not yet an effective institutionalized process for regular planning and execution of system maintenance. Maintenance works are planned in an ad hoc manner with long periods of neglect interspersed with emergency repairs. An asset management planning approach is proposed to institutionalize medium to long term maintenance of irrigation systems and thereby assure efficient and optimal operation. It needs to be undertaken on a large-scale than individual schemes, so that resources are allocated in the most appropriate manner across districts and regions. 64. Asset management planning seeks to maximize potential benefits by applying engineering and management procedures which identify the function, utility, cost, value and current condition and performance level of each asset (irrigation canals, drains, structures) and thus of the asset base as a whole. Analysis of the information on all assets leads to the development of the asset management plan. 65. A word of caution is however required. Asset management is a management tool; how it is used, and how effective it is, depends entirely on who uses it, and in what context. In the wrong context, where management is weak or lacks control over finances and budgeting, asset management will not work. What asset management can do, if used correctly, is identify infrastructural constraints to performance, and formulate plans to address them within the context of the ability and willingness of the users to pay for a specified level of service. 66. The approach will include development of an inventory of fixed assets in irrigation and drainage networks and use this as a basis for preparation of systematic five-year and annual O&M and budget plans. The steps will include: conducting asset surveys; preparing and maintaining an asset database; preparing a historical costs profile; conducting performance surveys to identify current levels of service; agreeing with the users on standards and desired

22

level of service provision; conducting an engineering survey to restore the structures to required design; formulating the asset management plan; implementing the asset management plan; and monitoring and evaluation of implementation of the AMP and service delivery. 67. It is, however, only possible to achieve this if the level of service can be measured against targets. As there are only a small number of relatively small systems, improved monitoring and benchmarking should be possible using simple techniques and without recourse to sophisticated technology. Provision for flow measurement has been included in the infrastructure component, and training will be needed to ensure that this is operated correctly and actually used to monitor and improve performance. 68. The process cannot be introduced quickly or easily, but the process of planning and implementing rehabilitation will provide an opportunity for the IWUMD to learn the process and gradually apply it. The steps involved in preparing an asset management plan include:

i. Conducting asset surveys; ii. Preparing and maintaining an asset database; iii. Preparing a historical costs profile; iv. Conducting performance surveys to identify current levels of service; v. Agreeing with the users on standards and desired level of service provision; vi. Conducting an engineering survey to restore the structures to required design; vii. Formulating the asset management plan; viii. Implementing the asset management plan; and ix. Monitoring and evaluation of implementation of the AMP and service delivery.

69. Asset Management training will focus on knowledge of asset management procedures to enhance efficiency of O&M and effectiveness of expenditure. It will include development of an inventory of fixed assets in irrigation and drainage networks and use this as a basis for preparation of systematic five-year and annual O&M and budget plans. Simple methods using standard computer software such as spreadsheets will be used for this, rather than specialized programs. 70. The project is expected to have a positive impact in reducing Government’s O&M costs in several ways, including: (i) support to formation and strengthening of WUGs to enable them to take over an increased share of the O&M burden; (ii) reduction in O&M costs as a result of canal lining and other works improvements as well as expansion of the scheme command areas; and (iii) improvement in overall management efficiency of IWUMD. In addition to these cost reduction benefits there would be an increase in tax revenue as a result of the increased agricultural production flowing to processors, traders, and exporters. 71. O&M expenses for all irrigation schemes should eventually increase in Myanmar. In 2014, IWUMD allocated about $67 million to O&M for 1.3 million ha of irrigable and 1.5 million ha of flood protection areas, which would translate into $10 per 0.4 ha. In Mandalay, in 2012, the maintenance budget for irrigated and flood protection areas was $15 per 0.4 ha. In Sagaing, it was $11 per 0.4 ha This is low under the international norms. To protect capital investments from deterioration, the O&M need to be $25-30 per 0.4 ha. The increase from $10 to $30 per 0.4 ha in O&M for total irrigation coverage in the country would cost 0.25 percent of GDP, the amount not so large to cause fiscal problems, especially if funds will be reallocated from the new construction to maintenance, given high IRR from good maintenance of irrigation.

23

IV. COSTS AND FINANCING

Table 1: Project Investment Plan ($ million)

Item Amounta

A. Base Costb

1. Effective agricultural value chains in oilseeds, pulses, and horticultural crops developed 17.65 2. Reliability of agricultural water supplies improved and irrigated area increased 47.34 3. Project management 3.92

Subtotal (A) 68.91 B. Contingencies

c 7.42

C. Financing Charges During Implementationd 2.11

Total (A+B+C) 78.44 a

Includes taxes and duties of $3.44 million financed by the government (through tax exemption). b In mid-2016 prices.

c Physical contingencies are computed as an average of 7% of base costs, based on 5% for consulting services;

10% for civil works, training and operational costs; and zero for other categories. Price contingencies are based on the manufactures unit value (MUV) index for foreign exchange costs and ADB-projected rates for local currency costs; includes provision for potential exchange rate fluctuation assuming a purchasing power parity exchange rate.

d Interest during implementation for the ADB loan has been computed at the 5-year forward London interbank

offered rate plus a spread of 1.0%. Source: Asian Development Bank estimates.

72. The government has requested a loan in various currencies equivalent to SDR 53.83 million from ADB’s Special Funds resources to help finance the project. The loan will have a 32-year term, including a grace period of 8 years, an interest rate of 1.0% per annum during the grace period and 1.5% per annum thereafter, and such other terms and conditions set forth in the loan agreement. The government will finance taxes and duties. The financing plan is in Table 2.

Table 2: Financing Plan Source Amount ($ million) Share of Total (%)

Asian Development Bank Special Funds resources (loan) 75.00 95.61

Government 3.44 4.39 Total 78.44 100.00

Source: Asian Development Bank estimates.

73. The government has also requested parallel cofinancing from AFD in an amount of €25.0 million ($27.9 million equivalent)24 to complement the project. AFD is also seeking grant support from the European Union under the Asian Investment Facility of the European Union (AsIF) of up to €20.0 million ($22.3 million equivalent) to parallel cofinance the project. AFD will administer the AsIF grant. The details are as follows: (i) The AFD loan will finance activities aligned with Outputs 1 and 2 of the project: (a)

establishment of a project-level agricultural development unit within the project management unit (PMU); (b) establishment of a district-level hub FC in Magway District; (c) establishment of satellite FCs at the irrigation system- or township-level to support ACCs; and (d) irrigation rehabilitation in Natmauk and adjoining irrigation schemes. Items (c) and (d) relate to 16,000 ha of irrigation systems in Magway District.

24

Exchange rate as of 11 October 2016: $1 = €0.8946.

24

(ii) The AsIF grant will finance national and regional initiatives to promote sustainable irrigation management through IWRM in the context of climate change. The initiatives will include (a) national and regional institutional development; (b) improved data collection and management, including a water resource inventory and water balance assessment at the basin level; (c) adoption and uptake of good agricultural practices and climate smart agriculture; (d) promotion of sustainable irrigation system management through policy support for the formation of WUGs, introduction of systematic asset management, and establishment of effective irrigation financing arrangements; and (e) development of digitized land-use maps and facilitation of land titling within project areas.

74. The Project includes a piggy-back TA for Rural Productivity and Ecosystems Services Enhanced in Central Dry Zone Forest Reserves, estimated to cost $4.79 million, which will be financed on a grant basis by the GEF and administered by ADB. This TA will improve integrated natural resources management in forest reserves and permanent public forests in the CDZ. GEF resources will be used to design and pilot-test training and capacity development packages in Mae Nyo Taung forest reserve in Meiktila District, and to scale up good practices to an additional five to seven forest reserve areas. The TA will contribute to: (i) increase water availability and improve water use efficiency in the CDZ; (ii) strengthen forest management planning, to support district level land management plan development; and (iii) address key drivers to land and forest degradation. Details are in Linked Document 6.

25

Table 4: Financing Arrangements by Output/Activity

Project Activities Project Magway District Yamethin District

Level District Natmauk

IS*

Magway IS (schemes

2-4) District Chaugmagyi

IS*

Yamethin IS (schemes

2-6)

Output 1: Agricultural Value Chains

Agricultural Development Unit AFD

Hub Frontline Centers AFD

ADB

Satellite Frontline Centers AFD ADB

ADB ADB

GAP and Climate Smart Agriculture AsIF AsIF AsIF AsIF AsIF AsIF

Output 2: Reliability of Agricultural Water Supplies

Design

ADB financed (65%) ADB

AFD financed (35%) AFD

Construction Supervision AFD ADB

ADB ADB

Irrigation System Rehabilitation (Civil works) AFD ADB

ADB ADB

Irrigation Management (Capacity building)

District Level Support AsIF

AsIF

Support to WUGs at system level AsIF AsIF

AsIF AsIF

Capacity for Integrated Water Management

(i) Sustainable water management AsIF

(ii) Land management AsIF

(iii) Sustainable irrigation system O&M AsIF

Project Management Unit ADB

Notes GAP = good agricultural practices; IS = irrigation system; O&M=operation and maintenance; WUG=water user groups; * Core irrigation systems

Legend

Asian Development Bank (ADB) Financed

ADB

Agence Française de Développement (AFD) Financed AFD

Asian Investment Facility (AsIF) Financed AsIF

26

A. Detailed Cost Estimates by Expenditure

(US$ '000)

% Base Cost Items Local Foreign Total

I. Investment Costs

A. Civil Works 31,982 12,647 44,629 65%

B. Consulting Servicesa 408 1,603 2,010 3%

C. Service Providersb 2,519 797 3,316 5%

D. Agricultural Value Chain Developmentc 10,596 3,397 13,993 20%

E. Vehicles 736 226 962 1%

F. Equipment 109 136 246 0%

G. Office materials etcd 334 78 412 1%

H. Operational costse 2,556 789 3,345 5%

Total Baseline Cost 49,239 19,674 68,913 100%

Physical Contingencies 4,528 7%

Price Contingencies 2,887 4%

Total Project Cost 76,329 111%

Interest During Implementation

2,114 2,114 3%

Total Costs to be Financed 78,443 114% a project management unit and individual consultants

b irrigation design and supervision consultants, and topographical and geotechnical surveys

c capacity building and agricultural extension activities

d includes office, support staff, supplies, and administration costs for irrigation design and project management unit

e includes incremental temporary staff, external audits, communications, value chain studies, meetings and

consultations, and public awareness programs Source: Asian Development Bank estimates

27

B. Allocation and Withdrawal of Loan Proceeds

ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS (Irrigated Agriculture Inclusive Development Project)

Number Item**

Total Amount Allocated for ADB Financing Basis for Withdrawal from the

Loan Account (USD)

Category

1. Works 47,182,000 100% of total expenditures claimed*

2. Consulting Servicesa 2,219,000 100% of total expenditures claimed*

3. Service Providersb 3,660,000 100% of total expenditures claimed*

4. Agricultural Value Chain Developmentc

15,110,000 100% of total expenditures claimed*

5. Vehicles 512,000 100% of total expenditures claimed*

6. Equipment 250,000 100% of total expenditures claimed*

7. Office Materialsd 434,000 100% of total expenditures claimed*

8. Operational Costse 3,519,000 100% of total expenditures claimed*

9. Interest Charge 2,114,000 100% of amounts due

Total 75,000,000 a project management unit and individual consultants





consultations, and public awareness programs *Exclusive of taxes and duties within the territory of the Borrower. **Subject to the conditions of withdrawals described in paragraph 6 of Schedule 3 to the Loan Agreement Source: Asian Development Bank estimates

28

C. Detailed Cost Estimates by Financier ($ ‘000)

Government ADB Total

Amount % Amount % Amount %

I. Investment Costs

A. Civil Works 2,249 5% 47,182 95% 49,431 63%

B. Consulting Servicesa 8 0% 2,219 100% 2,226 3%

C. Service Providersb 13 0% 3,660 100% 3,673 5%

D. Agricultural Value Chain Developmentc 389 3% 15,110 97% 15,499 20%

E. Vehicles 554 52% 512 48% 1,066 1%

F. Equipment 22 8% 250 92% 272 0%

G. Office materials etcd 23 5% 434 95% 456 1%

H. Operational costse 185 5% 3,520 95% 3,705 5%

Subtotal 3,443 5% 72,886 95% 76,329 97%

Interest During Implementation - 0% 2,114 100% 2,114 3%

Total Project Cost 3,443 4% 75,000 96% 78,443 100%

a project management unit and individual consultants





consultations, and public awareness programs Source: Asian Development Bank estimates

29

D. Detailed Cost Estimates by Outputs/Components

Output 1: Agricultural Value Chain Promoted

and Enhanced

Output 2: Reliability of Agricultural

Water Supplies Improved

Project Management

Total

I. Investment Costs

A. Civil Works 459 48,909 43 49,411

B. Consulting Servicesa - - 2,323 2,323

C. Service Providersb - 3,193 639 3,833

D. Agricultural Value Chain Developmentc 15,795 8 20 15,824

E. Vehicles 72 - 463 536

F. Equipment 107 5 150 262

G. Office materials etcd - 141 313 454

H. Operational costse 3,386 - 300 3,686

Total Project Costf 19,820 52,257 4,252 76,329






consultations, and public awareness programs f net of interest charges Source: Asian Development Bank estimates Source: Asian Development Bank estimates

30

E. Detailed Cost Estimates by Year ($’000)

2017 2018 2019 2020 2021 2022 2023 Total

I. Investment Costs

A. Civil Works 167 1,036 2,332 5,140 14,423 20,748 5,565 49,411

B. Consulting Servicesa 373 378 386 367 306 264 250 2,323

C. Service Providersb 734 838 1,037 299 303 308 313 3,833

D. Agricultural Value Chain Developmentc 406 1,553 3,475 3,656 3,032 2,127 1,574 15,824

E. Vehicles 477 22 37 - - - - 536

F. Equipment 122 26 44 68 1 1 1 262

G. Office materials etcd 82 83 85 65 45 46 47 454

H. Operational costse 332 498 706 542 527 560 521 3,686

Total Project Costf 2,695 4,434 8,101 10,137 18,638 24,053 8,271 76,329






consultations, and public awareness programs f net of interest charges. Source: Asian Development Bank estimates

31

F. Contract and Disbursement S-curve

Contract Awards (in USD million) Disbursements (in USD million)

Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total

2017 2.32 1.76 4.08 5.00 - 5.00

2018 - 9.50 - 9.60 19.10 0.50 1.00 1.50 0.50 3.50

2019 2.63 3.30 2.75 1.50 10.18 3.50 2.50 4.00 2.70 12.70

2020 0.75 1.50 9.70 0.30 12.25 4.00 5.00 3.75 3.00 15.75

2021 1.50 11.70 0.75 1.30 15.25 6.00 4.00 3.50 4.50 18.00

2022 1.20 2.80 2.50 0.57 7.07 3.50 2.53 2.70 3.50 12.23

2023 1.00 1.60 1.86 0.50 4.96 2.50 1.50 0.70 1.00 5.70

2024 - 1.50 0.62 2.12

Total Contract Awards

72.89 Total Disbursements

75.00

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

2017 2018 2019 2020 2021 2022 2023 2024

contract awards disbursements

32

G. Fund Flow Diagram

ADB = Asian Development Bank; Agricultural Mechanization Department (AMD); DAR = Department of Agricultural Research; DOA = Department of Agriculture; IWUMD = Irrigation and Water Utilization Management Department

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

75. A financial management assessment (FMA) was prepared during the course of the project preparatory activities undertaken during 2015. The FMA is the first such review conducted by ADB for the agricultural sector. The capacity of the IWUMD, Agricultural Mechanization Department and the DOA to manage the expenditures that are to occur under the project was assessed in accordance with ADB’s Guidelines for Financial Analysis of Projects and Financial Due Diligence Methodology Note, including use of ADB’s standard FMA Questionnaire that has been prepared in conjunction with agency staff. The focus was on the financial management capacity of the IWUMD as the main IA. The financial arrangements for the other departments within the MOALI are the same. 76. In common with other parts of the Government, the financial management practices of IWUMD are based on out dated manual systems. The need to update the systems is recognized by the Government. The necessary transformation and capacity building required throughout MOALI is part of the long term and broader program of improvement to financial

33

management in government. To manage the risks on this Project there is a need to: (i) ensure that IA staff receive training in the requirements of ADB funded projects; (ii) set up an acceptable financial management manual and train staff on its use; (iii) implement a simple computerized system for use by headquarters staff and provide excel based reporting templates to finance staff based within the implementing departments/districts; and (iv) undertake annual audit of financial statements of the project. Training on financial management and ADB disbursement procedures will be done by the consultants. Financial management risks should be considered and updated throughout the life of the Project. Risk mitigation measures should also be updated accordingly. 77. Implementation. The Project will be implemented through the utilization of a separately constituted PMU which will be responsible for procuring the simple accounting system and setting up the financial reporting processes for the project. Financial management will be supported through the use of a financial management manual which will enable the Project to be managed in line with policies and procedures that are acceptable to ADB. 78. Staff. Although there is sufficient capacity within IWUMD to undertake their current function, there is limited capacity and capability to support the requirements of Project implementation and very limited knowledge of ADB requirements and procedures. An awareness program is needed once the staff responsible for the Project has been identified by IWUMD. Training in the use of the financial management manual and basic training in the use of excel will be required at the start of Project implementation. 79. Accounting policies and procedures. MOALI and its associated departments use outdated policies and procedures. A cash-based accounting system based on practices and accounting manuals established in the 1960s is still in use. It will take some time and a coordinated approach in the Government to update its accounting policies and procedures to reflect international best practice. The Project will utilize some of the reporting processes in place within IWUMD but will supplement this in order to enable the Project to provide suitable and timely information in line with ADB requirements. This will help to demonstrate to IWUMD the benefits of improved processes and the use of computerization. 80. Accounting/Financial information system. IWUMD has very low levels of computerization, with their accounting systems entirely paper based. The Project’s accounting system will utilize a simple computerized system and serve to demonstrate the benefits of this approach. 81. Internal control systems. The structure of the finance divisions and internal control systems in IWUMD generally provide job and authorization segregation with regard to financial management, with separate sections authorizing, executing, and recording transactions. 82. Budgeting and variance management. IWUMD, Agriculture Mechanization Department (AMD) and DOA have sound budgeting formulation processes at the beginning of the year, as budgets are well prepared led in all cases by senior management, and are approved in a timely manner. Once the budgets are activated, however, the monitoring systems used appear to be weak. Variance analyses are prepared on a monthly basis, but are done in a very simplistic and comparatively ineffective manner, and these are not used as a meaningful management tool. Part of the problem is related to the lack of computerization, as without the aid of electronic processing, it is very difficult to produce meaningful and timely financial reports which can be used as a management tool. The simple computerized system to be implemented by the PMU will enable better and more meaningful analysis to be undertaken.

34

83. Safeguard over assets. IWUMD take physical inventories of stores inventories once each year. Any discrepancy identified between the physical inventory and the records is brought to the attention of the Managing Director, who takes appropriate action in accordance with government regulations. The IWUMD does not take out insurance for their assets other than for motor vehicles. 84. Internal audit. While IWUMD, AMD and DOA have a system for internal audit, the practices are ad hoc and staff have little or no training and only limited guidance, with no internal audit manual or guidelines. The focus is on the review of major transactions rather than a formally constituted annual work plan. Reports are made by exception to the Director General of the Department. The internal audit function for these departments will need to be strengthened but this will take a significant amount of time and effort. 85. External audit. The Office of the Auditor General (OAG) audits all government accounts, including IWUMD, AMD and DOA. Based on feedback from IWUMD, AMD and DOA, there was some delay in the issuance of the audit reports. OAG confirmed that the International Standards of Supreme Audit Institutions are used for all auditing by the OAG and private sector auditors in Myanmar. Although in theory, private external audit of public bodies has been approved, the legislation has yet to be enacted and in practice all external audit is undertaken by OAG.

Table 4: Timeline for Mitigation Activities

Key Risk Mitigation Activities Responsibil

ity Timeline

Accounts Department weak capacity in supporting ADB financial management requirements. No organization charts for EA/IAs’ Accounts Divisions and job descriptions are out of date and not used.

PMU established, staffed with a finance manager, an accountant and an accounts assistant with experience in computerized accounting.

Accounting staff in the other departments and district levels identified.

Establish accounting manual with organization chart and job descriptions

EA, IAs, ADB

Within 1 month after loan effectiveness

EA/IAs has limited prior experience of IFI funded projects and lack general awareness of ADB requirements across IAs

Training on ADB financial policies and procedures

Support of start-up consultants to be provided

EA, IAs, Other MOALI Departments, ADB

Prior to project start-up

Lack of full project financial management which operates across departments.

Introduction of a computerized accounting system to get accurate reports and management reports for senior management’s decision.

Training on accounting package to be provided by supplier

Implementation of a simple excel based system of vouchers and paperwork for district offices

EA, IAs, Other MOALI Departments, ADB

Within 9 months of loan effectiveness

Weak internal audit and control High value transactions will be reviewed by Departmental Internal Audit function.

OAG external audit will be undertaken on a semi-annual basis.

Suitable terms of reference for project audit, as agreed with the Office of Auditor General, Myanmar, prepared

EA, IAs, OAG, ADB

Throughout project implementation Within 9 months of loan effectiveness

ADB = Asian Development Bank; EA = Executing Agency; IAs = Implementing Agencies; MOALI = Ministry of Agriculture, Livestock and Irrigation; OAG = Office of the Auditor General

35

Implementation Plan for Financial Management Key Mitigation Actions

B. Disbursement

86. The loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2015, as amended from time to time), and detailed arrangements agreed upon between the government and ADB. Online training for project staff on disbursement policies and procedures is available.25 Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control. 87. Disbursements for the loan will use direct payment and imprest fund procedures with liquidation and replenishment, as appropriate. Direct payment requests will be certified by the PMU Project Director based on the payment terms in the contracts. The PMU will be responsible for (i) preparing disbursement projections and its timely submission to MOALI; (ii) requesting budgetary allocations for counterpart funds; (iii) collecting and retaining supporting documents and making these available for audit purposes; and (iv) preparing and sending withdrawal applications to ADB. 88. Imprest fund procedure. MOALI will establish and maintain an imprest account in US dollar for the ADB loan. The imprest account is to be used exclusively for ADB’s share of eligible expenditures. MOALI will be accountable and responsible for the proper use of advances to the imprest account including advances to the sub-accounts.

25

Disbursement eLearning. http://wpqr4.adb.org/disbursement_elearning

2016 2017 2023

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Dec

Establishment of the PMU: condition for withdrawal from loan account.

MOALI submits list to ADB

ADB reviews and approves withdrawal from loan account

Accounting staff in the other departments and district levels identified by MOALI

Establish accounting manual with organization chart and job descriptions

Training on ADB financial policies and procedures

PPTA consultants provide the training to MOALI (EA and IAs) in coordination with ADB

Loan consultants to provide support

Introduction of a computerized accounting systems

Procurement of the accounting systems by MOALI (supported by PPTA consultants)

Training on the accounting package by the supplier

Implementation of a simple excel based system for district offices

Creation of excel based system (supported by PPTA consultants)

Loan consultants to provide support

Suitable terms of reference for project audit, as agreed with OAG, Myanmar

Preparation of TOR (supported by PPTA consultants)

Consultation/agreement with OAG, Myanmar

Key staff shall include: project director, financial management specialist, procurement

Training for district offices on use of the simple excel based system (supported by

Project Readiness support to familiarize MOALI with ADB financial procedures

and requirements

ADB to recruit financial management specialists to provide orientation and help set up

systems within PMU

MYRM to provide customized training for MOALI along with project readiness

consultants

MOALI will revisit and update, if necessary, the accounting manual prepared during

PPTA stage with support of PPTA consultants

http://wpqr4.adb.org/disbursement_elearning

36

89. The total outstanding advance to the imprest account should not exceed the estimate of ADB’s share of expenditures to be paid through the imprest account for the forthcoming 6 months. MOALI may request for initial and additional advances to the imprest account based on an Estimate of Expenditure Sheet26 setting out the estimated expenditures to be financed through the account for the forthcoming 6 months. Supporting documents should be submitted to ADB or retained by MOALI in accordance with ADB’s Loan Disbursement Handbook (2015, as amended from time to time) when liquidating or replenishing the imprest account.

90. A series of sub-accounts will be opened for the implementing agencies at national level with further sub-accounts run by the Departments at regional/district level. Sub-accounts have been identified for all departments (i.e. IWUMD, DOA, Settlement and Land Registry Department, Agricultural Mechanization Department and Department of Agricultural Research) that may need to take part in the implementation of the project. It is expected that majority of the expenditure will be incurred either through direct payments or through the sub-accounts of IWUMD and DOA. Other department sub-accounts will only be operated to the extent that there is sufficient need to justify delegating specific budgets to these departments. The sub-accounts are to be used exclusively for ADB’s share of eligible expenditures. MOALI should ensure that every liquidation and replenishment of each sub-account is supported by sufficient documentation in accordance with ADB’s Loan Disbursement Handbook (2015, as amended from time to time). 91. Statement of expenditure (SOE) procedure.27 Reimbursements and replenishment of advances to the imprest account will be based on full documentation for eligible expenditures during the first year of project implementation. Thereafter, the SOE procedure may be used for reimbursement of eligible expenditures or liquidation of advances to the imprest account after one year of project implementation. The ceiling of the SOE procedure is the equivalent of $50,000 per individual payment. Supporting documents and records for the expenditures claimed under the SOE should be maintained and made readily available for review by ADB's disbursement and review missions, upon ADB's request for submission of supporting documents on a sampling basis, and for independent audit. Reimbursement and liquidation of individual payments in excess of the SOE ceiling should be supported by full documentation when submitting the withdrawal application to ADB. 92. Before the submission of the first withdrawal application, the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the Government, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is US$100,000 equivalent. Individual payments below this amount should be paid (i) by the EA or IAs and subsequently claimed to ADB through reimbursement, or (ii) through the imprest fund procedure, unless otherwise accepted by ADB.

C. Accounting

93. The MOALI will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the project by adopting the International Public Sector Accounting Standard for cash based accounting. The MOALI will prepare consolidated

26

ADB. 2015. Loan Disbursement Handbook. 10B. 27

SOE forms are available in Appendix 9B and 9C of ADB’s Loan Disbursement Handbook (2015, as amended from time to time).

37

project financial statements in accordance with the government's accounting laws and regulations which are consistent with international accounting principles and practices. D. Auditing and Public Disclosure

94. MOALI will cause the detailed project financial statements to be audited in accordance with International Standards on Auditing by an independent auditor acceptable to ADB. The audited project financial statements together with the auditor’s opinion will be submitted in the English language to ADB within six months from the end of the fiscal year by MOALI. 95. The annual audit report for the project accounts will include an audit management letter and audit opinions, which cover (i) whether the project financial statements present a true and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting framework; (ii) whether the loan and grant proceeds were used only for the purposes of the project or not; and (iii) whether the borrower or EA was in compliance with the financial covenants contained in the legal agreements. 96. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor. 97. The government, MOALI, IWUMD, and DOA have been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements.28 ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the borrower), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. 98. Public disclosure of the audited project financial statements, including the audit report on the project financial statements, will be guided by ADB’s Public Communications Policy (2011).29 After the review, ADB will disclose the audited project financial statements and the opinion of the auditors on the project financial statements no later than 14 days of ADB’s confirmation of their acceptability by posting them on ADB’s website. The management letter, additional auditor’s opinions, and audited entity financial statements will not be disclosed.30 28

ADB’s approach and procedures regarding delayed submission of audited project financial statements: (i) When audited project financial statements are not received by the due date, ADB will write to the executing agency

advising that (a) the audit documents are overdue; and (b) if they are not received within the next 6 months, requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed.

(ii) When audited project financial statements are not received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (a) inform the executing agency of ADB’s actions; and (b) advise that the loan may be suspended if the audit documents are not received within the next 6 months.

(iii) When audited project financial statements are not received within 12 months after the due date, ADB may suspend the loan.

29 Public Communications Policy: http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications

30 This type of information would generally fall under public communications policy exceptions to disclosure. ADB. 2011. Public Communications Policy. Paragraph 97(iv) and/or 97(v).

http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications

38

VI. PROCUREMENT AND CONSULTING SERVICES

99. All procurement of works, goods, equipment and services financed by ADB will be undertaken strictly in accordance with ADB’s Procurement Guidelines (2015, as amended time to time) and ADB’s Guidelines on use of Consultants (2013, as amended time to time). A. Advance Contracting

100. All advance contracting will be undertaken in conformity with ADB’s Procurement Guidelines (2015, as amended from time to time) (ADB’s Procurement Guidelines)31 and ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).32 The issuance of invitations to bid under advance contracting will be subject to ADB approval. The borrower and MOALI, have been advised that approval of advance contracting does not commit ADB to finance the Project.

101. Advance contracting. The project envisages advance contracting for the recruitment of one Project Management Unit package and one Irrigation Design package, to provide support to the MOALI. Procurement and recruitment procedures for these packages will be in accordance with the procurement plan. B. Procurement of Goods, Works and Consulting Services

102. All procurement financed by ADB will be undertaken in conformity with ADB’s Procurement Guidelines (April 2015, as amended from time to time). All procurement financed or administered by AFD will be undertaken in conformity with AFD’s prevailing procurement procedures. 103. Recognizing that the scale and timing of civil works for irrigation system development must take into account the seasonal nature of farming operations, MOALI requested that national competitive bidding (NCB) be used for smaller contract packages for new and rehabilitation works. It was agreed that contract packages would be optimally sized to attract suitably qualified bidders and to facilitate contract management and project supervision. 104. For ADB-financed procurement, the following will apply :

(i) International competitive bidding (ICB) will be used for ADB-financed procurement of civil works packages with value of $3.0 million and above.

(ii) The ceiling for NCB for ADB-financed civil works is proposed at $2,999,999 million, with the first three packages requiring prior review by ADB. In all cases, NCB packages larger than $2.0 million will also require prior review by ADB. The limit for NCB procurement for goods and services will be from $100,000 up to $500,000.

(iii) Subject to the successful establishment of WUGs into legally and economically constituted associations, construction of tertiary canals and simple structures may be implemented by WUGs using ADB’s procedures for community participation in procurement (by direct contract). This method will generally be more cost-efficient and effective than constructing such minor works using

31

Available at: http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf 32

Available at: http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf

http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf

http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf

39

outside contractors. It will also provide valuable experience for subsequent O&M and inject much-needed cash into the local economy.

105. For AFD and AsIF-financed procurement, the details will be separately discussed and agreed between the Government and AFD during further processing of the AFD loan. 106. Consulting Services: All engagement of consultants under ADB financing will be undertaken in conformity with ADB’s Guidelines on the Use of Consultants (April 2013, as amended from time to time). All consulting services financed or administered by AFD will be undertaken in conformity with AFD’s prevailing procedures. 107. Under ADB financing, three international consulting packages will be procured under quality and cost based selection (QCBS, 80:20) as follows:

(i) The Project Management Unit package will require approximately 39 person months of international and 1,136 person months of national consulting inputs for overall project management, finance and procurement (short-term and long term specialists), social and environmental safeguards, monitoring and evaluation (M&E) and incremental and support staff. These consultants will be engaged by the EA at an estimated cost of $2.323 million.

(ii) The Output 2 Irrigation Design package for ADB-financed systems will require approximately 56 person months of international and 90 person months of national consulting inputs in the fields of irrigation engineering and management, hydrology, design of hydraulic structures, contract document preparation. These consultants will be engaged by the EA at an estimated cost of $1.756 million.

(iii) The Output 2 Irrigation Supervision package for ADB-financed systems will require approximately 35 person months of international and 241 person months of national consulting inputs in project management and supervision, materials/quality control, and related fields. These consultants will be engaged by the EA at an estimated cost of $1.437 million.

108. Under AFD loan and EU-AsIF grant financing, three international consulting packages will be as follows:

(i) The Output 1 Agricultural Development Unit package will require approximately 110 person months of international and 8 person months of national consulting inputs for inputs in the fields of value chain development, seed multiplication, agronomy/good agricultural practices, agribusiness development, agricultural training of trainers, public private partnerships, legal advice, information systems and related fields. NGOs and private sector organizations will also be subcontracted under this contract to deliver a range of specific services.

(ii) The Output 2 Irrigation Design and Supervision package (for AFD-financed Natmauk Irrigation System) will require approximately 25 person months of international and 167 person months of national consulting inputs in the fields of irrigation engineering and management, hydrology, design of hydraulic structures, contract document preparation, project management and supervision, materials/quality control, and related fields.

(iii) The Output 2 Irrigation Development consultants to promote improved irrigation management and capacity building of IWUMD and the ACCs, including

40

asset management, reservoir operations, agricultural planning, irrigation scheduling and performance monitoring, develop farmer-led management arrangements, ensure active participation by water users into the design of infrastructure; training to water users and WUGs on O&M, and coordinate closely with Output 1 agricultural activities. NGOs may also be subcontracted under this contract to deliver a range of specific services.

109. The Project also includes provision for the engagement of individually recruited international and national consultants for technical and management inputs as needed throughout the duration of the implementation period. C. Procurement Plan

110. The procurement plan for the Project indicating the first 18-month is in Annex 1. D. Consultant's Terms of Reference

111. The consultants’ terms of reference is given in Annex 2.

VII. SAFEGUARDS

A. Environment

112. Environmental Impact Assessment. The Project was classified as Category B according to ADB’s 2009 Safeguard Policy Statement (SPS), and confirmed by the PPTA. An Environmental Assessment Review Framework (EARF) has been prepared to cover the entire project area and an Initial Environment Examination (IEE) has been prepared for the two core subprojects (Chaungmagyi and Natmauk). The IEE has been developed in compliance with the SPS and uploaded to the ADB website. The IEE summarizes the due diligence review of project associated facilities and provides a mitigation and monitoring program for identified minor impacts in design, construction and operation phases. Myanmar has yet to finalize environmental assessment procedures at the Ministry of Environmental Conservation and Forestry (MOECAF) as verified with a meeting with Environmental Conservation Department. 113. Environmental Assessment Review Framework. The EARF describes screening and review of future subprojects under the Project, and additional IEEs may be required. Proposed Environmental Conservation Department procedures will also be followed on future subprojects if they are in place at that time. 114. Environmental Management Plan. The environmental management plan (EMP) for the core subprojects defines mitigation and monitoring measures and describes the institutions, responsibilities and mechanisms to monitor and ensure compliance. Such institutions and mechanisms will seek to ensure continuous improvement of environmental protection activities during preconstruction, construction, and operation of the project in order to prevent, reduce, or mitigate adverse impacts. The EMP will be reviewed and updated if there are any changes during the detailed design. 115. Project benefits. The IEE identifies positive project impacts on food security, household income, health conditions, rural employment; and flood control. It should have multiplier effects on local economic development and water governance. In some isolated cases, leakage from irrigation systems can also assist with supplying water to local shallow well systems. Social,

41

environmental, poverty and gender benefits are also presented. 116. Potential impacts. The potential impacts (positive and negative) and risks were screened during the IEE process in order to (i) identify the relative significance of potential impacts from the activities of the proposed infrastructure; (ii) establish the scope of the assessment which assists in focusing on major, critical, and specific impacts; and (iii) enable flexibility in regard to consideration of new issues, such as those reflecting the requirements of both the Myanmar’s environmental laws, regulations and standards, and ADB’s SPS (2009). The major anticipated impacts caused by the infrastructure subcomponents for the Project during construction phase include: potential permanent and temporary acquisition of land and involuntary resettlement (unlikely but needs confirmation during detailed design); noise and air pollution (mainly fugitive dust); wastewater discharge, soil erosion; spoil and solid waste disposal; interference with traffic and municipal services, and occupational and community health and safety. These impacts can extend to project borrow pits and material disposal sites. The major potential impacts of the infrastructure component for the Project during operation phase are minimal and may include soil erosion, waterlogging and potential salinization due to insufficient drainage systems, potential water quality, soil quality and health impacts of overuse of fertilizers and pesticides, canal sedimentation, and safety issues. 117. Consultation. The public consultation indicated that the majority of the potential affected persons supported the Project and Project components and believed they would benefit the local economy, raise residents’ living quality, improve local environmental conditions, and effectively protect the local environment. The public will be informed about the Project components during detailed design and prior to construction and be given an opportunity to comment again on the Projects. In compliance with ADB’s 2009 SPS, environmental information related to the Project was and/or will be disclosed as follows: (i) this IEE is disclosed on ADB’s project website (www.adb.org), and is available for consultation in the PMU’s office; and (ii) and annual reports on project’s compliance with the EMP will be available at www.adb.org. 118. Grievance Redress Mechanism. Environment safeguards related complaints or disputes will be handled in accordance with the grievance redress mechanism (GRM) established for the project. The PMU will coordinate the environment GRM, with support of the Loan Implementation Environment Consultant and a Public Complaints Unit (PCU) established by the IAs within the PMU at the state and regional level. The GRM is defined in the IEE and requirements shown in EMP. 119. Future Subprojects. The EARF prepared for the Project will guide the initial environmental reviews and Rapid Environmental Assessments of future subprojects under the Project. Additional IEEs may be required. 120. Conclusions. The Project IEE concludes that as long as the environmental mitigation and management measures defined in the EMP are properly implemented, all adverse environmental impacts associated with the project will be prevented, eliminated, or minimized to an acceptable level. The Project is feasible from an environment safeguards point of view. The public consultation indicated that the majority of the potential affected persons supported the Project and Project components and believed they would benefit the local economy, raise residents’ living quality, improve local environmental conditions, and effectively protect the local environment. The overall findings of the Project IEE are that some negative impacts on air, water, soil and acoustic environment are expected, in both construction and operation phases. Any adverse environmental impacts and risks associated with the project can be prevented, eliminated, or minimized to an acceptable level, if all the mitigation measures and monitoring

42

requirements defined in the EMP are strictly implemented during detailed design, construction and operation, and the environmental management and institutional capacities of the IAs are strengthened through implementation of the comprehensive training and capacity building program. B. Land Acquisition

121. Safeguard Assessment. The Project was reclassified as Category B according to ADB’s 2009 SPS and by the PPTA for involuntary resettlement. A Resettlement and Ethnic Groups Framework (REGF) has been prepared to cover the entire project area and resettlement checklists and social safeguard due diligence reports have been prepared for one core subproject (Chaungmagyi). The REGF has been developed in compliance with the SPS and will be uploaded to the ADB website. Preliminary (feasibility-level) designs for typical canals and structures for Chaungmagyi have been developed and all civil works are expected to be within the canal right of way; however, given the size of the irrigation system, the particular canals that will be covered by civil works are not yet known and will be selected through a participatory process with the beneficiary/affected communities during implementation. Thus, the exact locations are unknown for where land may be required for the core subproject interventions and will only be known during sub-project implementation at the time of detailed design. During detailed design, land acquisition requirements will be integrated into decisions about working sites. All land acquisition and resettlement impacts will be addressed in line with the Project policy as described in the resettlement and ethnic groups framework and in compliance with the ADB SPS (2009). 122. Resettlement and Ethnic Groups Framework. The REGF provides guidance on screening and categorizing land acquisition activities, including the completion of a resettlement checklist and due diligence report or resettlement plan/resettlement and ethnic group plan as required, and on monitoring compliance with project safeguards in accordance with ADB’s 2009 SPS. Future subprojects will be implemented according to the REGF for the treatment of land acquisition impacts. 123. Resettlement Checklists and REGF Due Diligence Reports. The checklists and social safeguard due diligence reports for one core subproject has been completed and can be used as a sample for future subprojects. These documents provide compliance with ADB’s SPS. The REGF provides guidance for future preparation of resettlement plans and/or resettlement and ethnic group plans, as necessary. 124. Grievance Redress Mechanism. Social safeguard related complaints or disputes will be handled in accordance with the grievance redress mechanism (GRM) established for the project. The PMU will coordinate the GRM and establish a PCU. The Loan Implementation Social Consultant will supervise its establishment and advice on safeguard related grievances. The Gender and Social Specialist will be responsible for the day to day PCU activities: maintaining the grievance register, organizing investigations, acknowledging and communicating results to the affected person, and monitoring for the closing out of the issue. The GRM is defined in the REGF. 125. Future Subprojects. The REGF prepared for the project will guide screening and monitoring of land acquisition for future subprojects under the Project and for preparation of resettlement plans and/or resettlement and ethnic group plans, as necessary. Additional due diligence reports (for sub-projects without land acquisition and resettlement, or ethnic group impacts) and monitoring will be required.

43

126. Conclusions. Project involuntary resettlement (IR) impacts are expected to be minimal, and there will be no relocation. C. Ethnic Groups

127. Safeguard Assessment. The Project is classified as Category B according to ADB’s 2009 SPS and by the PPTA.. There are 11 pipeline candidate projects of which two have the potential to have ethnic groups in their project area. It is uncertain that the two will be implemented in the future. A REGF has been prepared to cover the entire project area and ethnic group screening checklists and a safeguard due diligence reports has been prepared for one core subproject (Chaungmagyi). The REGF has been developed in compliance with the SPS and will be uploaded to the ADB website. Due diligence was undertaken for the selected core subproject during feasibility studies and confirmed that no ethnic groups are present in their project areas and that the SPS policy related to indigenous peoples is not triggered. 128. Resettlement and Ethnic Groups Framework. The REGF provides guidance on screening and categorizing subprojects for ethnic group impacts. If ethnic groups that meet ADB’s SPS definition are identified as being present in a subproject area, then an ethnic group plan will be produced. 129. Ethnic Group Checklists and REGF Due Diligence Reports. The screening checklists and social safeguard due diligence reports for the core subproject has been completed and can be used as a sample for future subprojects. These documents provide compliance with ADB’s SPS. 130. Grievance Redress Mechanism. Social safeguard related complaints or disputes will be handled in accordance with the GRM established for the project. The PMU will coordinate the GRM and establish a PCU. The Loan Implementation Social Consultant will supervise its establishment and advice on safeguard related grievances. The Gender and Social Specialist will be responsible for the day to day PCU activities: maintaining the grievance register, organizing investigations, acknowledging and communicating results to the affected person, and monitoring for the closing out of the issue. The GRM is defined in the REGF. 131. Future Subprojects. The REGF prepared for the project will guide screening and categorization of ethnic group impacts for future subprojects under the Project. Additional checklists will need to be completed. If it is determined that ethnic groups are present, an ethnic group plan or resettlement and ethnic group plan, as required, will be produced following the guidance provided in the REGF. Mitigation and beneficial measures for ethnic groups beyond resettlement impacts/issues will also be identified in these plans.. 132. Conclusions. The Project has no current impacts on ethnic groups as ascertained in the core subproject area. There are procedures to screen and manage any potential ethnic group impacts in future subprojects.

VIII. GENDER AND SOCIAL DIMENSIONS

133. Women play an important role in agriculture in the project communities and are important contributors to family income. Socioeconomic surveys during project preparation show that the occupational profile of women is similar to that of men, with most working in agriculture and in petty business, as artisans, and in service and home business. Households headed by

44

women and women from landless families are more vulnerable, and many struggle for livelihood options. The gender analysis shows that women and men share many farm activities, as well as off-farm work. Women tend to have responsibility for household work and childrearing, and are less likely than men to participate in community meetings. However, due to scarcity of irrigation water and other factors, agricultural laboring works are not available all around the year so both men and women migrate within and outside the country but women remain responsible for all tasks in their stereotypical reproductive role. 134. Water user associations have been nominally established in some locations but they are not active, with irrigation still being managed entirely through traditional arrangements which is by men and takes little account of the particular needs of women such as constraints on irrigating at night, or labor shortages in female-headed households for managing water or maintaining canals. Other gender issues including women’s lack of complete information, education, experience and ability to follow bureaucratic processes makes them less active in committees and in decision making processes. However, the role of women in agriculture is important and their involvement with O&M of irrigation must be increased to ensure that it is responsive to their needs. The Project will implement a comprehensive set of gender measures that are set out in the Gender Action Plan (GAP), with key elements summarized below. 135. For irrigation infrastructure and management development (i) women will comprise 40% of total participants in consultations on irrigation system design, planning and implementation; (ii) women will be consulted separately to assess their prioritized needs for related to location, alignment and access to irrigation infrastructure; (iii) unskilled workforce will include at least 30% women as laborers in construction work, with equal pay for men and women for work of equal value, access to water and sanitation facilities for women at all construction sites, and occupational safety measures and training for all laborers; (iv) formal committees will contain at least 30% women, and female involvement in strengthened traditional informal arrangements will be encouraged by appointing deputy myaunggaungs which will lead to formation of WUGs and later water user associations; (v) 30% participants in all training will be women and the training schedule and venue will be suitable for men and women farmers; and (vi) gender awareness training will be provided to WUG members, IWUMD and DOA extension service staff, farmers, NGO staff and other implementing agency staff, and gender awareness will be included in all training programs as a cross cutting issue. 136. For agricultural development component (i) at least 30% women’s participation in any kind of community consultation regarding information dissemination and decision making; (ii) separate women farmers’ meetings will be held to identify their constraints and assess their prioritized needs related to enhancing productivity, access to quality input, training, marketing and alternative income generating activities; (iii) common interest groups will include at least 30% women and will receive training; (iv) extension services trials and demonstrations, and farmer field schools will be organized for participants including at least 30% women farmers, ensuring a proper assessment of their prioritized needs; (v) relevant common interest groups will include at least 30% landless women entrepreneurs and women entrepreneurs’ technical needs and trainings will be assessed; (vi) at least 50% landless women-headed households among total households will receive support for alternative income generating activities; (vii) farmers interest groups will be created where 50% members will be women in pilot areas; (viii) provide a gender-sensitive participatory training to all MOALI, Project Management Office and NGO staff to deliver the technical trainings more efficiently considering gender sensitivity and implementation of Project GAP; and (ix) women will comprise 30% participants in all Project supported technical trainings and water management.

45

137. Gender and social dimensions monitoring: One gender and community development expert will be employed to monitor the progress of GAP and report on a quarterly basis indicating progress and constraints. Gender-disaggregated indicators will be established for the project performance management system (PPMS), on the basis of the GAP, and monitored to ensure activities are effectively carried out and targets reached. The midterm review for the Project will be an opportunity to review targets and specific gender actions against overall Project progress and target achievement. The social and gender development specialist will also support and coach the core staff of the PMU who will ultimately be responsible for implementing the gender policies. He/She will ensure that gender issues are incorporated in all training modules. All Project data on staffing and recruitment, participation, consultation, wages, training, safeguards implementation and compensation, and impacts will be gender-disaggregated. The quarterly progress reports submitted to ADB shall include the GAP implementation progress matrix.

46

Table 5: Gender Action Plan

Activity Indicators/Targets

33 34

35

Resp

Output 1: Agricultural Value Chains in Oilseeds, Pulses and Horticultural Crops Promoted and Enhanced

1.1 1.2 1.3 1.4 1.5

Arrange community consultation in targeted service areas and information dissemination about the services, information, and trainings for farmers that will be provided by the FCs at irrigation system and at district levels. Construction of FCs in irrigation system and District level. Formation of an elected governing board to operate FCs (representing all socio-economic categories of the rural population as well as MOALI representation). Selection of extension officers to manage the FC and mobilize the services required; they will receive equipment (mobile phone running costs, motor cycles and operating cost, and field allowances). Undertake value chain analysis for farming households focusing on constraints of access to improved inputs and sustainable markets, opportunities, training needs of farming households. Formation of CIG with farming households and selection of 2-3 members as leaders who will receive training and share information with other members.

At least 40% women’s participation in any kind of community consultation regarding information dissemination and decision making. Separate women farmers’ meetings will be held to identify their constraints and assess their prioritized needs related to enhancing productivity, access to quality input, training, marketing, and alternative IGA. Each FC will include provision for child care facility and will be identified during training. At least 20% women will be member of the governing board from all socio-economic categories of the rural population as well as from MOALI representation. 25% women extension officers will be selected for FC management and will receive equipment support. At least 50% participants included in the value chain analysis process will be women and women headed farming households.

DOA, PMO, NGO

33

The targets reflect equity consideration as well as on-ground realities taking into account the country gender assessment and feasibility study surveys, in Nautmauk and Chaungmagyi (the two core subprojects).

34 Feasibility surveys revealed approximately 20% of women currently participate in irrigation management where participatory arrangements are present. The compositions of myaunggaungs are currently all male and the targets are accordingly calibrated.

35 Formation of water users groups and value chain analyses will be initiated through the project and the targets are commensura te with women’s current participation in agricultural activities.

47

Activity Indicators/Targets33

34

35

Resp

1.6 1.7 1.8 1.9 1.10 1.11 1.12

Arrange demonstrations and trials on improved crop varieties on farmers’ field based on need assessment of the farming households. Formation of FFS Common activity groups of landless entrepreneurs and identify their technical needs and create links with vocational training institutes, provide business management training, support the elaboration of business plan, market studies, and loan applications; undertake simple value chain analysis and marketing studies, and foster linkages with other stakeholders Arrange alternative IGA for the landless and women. Provide technical training to local farmers on support to post harvest operations and marketing including provision of advice on possibilities of contract farming ventures with smallholder farmer groups and cooperatives. Provide intensive skill development Training for MOALI staff (particularly the frontline extension officers who are the village managers to be more oriented towards farmers’ problems) to improve their skills and participatory methods to deliver services responsive to the priorities of small farmers. Provide training to farmers and private sector entities on seed multiplication procedures, quality control, and storage techniques including training trainers.

At least 30% women will be member of all CIGs. Extension services trials and demonstrations will be organized at least 30% women farmers field with the proper assessment of their prioritized needs. At least 30% women farmers will be participants in FFS. At least 30% landless women entrepreneurs will be members of common activity group and women entrepreneurs ’technical needs and trainings will be assessed. At least 50% landless women households among total landless households will receive support for alternative IGA. Farmers’ interest groups will be created where 50% members will be women in pilot areas. Provide a gender sensitive participatory training to all MOALI, PMO, and NGO staff to deliver the technical trainings more efficiently considering gender sensitivity and implementation of project GAP. Women will comprise 30% participants in all project supported technical trainings and water management. Trainings should be scheduled at times suitable for women and men farmers and suitable for their level of literacy. Trainings will be given in the local language of the participants.

Output 2: Reliability of Agricultural Water Supplies Improved

48


34

35

Resp

2.1 2.2 2.3 2.4 2.5

Irrigation Infrastructure Irrigation planning and design will be undertaken on a consultative basis, with women specifically included in all discussions. Inform local farmers including WUG where irrigation construction work will take place and encourage their participation in construction. Carry out motivational session/meeting/gathering for information on the types of employment available; timeframes and pay rate; the modality of applying for the work where women directly and indirectly will get preference for project work. Integrate sectoral gender issues in foundation training for construction and maintenance work where applicable; occupational safety measures and training provided to all workers. Include relevant specifications in the bidding documents on core labor standards (equal pay for work of equal value, occupational health and safety, water supply, sanitation, segregated shelter and facilities, and no child labor will be employed) and monitor their implementation. Orient all PMO/field level staff on gender aspects of core labor standards and their roles in monitoring and orient all contractors on gender-related aspects of CLS. Employ women as unskilled and semi-skilled laborers in earth work, construction and maintenance work. Irrigation Management

Women will comprise at least 40% of total participants in consultations related to decision-making on irrigation system planning, design and implementation. Separate women farmers’ meetings will be held to assess their prioritized needs related to location, alignment, and access to irrigation infrastructure. Training to local women and men on unskilled jobs related to construction. At least 75% unskilled job opportunities on canal, drainage, cart bridges, access roads to dam construction/rehabilitation and maintenance will be for local people. All PMO/field staff aware of gender aspects of CLS and monitor implementation. Sign agreement with the construction contractors to employ local men and women. At least 30% women will be recruited as unskilled laborer in construction work with equal pay for men and women for work of equal value and have access to water and sanitation facilities for women at all construction sites and all laborers receive occupational safety measures and training.

IWUMD, PMO, NGO

49


34

35

Resp

2.6 2.7 2.8

Formation of WUG (informal) at outlet/tertiary unit level. Formation of WUA (a long term objective, this will take time and the precise structure will be developed through testing in pilot areas) at distributary canal and eventually some form of representative general assembly and a small executive committee for day to day activities. ACC at Township level mostly government staff and farmer representative for coordination between farmers/WUG and government.

All households, including female-headed, will be in WUGs. Female assistant myaunggaungs appointed in at least 30% of informal groups. Provide training on irrigation management and other capacity building to all farmers and myaunggaungs, with at least 30% participants being women in all trainings. Where formal groups are established, at least 30% of the members of the executive committee will be women. Provide gender awareness training to ACC and IWUMD staff and gender issue should be integrated in all training programs as a cross cutting issue.

ACC=Agricultural coordination committee, CIG=Common interest group, CLS= Core labor standards, DOA=Department of Agriculture, FC=Frontline center, FFS=Farmer’s field school, GAP=Gender action plan, IGA=Income generating activities, IWUMD= Irrigation and Water Utilization Management Department, MOALI=Ministry of Agriculture, Livestock and Irrigation , NGO=non-government organization, O&M=Operations and Maintenance, PMO=Project management office, WUA=Water user association, WUG=Water user group.

50

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND

COMMUNICATION

A. Project Design and Monitoring Framework

138. The design and monitoring framework (DMF) for the project is in Annex 3. B. Monitoring

1. Project performance monitoring

139. To monitor the progress of the project in achieving the planned outcome and outputs, the PMU will establish and maintain a PPMS, which will be designed to accommodate the projects sector-like character regarding project design, schedules, activities, and development impacts. The PPMS will cover: (i) project physical and financial progress; (ii) agricultural production in terms of cropping intensity, pattern, yields and margins; (iii) on and off-farm employment impact; (iv) implementation of environment safeguards and environmental management plan; (v) social safeguards and GAP; and (vi) compliance with loan covenants (policy, financial, economic, sector, and others). 140. Disaggregated baseline data for output and outcome indicators will be updated and reported quarterly through quarterly project progress reports and after each ADB review mission. These quarterly progress reports will provide information necessary to update ADB’s PPMS. At the start of Project implementation, the PMU and IAs will develop integrated PPMS procedures to generate data systematically on the inputs and outputs, as well as the indicators to be used to measure the Project’s impact and outcome taking into account the Project scope. 141. The PMU will be responsible for monitoring and reporting on Project performance. The basis for project performance monitoring will be the DMF, which identifies performance targets for the impact, outcomes, and outputs of the Project. The PMU will collect the data, calculate the indicators, analyze the results, and prepare a brief report describing the extent to which the Project is generating the intended outputs and outcomes. The PMU and IAs will (i) establish the PPMS framework at the start of Project implementation; (ii) confirm that targets are achievable; (iii) develop recording, monitoring, and reporting arrangements; and (iv) establish systems and procedures no later than 6 months after Project inception. C. Evaluation

142. In addition to regular monitoring, project performance will be reviewed at least once a year jointly by ADB and MOALI. The review will assess implementation performance and achievement of project outcomes and outputs, assess financial progress, identify issues and constraints affecting implementation, and work out a time-bound action plan for their resolution. 143. ADB will undertake annual project reviews during the Project period. Additionally, ADB and MOALI will undertake a midterm review of the Project in 2020, covering all institutional, administrative, organizational, technical, environmental, social, poverty reduction, economic, financial, procurement, and other relevant aspects that may have an impact on the performance of the Project and its continuing viability. The review will (i) examine the progress in implementing Project outputs; (ii) evaluate environment, social, and poverty impact; (iii) ensure compliance with assurances in the loan agreement; and (iv) evaluate effectiveness of the

51

implementation activities of the EA. The review shall also undertake a comprehensive review of potential loan savings, identify areas for reallocation of loan proceeds to increase outcome and impact results. 144. Within 6 months of physical completion of the Project, MOALI will submit a project completion report to ADB. D. Reporting

145. The MOALI will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated procurement plan; and (d) updated implementation plan for next 12 months; and (iii) a project completion report within 6 months of physical completion of the Project. To ensure Projects continue to be both viable and sustainable, project accounts and the executing agency audited financial statements, together with the associated auditor's report, should be adequately reviewed. E. Stakeholder Communication Strategy

146. Project information will be communicated through public consultation, information disclosure mechanisms, meetings, interviews, focus group discussions, and community consultation meetings, in accordance with ADB’s requirements of information disclosure policy. Extensive consultation will take place on aspects of infrastructure design and design of nonstructural measures such as awareness raising campaigns, with institutional stakeholders, beneficiaries, and affected persons. In the consultative meetings, participants, including male, female, landless and poor and vulnerable residents and other significant stakeholders will be consulted about concerns or complaints raising mechanisms, information needs, and further consultation expectations. 147. Both irrigation modernization and agricultural value chain promotion activities will engage closely with beneficiary communities through training and capacity building activities as well as demonstration plots on farmers' land, farmer field schools, and visits between farmers. These will provide a basis for communications between beneficiaries as well as between the project and beneficiary stakeholders. 148. The web/internet based information system will be established to convey important information on markets and agricultural practices. In addition, it will be developed to communicate information about on-going and future project activities to better inform and involve stakeholders on project implementation. As opportunities for broadcasting progress the Project will also develop broadcast media to ensure widespread distribution of information on Project activities.

Matrix on Public Communication Strategy

Stakeholders Information required Who will provide Strategy/Means

Government Key Stakeholders

MOALI

IWUMD

DOA

PMU

Full access to all information on all aspects of the project planning and implementation

PMU ADB

Quarterly Progress Reports; External monitoring reports on safeguards; ADB website; Mission Aide Memoires

52

Stakeholders Information required Who will provide Strategy/Means

Beneficiaries and projects affected persons/groups

Farmers

Water user groups

Information on project planning, design, implementation and expected contributions

MOALI IWUMD DOA PMU ADB

Consultations with water user groups and other beneficiaries; quarterly progress reports; external monitoring reports on safeguard; ADB website; ADB mission reports and Aide Memoires

Civil Society Organizations/ Nongovernment Organizations

Project plans and activities that will impact target groups

PMU IWUMD/DOA township offices ADB

Consultations with water user groups and other beneficiaries; quarterly progress reports; external monitoring reports on safeguard; ADB website; ADB mission reports and Aide Memoires

Private companies (firms and construction companies)

Procurement contracts PMU MOALI website

Cofinancing partners Project progress and performance

PMU ADB

MOALI website; quarterly progress reports

X. ANTICORRUPTION POLICY

149. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the Project.36 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the EA and all Project contractors, suppliers, consultants and other service providers. Individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the Project.37 150. To support these efforts, relevant provisions are included in the loan agreement, Project agreement and the bidding documents for the Project. In particular, all contracts financed by ADB in connection with the Project will include provisions specifying the right of ADB to audit and examine the records and accounts of the EA and all contractors, suppliers, consultants, and other service providers as they relate to the Project.

XI. ACCOUNTABILITY MECHANISM

151. People who are, or may in the future be, adversely affected by the Project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.38

36

Available at: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 37

ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp 38

For further information see: http://www.adb.org/Accountability-Mechanism/default.asp.

http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf

http://www.adb.org/integrity/unit.asp

http://www.adb.org/Accountability-Mechanism/default.asp

53

XII. RECORD OF PAM CHANGES

152. All revisions/updates during the course of implementation will be retained in this section to provide a chronological history of changes to implementation arrangements recorded in the project administration manual (PAM). There are as yet no relevant changes to this draft PAM document.

54 Annex 1

PROCUREMENT PLAN

Basic Data

Project Name: Irrigated Agriculture Inclusive Development Project in Myanmar

Loan No./ Project No.47152 Approval No. ----------------

Country: Republic of the Union of Myanmar Executing Agency: Ministry of Agriculture, Livestock and Irrigation

Project Procurement Classification: Category A (High Risk)

Implementing Agency: Department of Irrigation and Management of Water Utilization and Department of Agriculture

Project Financing Amount: ADB Financing: SDR53,830,000 ($75,000,000) Government financing ($3,440,000)

Project Closing Date : 30 June 2024

Date of First Procurement Plan: 10 October 2016 Date of This Procurement Plan: 10 October 2016

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

1. Procurement and Consulting Methods and Thresholds 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 International Competitive Bidding (ICB) for Works $ 3,000,000 and above Prior review

International Competitive Bidding (ICB) for Goods $ 500,001 and above Prior review

National Competitive Bidding (NCB) for Works $100,000 to $2,999,999 NCB packages larger than $2 million will require prior review by ADB. First three NCB packages $2 million and below for both goods and works will require prior review. Post review will be followed if the process and capacity demonstrate adequacies.

National Competitive Bidding (NCB) for Goods $100,000 to $500,000

Shopping for Works $30,000 to $99,999 First three packages required for prior review. Post review will be followed if the process and capacity demonstrate adequacies.

Shopping for Goods $10,001 to $99,999

Community Participation Below $30,000

Direct Procurement $10,000 and below

Consulting Services

Method Comments

Quality and Cost Based Selection (QCBS) Prior Review

Individual Consultants Prior Review

Annex 1 55

2. Goods and Works Contracts Estimated to Cost $1 Million or More The following table lists goods and works contracts for which the procurement activity is either ongoing or expected to commence within the next 18 months.

Package Number

General Description Estimated

Value Procurement

Method

Review [Prior /

Post/Post (Sampling)]

Bidding Procedure

Advertisement Date

(quarter/year)

Comments

1 Irrigation – Yamethin District no 1

$9.5 million ICB Prior 1S2E

Q4/2016

2 Irrigation – Yamethin District no 2

$9.6 million ICB Prior 1S2E Q4/2016

1S2E = Single stage, two envelopes

3. Consulting Services Contracts Estimated to Cost $100,000 or More The following table lists consulting services contracts for which the recruitment activity is either ongoing or expected to commence within the next 18 months.

Package Number

General Description

Estimated Value

Recruitment Method

Review (Prior / Post)

Advertisement Date

(quarter/year)

Type of Proposal

Comments

3 Project Management Unit

$2.323 million

QCBS

Prior Q4/2016 FTP (80:20)

4 Irrigation design (ADB schemes)

39

$1.756 million

QCBS Prior Q4/2016 FTP (80:20)

5 Irrigation works supervision (ADB schemes)

40

$1.437 million

QCBS Prior Q1/2017 FTP (80:20)

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

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

Goods and Works

Package Number

General Description

Estimated Value

Number of

Contracts

Procurement Method

Review

Bidding Procedure

Advertisement Date

(quarter/ year)

Comments

6 Minibus (15seater)

$0.04 million 1 Shopping Prior Q1/2017

7 4WD twin cab $0.30 million 3 Shopping Prior Q1/2017

8 Car $0.10 million 2 Shopping Prior Q1/2017

39

This service is delivered in conjunction with the procurement contract packages 1 and 2. 40

This service is delivered in conjunction with the procurement contract packages 1 and 2.

56 Annex 1

9 PMU Office refurbishment

$0.04 million 1 NCB Prior Q1/2017

10 Computers and office equipment

$0.13 million Multiple Shopping Prior Q1/2017

11 Office furniture

$0.04 million Multiple Shopping Prior Q1/2017

12 Yamethin Hub VCC design, construction, supervision


13 Yamethin FC design, construction and supervision


14 Office furniture, IT and technical equipment

$0.03 million Multiple Shopping Post Q3/2017

15 Motorcycles $0.01 million Multiple Shopping Post Q3/2017

Consulting Services

Package Number

General Description

Estimated Value

Number of

Contracts

Recruitment Method


Advertisement Date

(quarter/ year)

Type of Proposal

8

Comments9

B. Indicative List of Packages Required Under the Project The following table provides an indicative list of goods, works and consulting services contracts over the life of the project, other than those mentioned in previous sections (i.e., those expected beyond the current period).

Goods and Works

Package Number

General Description

Estimated Value

(cumulative)

Estimated Number

of Contracts

Procurement Method

Review [Prior /

Post/Post (Sampling)]

Bidding Procedure

Comments

16 Irrigation – Magway District No 2 (22,500 ac)

$14.5 million 1 ICB Prior 1S2E

17 Irrigation – Yamethin District no 3 (15,000 ac)

$9.7 million 1 ICB Prior 1S2E

18 Yamethin and Magway FCs design, construction and supervision

$0.30 million 2 NCB Post

19 Office furniture, IT and technical

$0.06 million Multiple Shopping Post

Annex 1 57

equipment

20 Motorcycles $0.02 million Multiple Shopping Post 1S2E = Single stage, two envelopes

Consulting Services

Package Number

General Description Estimated

Value (cumulative)

Estimated Number

of Contracts

Recruitment Method


Type of Proposal

Comments

21 Individual consultants 0.97 4 ICS Prior

C. National Competitive Bidding Guidelines 1. The procedure to be followed for National Competitive Bidding for procurement of works, goods and equipment shall be those set forth in ADB’s standard bidding document and the Executing agency shall adopt following practice in compliance with ADB’s Procurement Guidelines (2015, as amended time to time):

2. Eligibility. The Bidders shall not be declared ineligible or prohibited from bidding on the basis of barring procedures or sanction list, except individuals and firms sanctioned by ADB, without prior approval of ADB. 3. The bidding process shall not be restrictive or limited to the bidders already registered or working with the Government departments in the Republic of the Union of Myanmar or require any specific document to be issued by the authorities before submission of bids. 4. Anticorruption. Definitions of corrupt, fraudulent, collusive, and coercive practices shall reflect the latest ADB Board-approved Anticorruption Policy definitions of these terms and related additional provisions. 5. The Borrower shall reject a proposal for award if it determines that the bidder recommended for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for the contract in question. 6. ADB will declare a firm or individual ineligible, either indefinitely or for a stated period, to be awarded a contract financed by ADB, if it at any time determines that the firm or individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for, or in executing, ADB-financed contract.

7. Bidding documents. ADB’s standard bidding document shall be used for procurement of works, goods and equipment.

58 Annex 1

8. Manufacturer’s name or Brand name proprietary name. The bidding document shall not include any manufacturer’s name or brand name or proprietary name. The bidding document shall be based on the specification and technical details of the works, goods and equipment. 9. Evaluation and Qualification Criteria. The criteria applied in the bidding process shall be pass-fail and based on the standard bidding document. The Executing Agency shall not use the method or procedures of ranking the bidders on the basis of technical competence or expertise or financial soundness or experience in any way. 10. Rejection. The Executing Agency shall not exclude the International bidders having nationality of eligible country from participation in the bidding process. 11. Bids shall not be rejected and new bids solicited without ADB’s prior concurrence. 12. Price negotiation shall be allowed only where the price offered in the lowest evaluated and substantially responsive bid substantially exceeds costs estimates. The Commencement of price negotiation shall be subject to ADB’s prior approval.

Annex 2 59

OUTLINE TERMS OF REFERENCE FOR CONSULTANTS A. Project Management Unit

1. The project will be managed by Project Management Unit (PMU) within the physical and institutional structure of the Irrigation and Management of Water Utilization Department (IWUMD), located in Nay Pyi Taw at the Ministry of Agriculture, Livestock and Irrigation (MOALI). The PMU will be managed by a Project Manager recruited through competitive external recruitment process. In view of the lack of project management expertise and knowledge of Bank policies and procedures, the project will support the PMU and staff of the relevant departments/agencies with additional technical assistance, both national and international, to promote effective implementation of the project and build local capacities in relevant areas. 2. Project Director (National, seconded from MOALI for 84 person months). The PMU will work under the guidance of the Project Director, whose role will be to ensure that the project implementation is closely aligned with the strategic plans of the MOALI, coordinate the work between various departments, and ensure that the project receives a proper senior management attention of the MOALI needed to resolve urgent implementation issues. The Project will be governed at national level by the Project Steering Committee and at the district / township levels will coordinate with local government institutions and particularly the Agricultural Coordination Committees. 3. Project Manager (National 84 person months) is responsible for day-to-day management and coordination of the Project and for planning, administering and coordinating all project activities. Project Manager reports to Project Director and has specific tasks to:

(i) Ensure that the project is implemented in accordance with ADB Guidelines, the Loan Agreement, this Project Administration Manual, and that relevant rules and regulations of the government and ADB, including its safeguard policies;

(ii) Coordinate across relevant departments within MOALI, their sub-national level offices, other government agencies and project stakeholders for smooth communications and timely implementation and reporting of all project activities;

(iii) Ensure timely preparation of Annual Work Plans, including all project-supported activities, and their implementation, liaising with and facilitating the involved departments and other entities;

(iv) Prepare and submit to Project Director in the MOALI the regular progress reports;

(v) Prepare and submit to the Asian Development Bank quarterly and annual reports as per agreed formats;

(vi) Review and clear reports and documents from other PMU staff, including bid documents and consultant reports, before they are submitted to the government and ADB;

(vii) Liaise with national and international institutions in matters requiring mutual cooperation;

(viii) Facilitate smooth communications of project related information within the MOALI as well as to external stakeholders to enhance transparency;

(ix) Guide, supervise and coordinate the activities and functions of the PMU staff, and ensure their quality performances; and

(x) Keep Project Director updated with all important matters related to the project, and alert him/her immediately when serious issues are reported;

60 Annex 2

4. Finance Manager (National 84 person Months) Under the direct supervision of the Project Director, and within the framework of projects appraisal reports and loan/grant agreements, responsible for the financial management of the PMU, including accounting, budgeting , financial reporting, internal controls, auditing arrangement, flow of funds and the efficient management of projects resources. Specific duties:

(i) Prepare together with the Project Director the annual work plan and budget and the budget and financing plan;

(ii) Be responsible for key project documents such as, the disbursement handbook, the Loan Agreement and the Disbursement Letter;

(iii) Develop and maintain an efficient accounting system and reliable internal control procedures and guidelines for financial reporting and recordkeeping;

(iv) Responsible for the preparation, review and monitoring of projects budgets; (v) Prepare/verify all withdrawal applications for submission to ADB, and ensure the

availability of funds for all planned activities. Manage the projects bank accounts, approve and co-signs all payments;

(vi) Prepare and provide financial reports including the sources and uses of funds statement, incurred expenditures by component, expenditure category and financier, designated account reconciliation statement, fixed asset list and cash flow forecast etc. for submission to the National Project Steering Committee, ADB on a semi and annual basis, and maintain all records in a form appropriate for audit;

(vii) Lead the process of contracting the Office of the Auditor General to conduct an independent audit of the annual project accounts, ensuring that annual audits are carried out within the specified timeframe;

(viii) Develop and maintain a system of financial control over all expenditure incurred by implementing partners;

(ix) Supervise and coordinate the work of staff placed under his/her direct authority; (x) Review and regularly update the Financial Management Manual of the Project;

and (xi) Undertake any other activities assigned by the Project Director.

5. PMU Accountant (National 2 persons, 84 person months each). Under the direct supervision of the Finance Manager; specific duties include:

(i) Assist the Finance Manager, in the preparation of the Annual work plan through liaison and information gathering with Implementing departments;

(ii) Assist the Finance Manager in the implementation of a sound financial management system;

(iii) Prepare financial reports, including monthly funds reconciliation, and monthly, quarterly, semi-annual and annual expenditure statements;

(iv) Prepare transaction vouchers, and input all transactions into the PMU accounting system before submission to the Finance Manager for approval;

(v) Process all payments, ensuring that PMU procedures are strictly adhered to; (vi) Manage and report on the use of Petty Cash in accordance with the approved

procedures; (vii) Assist the Finance Manager in the preparation of withdrawal applications; (viii) Prepare cash flow forecasts as required; (ix) Monitor financial returns from regional/district offices, including monthly visits to

their offices;

Annex 2 61

(x) Assist in the preparation and monitoring of annual operational budgets; (xi) Functional supervision and training of Accounts & Administrative Assistants in

PMU/IA; (xii) Maintenance of a well-organized and up-to-date filing system for accounting and

financial records as well as an fixed asset tagging system; (xiii) Perform physical inventory of project assets each year; (xiv) Assist the Accountant in the preparation of the financial management manual of

the project; (xv) Provide assistance to the OAG as required; and (xvi) Undertake any other activities assigned by PMU management.

6. PMU Accounts Assistant (4 persons National 84 person months each). Under the direct supervision of the PMU Accountant. Specific duties include:

(i) Assist the Accountant in the implementation of a sound financial management system;

(ii) Assist the Accountant in preparing financial reports, including monthly funds reconciliation, and monthly expenditure statements;

(iii) Assist the Accountant to prepare transaction vouchers, and input all transactions into the project management accounting system before submission to the Accountant for approval;

(iv) Assist the Accountant to process all payments, ensuring that PMU procedures are strictly adhered to;

(v) Assist the Accountant to process monthly payroll, payment of salaries to staff and Project contributions;

(vi) Assist the Finance Manager and Accountant in the preparation of withdrawal applications, cash flow forecasts;

(vii) Assist in reviewing and monitor financial returns from Implementing Partners, including monthly visits to their offices;

(viii) Assist in the preparation and monitoring of annual operational budgets; (ix) Collate data received from colleagues into the system; (x) Maintain a well organized and up-to-date filing system for accounting and

financial records; (xi) Maintain a consolidated contract register of all contracts agreed by Implementing

Departments; (xii) Provide assistance to the external auditors as required; (xiii) Collect and review financial reports from implementing partners at district level;

and (xiv) Undertake any other activities assigned by PMU management.

7. Financial Management Specialist (International 7 person months over the first year) - At least a Master degree in accounting, finance or relevant field and holding recognized accounting professional qualification and at least 10 years professional experience in accounting, development project accounting in development institution financed projects, with major development partners or international non-governmental organizations. The objective of the consultancy is to assist the Project in implementing the financial management (FM) system for the project, including training of staff and revision of the FM Manual, as needed. Specifically, the consultant will be responsible for the following tasks:

(i) Assist the Project to implement the FM system as set out in the Project’s FM Manual;

62 Annex 2

(ii) Ensure internal controls put in place to achieve accountability at all levels are working;

(iii) Revise/prepare financial management manuals, including revising all forms when required;

(iv) Review, including identification of whether accounting software will be suitable for the project and, if so, work closely with MOALI finance staff and accounting software provider to design appropriate chart of accounts and reporting format to ensure the project’s financial reporting requirements/needs are met;

(v) Assist with the preparation Annual Work Plan, budget, cash flow forecast/ disbursement plan, reallocation plan, if any to make sure funds are available as and when required and reported accurately;

(vi) Guide and provide quality control over preparation of withdrawal application, SOE and DA reconciliation. Assist or guide Project staff in communication with the Bank on disbursement and financial management matters;

(vii) Guide local staff and provide quality control over the preparation of the Interim Unaudited Financial Report, Annual financial report and financial statements required by the Bank and auditors;

(viii) Supervise and undertake on-the-job training and allocation of works for local finance/accounting staff. The consultant should also assess the capacity of government finance staff working on the project. Prepare an annual capacity building plan and provide trainings including formal and on-the-job training

(ix) Monitor the financial performance of the overall project and to ensure financial assurance is ascertain; and

(x) Carry out other financial management related tasks as requested by the Project Manager.

8. Procurement Specialist (International 10 person months, National 52 person months). The International inputs will be over one and a half year and National over four years. They will assist EA and IAs in procurement activities and ensure compliance with ADB requirements by provide full assistance and on-job training to MOALI staff on all aspects of ADB procurement procedures, in particular in the timely recruitment of consultants and procurement of works. The International specialist will have 10 years and National 5 years’ experience in procurement and contract management for ADB or World Bank projects. The responsibilities will include but not limited to:

a. Support and assist the Executing Agency in various stages of recruitment of consultants following QCBS procedure complying with ADB requirements:

(i) Assist in Advertising seeking the Expression of Interest (EOI) from the prospective consulting firms;

(ii) Assist in the preparation and submission of long list and shortlist of technically qualified consulting firms;

(iii) Support in preparation of the Request for Proposals (RFP) and its issuance to the shortlisted consulting firms;

(iv) Assist in conducting Pre-proposal conference, preparation and issuance of clarifications;

(v) Assist in opening and the evaluation of the technical proposals; (vi) Assist in conducting the opening of the financial proposals, evaluate the financial

Proposals and prepare the ranking of proposals; and (vii) Assist in negotiating the contract with the first ranked firm and signing the

Contract.

Annex 2 63

b. Support the Executing Agency in all aspects of Procurement of Works following Single-stage two-envelope bidding procedure complying with ADB requirements:

(i) Assist in preparation and finalization of Bidding Documents and Invitation for Bids (IFB) for procurement of various works and goods including Specifications and requirements, Bill of Quantities/ Schedules, qualification criteria and conditions of Contract using FIDIC MDB Harmonized edition for works contracts;

(ii) Assist in issuance of IFB; (iii) Assist in conducting Pre-bid meeting, preparation and issuance of clarifications; (iv) Assist in conducting bid opening and the evaluation of the technical bids; (v) Assist in preparation and finalization of Technical Bid Evaluation Reports

(TBER); (vi) Assist in conducting opening of the financial bids and evaluate the financial bids; (vii) Assist in preparation and finalization of Price Bid Evaluation Reports (PBER);

and (viii) Assist in contract negotiating with the LESR bidder and signing the Contract.

c) The Specialists shall also assist the Executing Agency and Implementing Agency in contract interpretation, contract administration and documentation on contractual matters, and any additional tasks as assigned time to time that are relevant to the assignment.

9. Monitoring & Evaluation Specialist (National, 84 person months) - Should have at least a Master’s degree in agricultural economics, development economics, project management or closely related fields with specialized training in monitoring and evaluation - local or international recognized professional qualification will be an advantage and at least five years of professional experience in related field. The objective of the consultancy is to assist the Project in system implementation and day to day monitoring and evaluation (M&E) of the project activities and results. Under the overall supervision and guidance of Project Manager, the M&E Specialist will undertake the following tasks:

(i) Monitor the status and progress of project implementation based on the Results Framework and the M&E Plan;

(ii) Develop an M&E plan conducive to continuous observation, data collection and analysis, communication and reporting, and data and information storage;

(iii) Develop project management information system and ensure smooth operation and data updating;

(iv) Define and undertake a program of baseline surveys and studies, including those needed in support of ongoing evaluation, mid-term review and completion review processes;

(v) Liaise with and agree with stakeholders in each component/subcomponent, within MOALI and with sub-national level entities, the respective reporting, monitoring and data collection needs and responsibilities;

(vi) Develop clear and user-friendly data collection and reporting formats in collaboration with project counterparts at the different levels, and provide training to central and subnational staff on their use;

(vii) Compile data, information and reports from different levels, analyze data to compute the status of selected indicators and provide feedback to project management and project counterparts at the different levels on the progress of implementation and of any need to modify schedules, strategies and objectives; and

(viii) Prepare a training plan and provide technical backstopping on human resource development for results-based M&E.

64 Annex 2

10. International M&E Specialist (International - 10 months). The M&E specialist will have as a minimum a Master’s Degree in administration, management, economics, social sciences or other relevant field with at least 10 years experience in designing and implementing monitoring and evaluation, programs and projects and a demonstrated knowledge of participatory M&E systems, project performance monitoring system, benefit monitoring and evaluation, or other relevant experience. The specialist will:

(i) Work closely with PMU to design and implement base line studies in a way that the information could be used as benchmarks for project benefit monitoring;

(ii) Design a project performance monitoring, evaluation and reporting system for the project aligned to the Design and Monitoring Framework, including roles and responsibilities for implementation;

(iii) Assist the PMU to establish effective procedures for monitoring and evaluating the implementation of those agribusinesses, PPP and other enterprises supported by the project and their compliance with environmental and social safeguards;

(iv) Train and guide the PMU monitoring and evaluation national contracted staff, service providers and MOALI staff to implement the PPMS to provide performance information and decision framework to improve project performance, and for outcome and impact evaluation of various project activities implemented under the project including the performance of consultants and service providers;

(v) Guide the PMU M&E staff to establish effective reporting procedures and formats, and for dissemination of the instructions for remedial actions; and

(vi) Undertake any other duties as may be reasonably assigned by the PMU. 11. Gender and Social Specialist (National - 36 person months) - The Gender and Social Specialist will have national qualifications in social or environmental sciences and at least seven years’ experience in gender development on community driven development projects. Knowledge or experience with the Asian Development Bank’s social safeguard policies will be particularly useful. Good communication skills, both written and oral, are essential. Based in the Project Management Unit (PMU), the Specialist will work closely with the Implementing Agencies (Department of Irrigation and Management of Water Utilization and Department of Agriculture, the Loan Implementation Social Consultant (LISC), and non-governmental organization (NGO) teams to facilitate implementation of the Project’s Gender Action Plan (GAP). The Specialist’s input will be intermittent throughout the Project implementation phase with a total of 36 person months input. The next sections discuss the gender and social safeguard functions.

a. Gender. The Specialist’s main tasks will be related to mainstreaming gender guided by the GAP which ongoing activities throughout construction and project implementation. Based on the PPTA recommendations, the Specialist will:

(i) prepare implementation guidelines to complement the GAP for women’s

participation in the Project; (ii) support gender targeted interventions by promoting women participation in

subproject planning, implementation, operation and maintenance, and monitoring of irrigation management and agricultural production interventions;

Annex 2 65

(iii) provide oversight for women inclusion in subproject feasibility reports and compliance with GAP particularly in identification of rural livelihoods support for women (on-farm and off-farm);

(iv) provide technical support to NGOs for preparation of gender sensitive training programs including supervisory support for training and related activities such as workshops and seminars;

(v) arrange gender awareness training for the Executing Agency, Implementing Agencies, and Project partners;

(vi) together with NGOs, other PMU staff, the Implementing Agencies and partner staff at district and township levels undertake capacity building with a gender inclusive lens with farmers groups, WUGs and any other Project beneficiaries as part of the Irrigation Management component;

(vii) coordinate with the PMU’s Monitoring and Evaluation Specialist to develop a range of gender disaggregated indicators that will enable effective monitoring of women’s development. Provide training on gender indicators and monitoring for those involved in monitoring. Lead the efforts to monitor GAP implementation; and

(viii) support other PMU staff and specialists to incorporate gender sensitive resource management interventions to ensure women’s interest in the proposals, studies, activities and evaluations.

b. Social Safeguards. The Project’s social safeguard overall responsibilities will be

led by the LISC. However, the Specialist will have social safeguard tasks responsibilities, mainly when the safeguard checklists and due diligence reports need to be completed for pipeline projects at the feasibility stage, and again at the beginning of construction when the contractor’s land negotiators require monitoring to ensure land agreements are completed in line with the Project’s Resettlement and Ethnic Group Framework (REGF). Based on the PPTA recommendations, the Specialist will:

(i) support the LISC’s activities by preparing the logistics including and arranging

meetings with stakeholders. Facilitate meetings in local languages and provide oral summaries and/or written minutes of meetings in English. Contribute advice and feedback with regards to REGF checklist and due diligence reports which are the responsibility of the LISC;

(ii) support training activities for REGF. Contribute to and reproduce training materials in Bamar. Organize and facilitate REGF training to the Executing Agency, Implementing Agencies, and Contractor staff;

(iii) For any resettlement plans or ethnic group plans, undertake the field surveys with households and stakeholder engagement requirements in Bamar under the guidance of the LISC;

(iv) Collect monitoring information for the REGF on a schedule determined and agreed with the LISC and Monitoring and Evaluation Specialist; and

(v) Collaborate and support external monitoring required for the REGF.

12. The Loan Implementation Social Consultant (LISC) (International - up to 12 person months intermittent) will be an internationally qualified and experienced social scientist with a minimum seven years’ demonstrated experience with social safeguard (resettlement and/or ethnic group) and ADB’s safeguard policy. with a multidisciplinary team and dealing with all aspects of site-related social issues, and excellent communication skills. Previous experience in

66 Annex 2

Myanmar is desirable. The LISC will lead the Project Management Unit’s implementation of the Resettlement and Ethnic Group Framework (REGF) with support from the Gender and Social Specialist. The LISC will be contracted for up to 12 person months intermittently1 and will perform the following tasks:

(i) Review the REGF, IEE, SPS as well as Myanmar general human development

assessments to understand the socio-economic issues associated with the Project area;

(ii) Consult with PMU to identify if there are any changes in the Project sites or baseline socio-economic conditions. Undertake REGF screening activities;

(iii) Complete the REGF checklists and due diligence reports. Produce resettlement plans or ethnic group plans as necessary. Work with the Gender and Social Specialist to provide guidance on the local inputs required for the plans, such as completion of required REGF field surveys and consultation;

(iv) Assist the PMU in establishing Grievance Redress Mechanism (GRM), coordinate consultation with local stakeholders to inform them of the GRM in discussions related to land acquisition. Contribute advice in the treatment of and proposed mitigation measures for GRM investigations related to the REGF and wider social issues as appropriate;

(v) Review Tender and Contractor Documents to ensure all required land acquisition and social safeguard requirements have been included, update as required;

(vi) Collaborate with external monitoring for REGF and any required resettlement plan and EGP implementation;

(vii) Coordinate with the PMU’s Monitoring and Evaluation Specialist, monitoring activities, processes and indicators for the REGF. Prepare checklists for PMU supervision of the resettlement plan and EGP implementation. When PMU’s internal monitoring identifies, any potential compliance issues related to ADB’s safeguard policies, the LISC will undertake a formal investigation and identify and monitor the corrective measures;

(viii) Prepare annual progress reports on social safeguards for ADB. The reports should review progress with Project implementation, results of checking and monitoring, identify problems encountered, actions taken/or proposed to be taken to resolve problems and activities programmed for next monitoring period. Include monitoring results and advise/support the taking of remedial actions if required;

(ix) Conduct training for PMU and contractors on REGF requirements and implementation; and

(x) Conduct site visits to the Project area during REGF implementation. 13. Loan Implementation Environment Consultant (National) - 24 person months intermittent throughout the project implementation. The specialist will have a minimum of 5 years practical experience in the implementation of EMPs and environmental monitoring, ability to work with a multidisciplinary team and dealing with all aspects of site-related environmental issues, and excellent communication skills. Previous experience as a National Environment

1 This estimate is based on two week visits for completing the checklists and due diligence reports for each

subproject (five visits); two or three week visits (three when the contractor is new to the Project and two when the contractor has worked on the project previously) at the beginning of construction (five visits); home time of up to a week to communicate with the IEP, one month assignments for completion of any resettlement or ethnic group plan, three week assignments for any completion reports, one or two weeks of home based preparations of annual report inputs each year.

Annex 2 67

Specialist for at least one ADB funded project in Myanmar is desirable. The Loan Implementation Environment Consultant will facilitate the implementation of the EMP and ensure the grievance redress mechanism functions effectively. The specialist will perform the following with respect to environmental management:

(i) Review IEE and project EMP as well as Myanmar general environmental assessments to understand the environmental issues associated with the project area;

(ii) Consult with PMU to identify if there are any changes in the project sites or baseline environmental conditions. Assess impacts of any changes and update EMP;

(iii) Assist the PMU in obtaining all necessary domestic environmental approvals to allow the projects to proceed, as required;

(iv) Assist PMU in establishing Grievance Redress Mechanism (GRM) in accordance with GRM procedure defined in the IEE, coordinate consultation with local stakeholders as required, informing them of imminent construction works, updating them on the latest project development activities, GRM, etc. Facilitate consultation between the contractor and local stakeholders with respect construction scheduling, and proposed mitigation measures to control dust, and to minimize disruption to local traffic;

(v) Review Tender and Contractor Documents to ensure all required environmental specifications have been included, update as required;

(vi) Prepare environmental audit checklists for weekly and monthly supervision of the EMP by the PMU, and review contractor-EMPs to confirm compliance with the project EMP;

(vii) Coordinate the conduct of periodic environment compliance monitoring by licensed monitoring entities, as defined in the monitoring program;

(viii) On behalf of PMU, prepare annual EMP progress reports for ADB. The reports should review progress with project implementation, results of checking and monitoring, identify problems encountered, actions taken/or proposed to be taken to resolve problems and activities programmed for next monitoring period. Include sampling results and discussion in the monitoring reports and advise/support the contractor in taking remedial actions if any of the test results are not within the required limits;

(ix) Conduct training events for PMU and contractors on the requirements and implementation of the EMP in accordance with the training plan defined in the project EMP; and

(x) Conduct regular site visits to the project area during the construction period and conduct EMP compliance inspections (in accordance with monitoring and inspection plan defined in the EMP).

14. Independent External Party (International 5 person months and National 5 person months). The objective of this consulting service is to verify that the land acquisition of the Irrigated Agriculture Inclusive Development Project (the Project) follows the principles and procedures of negotiated settlement and voluntary donation set for the project. The project is supported by the Asian Development Bank (ADB) and will improve agricultural performance through improved rural infrastructure, in particular small and medium-scale irrigation systems and, as well as rural roads in support of agricultural development outcomes. The Ministry of Agriculture, Livestock and Irrigation (MOALI) is assisted by a land acquisition consultant for implementing the land acquisition. An independent external party such as a qualified non-

68 Annex 2

governmental organization (NGO) or consultant will be engaged by the project to undertake the verification.

15. This scope of work will require the independent party to undertake the following general tasks among others:

(i) Using verbal and written records, verify that the donation is in fact voluntary, that the settlement represents an amicable and fair agreement, that neither resulted from coercion, and that they were accomplished through the consultation process; and

(ii) Ensure that negotiated settlements and voluntary donations do not severely affect the living standards of affected persons and will benefit them directly.

16. The independent party’s work will include several specific tasks:

(i) Review all project documents (including loan agreement and memorandum of understanding (MoU) or correspondences between ADB and the MOALI related to the project’s land acquisition;

(ii) Visit the project site to verify whether the voluntary donation and negotiated settlement processes follow the principles and procedures agreed in the loan agreement, MoUs and Resettlement and Ethnic Groups Framework. Verification will cover an adequate representative random sample2 of the affected households who voluntary donated the land;

(iii) Conduct interviews and/or participatory community meetings with the affected peoples/affected households to obtain perception of the voluntary donation;

(iv) Interview relevant stakeholders including MOALI , construction supervision and project implementation consultants, and the land acquisition specialist, community leaders and local authorities regarding the principles and procedures followed in voluntary donation;

(v) Verify whether the criteria set for voluntary donation were properly applied; (vi) Verify whether the procedures of the voluntary donation were properly

implemented; and (vii) Prepare a verification report.

17. Deliverables. Deliverables will include:

(i) Quarterly Progress Reports (QPRs) - summarizes the highlights per quarter, the activities undertaken and a summary of disbursements; physical and financial progress of the project; achievements of targets for outputs and inputs defined in the DMF, to be submitted within 15 days of the first month of the succeeding quarter.

(ii) Financial Reports on semi-annual and annual basis (iii) M&E plan and annual reports (iv) Semi-annual safeguards report

2 The number of households covered by the verification may rise or fall, depending on the total number of affected

households who donated. The often "acceptable" margin of error used by survey researchers falls between +/- 4% and 8% at the 95% confidence level. The 95% confidence level means that there is a 95% chance that the difference is real and not just a quirk of the sampling. If we repeated the study 100 times, 95 of the samples drawn would yield similar results. Websites that can be used to calculate the required sample size for a population (N), include http://www.raosoft.com/samplesize.html, http://www.calculator.net/sample-size-calculator.html

http://www.raosoft.com/samplesize.html

http://www.calculator.net/sample-size-calculator.html

Annex 2 69

(v) Resettlement and Ethnic groups plans (if required) (vi) Annual reports – summarising progress in all aspects of the project including

the activities undertaken and a summary of disbursements; physical and financial progress of the project; social safeguards (monitoring of compliance, problems encountered, actions taken and proposed); achievements of targets for outputs and inputs defined in the DMF

B. Irrigation Systems Modernization

18. The project will rehabilitate, improve and modernize about 11 sub-projects with a total area of about 36,422 ha in the Central Dry Zone of Myanmar. Feasibility studies for Natmauk (10,117 ha) and Chaungmagyi (2,833 ha) systems have been carried out and a pipeline of other sub-projects has been identified. The detailed engineering designs followed by supervision of construction of core sub-projects are to be done by the Consultants working in conjunction with the Department of Irrigation and Management of Water Utilization (IWUMD). Feasibility studies will be undertaken for subsequent projects, followed by design and construction of selected sub-projects. 19. In the irrigation management component, the Consultants will develop improved management arrangements and provide capacity-building to the Department of Irrigation and Management of Water Utilization, Agricultural Coordination Committees, Frontline Centres, farmers and farmer organisations, and other related stakeholders. This will include piloting approaches for more formal participation in irrigation through water users’ groups and associations.

1. Scope and Objective of the Services

20. The objective of the consulting services is to provide management and technical assistance to the executing agency and implementing agency in the implementation of the project, and to strengthen technical and irrigation management capacities of the participating government agencies and Water Users. The scope of work will include but not be limited to the following:

(i) Carry out detailed engineering design of the Natmauk and Chaung Magyi irrigation systems, with participation by water users ensured through secondary and tertiary canal walkthroughs;

(ii) Carry out feasibility study of up to three pipeline projects, totalling about 10,117 ha;

(iii) Detailed engineering design of selected future subprojects, and assistance to the Department of Irrigation and Management of Water Utilization in subsequent irrigation designs;

(iv) Detailed planning of yearly activities for all aspects of the proposed construction schedule;

(v) Prepare bidding documents of subprojects; (vi) Assist the Department of Irrigation and Management of Water Utilization in

supervision of construction of civil works; (vii) Ensure timely completion, adherence to specifications, and quality of

construction works; (viii) Provide training to PMU, District and Township IWUMD, ACC, FLC and water

users/WUGs staff in irrigation and water management; asset management and related issues;

70 Annex 2

(ix) Estimate annual O&M requirements of the main and secondary canals and prepare O&M plans and budgets;

(x) Develop and conduct Diagnostic Analysis and Farmers Field School or similar participatory training programs for water users, WUGs and other stakeholders and secondary and tertiary level;

(xi) Prepare reservoir operation rules, irrigation schedules and scheduling procedures for of each system and train Township IWUMD, ACC, FLC and WUGs;

(xii) Establish canal flow measurement systems and procedures for use of monitoring data in water management;

(xiii) Build capacity of existing water management systems at tertiary level, leading to formation of pilot WUGs in subproject areas;

(xiv) Coordinate with the agricultural component regarding the introduction of improved seeds, fertilizers, and other agriculture value chain activities in pilot tertiary units;

(xv) Ensure technology and knowledge transfer from the PIC to counterparts in the PMU;

21. Consultancy services will comprise the following teams for providing assistance to the executing agency and the implementing agency in the implementation and management of the project:

(i) Feasibility and Design Team will carry out feasibility studies of the subprojects and prepare detailed engineering designs, drawings, bills of quantities, construction schedules and tender documents;

(iii) Construction Supervision Teams will be responsible for supervising the construction works, progress reporting, and quality assurance;

(iii) Irrigation Management Team will develop improved O&M and irrigation management procedures and provide training and other support to IWUMD, water users and other stakeholders, and ensure coordination with the agricultural component.

2. Duration of Assignment and Inputs Required

22. The project implementation period of the consultant services is 84 months (1 January 2017 to 31 December 2023). A total of 677 person months including 155 person-months of the International experts and 522 person-months for the National experts would be required. The estimated staffing and expertise person-months requirements per component are summarized below:

3. Terms of Reference of Experts

23. Team Leader/Irrigation Specialist, (International 48 person-months). The expert will have a Master’s degree in irrigation or related engineering subject with preferably 15 years of experience in design, implementation and management of water sector projects including irrigations systems, and preferably team leadership of two ADB financed projects. The candidate must have demonstrated ability to lead teams composed of international and national consultants and create a strong working relationship with the executing and implementing agencies. Excellent communication (written and oral) skills and strong inter-personal skills will be considered an asset. The Team Leader will: (i) provide overall responsibility for technical support during implementation, including preparation and implementation of work plans; (ii) supervise feasibility studies, detailed design and construction supervision of the subprojects; (iii)

Annex 2 71

monitor progress against project implementation schedule and coordinate preparation and submission of periodic progress reports and technical reports; (iv) work closely with the PMU and maintain good coordination among ADB, PMU and other stakeholders; (vi) Provide guidance to Team to ensure that the quality of works meet a required standard; (vii) monitor work of the Civil Works Contractors; (viii) assist PMU in contracts management. 24. Deputy Team Leader/Irrigation Management Specialist, (60 person-months). The expert will have a Master’s degree in water resources/irrigation engineering and preferably 10 years of experience in design, implementation and management of irrigations systems. Experience of working with international consulting firms in donor funded projects and government institutes will be considered an asset. The candidate must have demonstrated ability to work in a multidisciplinary team and excellent communication skills in spoken and written English. In the absence of the Team Leader, the Deputy Team Leader will assume the management of the project. Tasks include: (i) assist the Team Leader in management and implementation of the project; (ii) supervise feasibility studies, detailed design and construction supervision of the subprojects; (iii) ensure effective coordination with the executing agency and other government agencies; (iv) prepare O&M plans for subprojects; (v) assess irrigation efficiency and water productivity and incorporate measures to improve efficiency and water productivity in design of subprojects; (vi) prepare irrigation schedules based on crop water requirements; and (vii) ensure timely completion of works contracts and other activities. 25. Irrigation Institutions Specialist, (24 person-months international). The expert will have a degree in a related field with 10 years of experience in similar work with donor financed projects. The candidate will have demonstrated ability to work in a multidisciplinary team for irrigation management, and will possess excellent communication (written and oral) skills. Tasks include: (i) facilitate participatory studies of tertiary units and ensure user participation in detailed design; (ii) undertake need assessment at various levels of implementation to determine the capacity building needs at these levels; (iii) prepare training programs for water users/other stakeholders in irrigation O&M and water management; (iv) prepare training program in irrigation O&M for IWUMD staff and related stakeholders; (v) prepare guidelines for tertiary level water user groups selection, establishment, and training; (vi) map existing rural institutions and prepare a plan for organizing and/or strengthening WUGs in coordination with the IAs; (vii) work closely with IA to establish stronger link with water users and representative organisations; and (viii) supervise NGOs undertaking training programs for water users’ groups. 26. Irrigation O&M / Asset Management Specialist (6 person-months international 6 person-months national). The experts will have a Master’s degree in irrigation or related subjects with preferably 10 years’ experience in irrigation O&M or asset management. The tasks will include (i) develop O&M plans for sub-projects (ii) propose systematic approaches for asset management at irrigation system and township level and (iii) identify financing needs and arrangements for O&M. 27. Hydrologist, (3 person-months international and 6 person-months national). The expert will have a Master’s degree in hydrology/water resources engineering with preferably 10 years of experience in hydrological studies, modelling and estimating flows. They will have demonstrated ability to work in a multidisciplinary team and excellent communication skills in spoken and written English. Tasks include: (i) carry out hydrological studies for subprojects and update the hydrological analysis and data for the purpose of determining water availability; (ii) review the vulnerability of water resources to climate change; (iii) estimate flood flows and cross drainage requirements; (iv) assess water resources for prioritized sub-projects, and crop water requirements for alternative cropping patterns; (v) assist in designing discharge capacity of main

72 Annex 2

and distributary canals based on crop water requirements and irrigation schedules each tertiary and secondary canal; and (vi) develop reservoir operating rules for sub-projects and provide training in their implementation. 28. Social Development Specialist (6 months international). The expert will have a Master’s degree in social development or related subject with preferably 10 years of experience in social development in relation to water resources or irrigation projects. The expert will have demonstrated ability to work in a multidisciplinary team and excellent communication skills in spoken and written English. Tasks include: (i) analyse the social impact of proposed sub-projects, to understand the requirements from the perspective of farmers; (ii) identify areas of conflict and potential trade-offs between alternative courses of action; and (iii) ensure that farmer interests and all practical measures to reduce adverse impacts are incorporated in design. 29. Senior / Irrigation Design Engineer, (24 person-months international, 32 person-months national). The expert will have a Master’s degree in irrigation or a relevant branch of civil engineering with preferably 15 years (international) and 5 years (national) of experience in design of irrigation systems; and cost estimation and preparation of BOQs. They will have demonstrated ability to work in a multidisciplinary team and excellent communication skills in spoken and written English. The Irrigation Design Engineers will: (i) undertake feasibility studies of potential sub-projects; (ii) specify and supervise topographic surveys; (iii) plan irrigation layouts and ensure needs are water users are taken account of in detailed designs of canals and structures of selected subprojects; (iv) undertake detailed designs of canals, drains and related structures of selected sub-projects; (v) estimate cost of subprojects, prepare BOQs, tender drawings and complete all other requirements for award and construction of work contracts; and (vi) provide on the job training to IWUMD staff in design procedures and advise on detailed design of subsequent sub-projects. 30. Hydraulic Structural Engineer, (12 months international, 18 months national). The expert will have a Master’s degree in irrigation or a relevant branch of civil engineering with preferably 15 years (international) and 5 years (national) of experience in design of hydraulic structures including small dams, weirs, and irrigation systems; and cost estimation and preparation of BOQs. They will have demonstrated ability to work in a multidisciplinary team and excellent communication skills in spoken and written English. The National Hydraulic Structural Engineer including experience working with international consultants preferably in donor funded projects will assist the Irrigation Design Engineers in: (i) detailed designs of canals, drains and hydraulic structures of the core sub-projects; (ii) preparation of design guidelines for structures for other subprojects; (iii) preparation of tender drawings and BOQs and estimation of cost of subprojects; (iv) identify need for specify and supervise geotechnical studies and integrate these considerations into the design. 31. Junior Design Engineer, (3 persons 21 person-months each). The expert will have a degree in irrigation or a relevant branch of civil engineering with preferably 5 years (national) of experience in design of irrigation systems; cost estimation and preparation of BOQs. They will have demonstrated ability to work in a multidisciplinary team and be familiar with standard design software including proficiency in the use of AutoCAD. The Junior Design Engineers will assist the irrigation engineers on all aspects of the design. 32. Construction Management Engineers (20 months international and 72 months national). The experts will be qualified Civil Engineers, preferably with Master’s degree and with 10 years of experience of managing construction of canals and hydraulic structures of donor

Annex 2 73

financed projects. The international specialist should additionally have demonstrated experience with developing and managing FIDIC contracts for large works. Their tasks include: (i) prepare construction schedules; (ii) ensure construction progress adheres to the schedules; (iii) supervise the work of assistant engineers; (iv) monitor progress and quality of construction works; (v) review measurements for completed works, and verify bills for payment; (vi) take measures to minimize contract variations; (vii) assess adequacy of contractors’ input in terms of materials, equipment, construction machinery, workers, and construction approach and methodologies; (viii) monitor physical and financial progress against the milestones, for timely completion; (ix) review and approve the construction drawings of the contractor and permit the contractors to carry out construction work effectively and efficiently and to the highest standards of quality; and (x) report progress, disputes and all the other matters to the Team Leader. 33. Materials/Quality Control Engineers, (72 months national). The experts will have a Bachelor’s degree in Civil Engineering with 5 years’ experience in quality control of construction projects including canals and hydraulic structures and preferably with an International firm. Their task will be to ensure the quality of construction is as per the design specifications. They will carry out on site quality tests as well as review the laboratory tests of the materials submitted by the contractors. 34. Assistant Engineers, (4 positions, 48 person-months each). Qualified Engineer, with Bachelor’s degree in Civil Engineering and preferably 5 years of experience in site supervision of construction works preferably canals and hydraulic structures. Tasks include: (i) reporting to the Construction Management Engineer; (ii) supervise and monitor the construction of works, prepare measurements for works completed and in progress; (iii) certify contractors’ bills; (iv) Check the construction schedule submitted by contractor, and assist contractor’s site manager to make detailed construction plan; (v) report weekly and monthly construction progress and issues to the Construction Management Engineer; (vi) report field variations to the Construction Management Engineer and regularly monitor physical and financial progress against the milestones, according to the contracts to ensure the completion of the contracts on time; (vii) examine contractors’ claims for time extension, variations, and additional compensation, etc., and recommend appropriate decisions to the Construction Management Engineer; (viii) Assist PMU in resolving contractual issues and overall contract management; and (ix) ensure quality of construction as per design specifications.

4. Deliverables

35. Deliverables will include: (vii) Inception Report – within 3 months of mobilization – presenting approach to

tasks and reporting, with details of how each task will be performed, identifying what resources will or may be required, and issues to be addressed by the PMU.

(viii) Quarterly Progress Reports (QPRs) – brief summary of activities undertaken in the quarter, highlighting progress, issues to be addressed and programme for the following quarter.

(ix) Design Report – summarizing the key design parameters and outputs at completion of each detailed design package, in accordance with the project schedule below

(x) Tender Documents – tender documents for each construction package, in accordance with the project schedule below

(xi) Irrigation Management Report – report at the completion of the management planning phase for each package, in accordance with the project schedule below

74 Annex 2

(xii) Annual reports – summarising progress in all aspects of the irrigation component, highlighting activities undertaken in the quarter, progress, issues to be addressed and update programme for the component. 5. Client’s Input and Counterpart Personnel

36. Services, facilities and property to be made available to the Consultant by the Client:

(i) All available project reports and data. Feasibility Reports of Natmauk and Chaung Magyi irrigation systems including feasibility design and drawings of main canals;

(ii) Topographical surveys and geotechnical studies; (iii) Office space with furniture and office equipment at Naypyitaw (iv) Counterpart staff to work closely and full time with the consultants on all aspects

of design, supervision and management; and (v) Vehicles.

C. Agriculture Value Chains Promotion

37. Consultants for agricultural value chains will principally be international consultants working with national counterpart staff from MOALI units, principally DOA, DAR and AMD, transferring more commercial agricultural skills which are not widely available in Myanmar. The team will be recruited through a firm using QCBS procedures and may possibly be appropriate to focus on regional consultants familiar with the conditions in Myanmar and regional markets. 38. Team Leader / Value Chain Development Specialist (International) – 29 person months. The specialist will have at least 15 years practical work experience and be tasked to:

(i) act as Team Leader in planning and implementing the component, giving advice to the Project Director and Project Manager and giving guidance to the team of consultants in the implementation of their Terms of Reference;

(ii) in a participatory processes with irrigated and rainfed farmers, analyze existing strengths and weaknesses within the value chain of each product grown or desired to be grown and prioritize the products for phased implementation during the investment project period;

(iii) design implantation strategy to ensure the development of the products and establishment of enterprises, market linkages and private sector participation where feasible;

(iv) suggest up gradation strategies for each product, laying emphasis on both upstream as well as downstream intervention or leverage points;

(v) suggest potential enterprise development opportunities for each product that will enhance income opportunities for project area inhabitants, develop linkages to related enterprise and micro-enterprise development projects;

(vi) identify investment opportunities through trade associations and Chambers of Commerce that will offer enterprise opportunities and strengthen the product development;

(vii) assess the potential role of PPP in product development and marketing and particularly: (i) assess opportunities for private sector participation and partnerships for improved product development and quality enhancement; (ii) design and formulate public private partnership mechanisms for selected products with high potential; and (iii) suggest options for building such

Annex 2 75

partnership with strong linkages with community institutions, cooperatives, federations and Chambers of Commerce;

(viii) identify the potential products that demand private sector partnerships for development in consultation with the Public Private Partnership and Input Supply Specialist (International);

(ix) design the institutional mechanisms for the private sector partnership best suited for the particular product, suggest the potential private sector players for each product to be approached for partnerships;

(x) (suggest, for each selected product, at what level potential partnerships should be established and suggest the nature of involvement of the private sector and suggest various options for partnership development specific to a product;

(xi) suggest quality improvement of product pre- and post-harvest value addition to meet national and international certification requirements and establish the linkages between certifying institutions and producer groups;

(xii) suggest possible branding strategies for product promotion and take into account local traditions and culture, district development strategy and potential for national and international markets;

(xiii) draw upon lessons learned from other similar projects in the region; (xiv) establish linkages with stakeholders public and private in the CDZ; and (xv) facilitate market promotion activities and awareness creation workshops.

39. Seed Multiplication Specialist (international) – 10 person months The Seed Multiplication Specialist shall have at least 10 years practical work experience and be tasked to:

(i) assist PIUs in identifying appropriate varieties for specific locations and organize foundation/certified seed production in project areas though organized frontline demonstrations cum seed villages;

(ii) review the various seed multiplication options for contract farming and PPP modalities and work with DAR/DOA and private sector to formulated a working model for implementation as a pilot;

(iii) identify groups of small-scale farmers, (who have some experience in seed production) arrange training and input supply to undertake quality seed production (certified and “truthfully labelled seeds”);

(iv) organize training and skill empowerment programmes covering the major seed production techniques such as removal of off-types, rouging, timely harvest, processing and storage of seeds in the frontline demonstration blocks;

(v) organize seed growers and assist them in certified seed production, where possible;

(vi) awareness creation on advantages of using good quality seeds and in promoting the use of quality seeds; and

(vii) support the project FFS/Farmer Training Specialist in the implementation of Farmer Field Schools to demonstrate and extend, not only improved crop seeds, but best practices in conservation agriculture, integrated plant nutrient management, integrated pest management and on-farm water management, and post-harvest processing and storage.

40. Agronomist / Good Agricultural Practice Specialist (International) – 15 person months The Specialist will have at least 10 years practical work experience and be tasked to:

76 Annex 2

(i) be responsible for the planning, implementation and monitoring of the crop development activities of the project in collaboration with the DOA, DAR, YAU and other R&D entities and projects;

(ii) review all the available good agricultural practices technologies relevant to the crops grown in the project area, especially but not limited to rice, oilseeds and pulses;

(iii) prepare in collaboration with high quality technical training materials for use by the staff in the Frontline Centres and for use by the private sector and farmers, these training materials are to be produced at various levels depending on the standard of education and the target audience;

(iv) network with other crop and agribusiness development initiatives and investors to ensure continuous sharing of experiences, effective learning and creation of functional networks and synergies;

(v) support the DOA extension staff and the IWUMD staff in the implementation of improved water management and conservation agriculture, taking into account the need for highlighting the importance of climate smart agriculture;

(vi) support continuous development of agriculture and agribusiness activities through capacity building and information sharing, monitoring of activities, demonstrations and surveys;

(vii) ensure that the implementation of the project Agricultural Value Chains Promotion Component is in line with national development policies regarding agriculture, value chain and agribusiness development; and

(viii) ensure that adaptation to climate change, environmental protection, landless and gender issues are mainstreamed in all activities.

41. Agribusiness Development Specialist (International) – 15 person months. The specialist will have at least 10 years practical work experience and be tasked to:

(i) provide technical assistance to the project in capacitating the project beneficiaries in the private sector in developing business enterprises;

(ii) assist project in implementing activities related to agribusiness support to post-harvest operations and marketing;

(iii) review current agribusiness practices in collaboration with the concerned commodity associations and Chambers of Commerce at District and Township levels;

(iv) provide technical support and guidance to the project in identifying enterprises and evaluating private sector entities in developing business plan that would provide great impact to the farmers, landless and women;

(v) prepare a set of detailed criteria for the selection of viable private sector entities for the project supported grant schemes;

(vi) review all available modalities for financing for the SME’s in agribusiness, agro-processing and marketing both in government and private sectors;

(vii) assist in coaching and mentoring project staff, government staff (DOA, AMD etc.) and private sector in the review and evaluation of business plans to ensure viability and sustainability of the enterprises to be supported by the project;

(viii) assist in the development of marketing plans and strategies that promote market opportunities of product outputs and services to ensure/maintain steady generation of profits from the agribusiness enterprises;

(ix) coordinate with Government and private sector agencies in identifying the appropriate technology for a proposed subproject or enterprise; and

Annex 2 77

(x) assist the PMU in recruiting four recent Myanmar graduates in business or commerce to be service providers (two in each district FC) as Business Advisers and provide mentoring in carrying out the above tasks, including when the consultant is absent and has completed inputs to the project.

42. Legal Advisor (National) – 8 person months The Advisor will have at least 10 years practical work experience and be tasked to:

(i) work with the project and the communities in the project irrigation systems to identify locations for the siting of the satellite Frontline Centres in a village located in the system;

(ii) in liaison with the District DOA office determine the arrangements for the siting of the District level Frontline Centres and that there are no conflicts on the land to be used for the centre;

(iii) check and approve that the transfer arrangements for the land to be used for the FC’s is free from any conflicts and that there no legal issues related to the use of the land for the purpose;

(iv) finalise the legal arrangements for the use of the land for the FCs and that this is binding to the satisfaction of the community, the project, the Government and ADB; and

(v) advise the project on the form of contractual arrangements to be made in relation to PPP, partnerships with the private sector and with farmers providing locations for demo farms and field schools and the like.

43. Agricultural Training of Trainers Specialist (International) – 12 person months The Specialist The specialist will have at least 10 years practical work experience and be tasked to:

(i) assist the project in preparing guidelines, strategies and conduct Training of Trainers designed to build the capacity of participating target groups including the staff of DOA and IWUMD at the District, Township and irrigation systems levels;

(ii) determine the training and capacity building needs of participating line departments (DOA, AMD, DAR and IWUMD), NGOs/CBOs, farmers, landless and women’s groups and other private sector stakeholders involved in the implementation of project activities at all levels;

(iii) identify specific capacity building requirements and define the skills needed for the different participating stakeholders;

(iv) develop and cost capacity building workshops and farmers Field Schools for participating stakeholders;

(v) identify and cost appropriate training materials for target groups in close collaboration with the Agronomist/Good Agricultural Practice Specialist;

(vi) conduct Training of Trainers workshops at District, Township and irrigation system levels and submit training reports to the PMU; and

(vii) evaluate TOT workshops. 44. Public Private Partnership and Input Supply Specialist (International) – 14 person months. The Specialist will have at least 10 years practical work experience and be tasked to:

(i) work across all outputs, serving as lead and subject matter expert on PPP financial and/or commercial matters;

78 Annex 2

(ii) take the lead in developing public models to mobilize private investment in input supply services on a sustainable, financially viable, and economically productive basis;

(iii) support the development of policies, rules, process, criteria, and supporting documentation appropriate for procuring, contracting, and managing PPPs through competitive bidding or other contracting modalities, founded on the principles of good financial management;

(iv) work includes pre-qualification criteria (e.g., know your-client standards, organization, and litigation), request for proposal (RFP) elements, model concession agreements, and project contracts;

(v) advise the government regarding the principles of government guarantees and direct agreements that may be needed to support PPP financing; and

(vi) work with the private sector entities which are involved in input supply (including consumable and capital items) to farmers and the provision of credit to farmers/farmer groups/cooperatives to develop workable and practical PPP’s between the private entity, the farmers and the DOA/AMD, the latter to provide, if necessary, oversight to ensure correct procedures and standards are followed.

45. Information System Development Specialist (International) – 16 person months The Specialist will have at least 5 years practical work experience and be tasked to:

(i) working with the project stakeholders, farming communities, government and private sector review and determine the requirements for a user friendly Marketing Information System, taking into account the need for information to be provided on both inputs and outputs for the various value chains common the crop and livelihood systems in the CDZ;

(ii) develop a web-based, high tech software interface and computer database accessible through SMS and internet, including remote entry of data by approved sources, e,g, price and market data from Chambers of Commerce, that can be easily used to inform the various stakeholders in the agricultural sector;

(iii) work with web-based service providers to provide inter-active services covering short messages as well as web-based information and training materials on Good Agricultural Practices, input availability, value chain opportunities;

(iv) monitor developments in the availability of radio programmes/sponsorship for the project to broadcast news, technical and market information related to project activities;

(v) install the IS software on IT equipment located at district and township levels with government and private organizations accessible to the public;

(vi) conduct a series of training workshops for the stakeholders at various levels to ensure that they are full conversant with the IS and are able to utilize its full potential;

(vii) ensure through a public awareness campaign that the concerned stakeholders in the private sector are informed of the system; and

(viii) through oversight ensure that the information in the system is regularly updated, and where output market information on commodity prices is updated on a daily basis, working with Chambers of Commerce and other information sources.

Annex 2 79

1. Deliverables

46. Deliverables will include: (i) Inception Report – within 3 months of mobilization – presenting approach to

tasks and reporting, with details of how each task will be performed, identifying what resources will or may be required, and issues to be addressed by the PMU.

(ii) Quarterly Progress Reports (QPRs) – brief summary of activities undertaken in the quarter, highlighting progress, issues to be addressed and programme for the following quarter.

(iii) Annual reports – summarising progress in all aspects of the irrigation component, highlighting activities undertaken in the quarter, progress, issues to be addressed and update programme for the component.

2. Client’s Input and Counterpart Personnel

47. Services, facilities and property to be made available to the Consultant by the Client:

(i) All available project reports and data.; (ii) Office space with furniture and office equipment at Naypyitaw (iii) Counterpart staff to work closely and full time with the consultants on all aspects;

and (iv) Vehicles.

80 Annex 3

DESIGN AND MONITORING FRAMEWORK

Impacts the Project is Aligned With:

Food security for domestic consumption and higher nutritional value by all citizens attained. Socioeconomic status of rural people through increased agricultural productivity enhanced.

Quality and standard of agricultural products to compete in international markets improved. (Agriculture Sector Second Five-Year Plan (2016/2017-2020/2021.)

a

Results Chain Performance Indicators with Targets and

Baselines

Data Sources and Reporting Mechanisms Risks

Outcome

Income increased and poverty reduced for rural populations in the project areas

a. Net financial returns to farmers per planted ha increased by 380% to MK889,600/ha at 2016 prices by 2026 (2016 baseline: MK75,000)

b. Poverty incidence in project areas reduced to less than 25% by 2026 (2016 baseline: 52%)

b

a–b Project monitoring system, DOA records, ADB mission reports

The government fails to sustain the reform processes related to inputs, farming, and post-harvest markets.

MOALI and farmers fail to properly operate and maintain the rehabilitated infrastructure.

Outputs 1. Effective agricultural value chains in oilseeds, pulses, and horticultural crops developed

1a. Two frontline centers established at the district level and six satellite frontline centers at the scheme- or township-level by 2019 to promote value chain development(Baseline: no frontline centers)

1b. At least 30% of frontline center management at the district and scheme- or township-level being women (Baseline: no frontline centers)

1a–1d Project monitoring system, IWUMD records, DOA records, ADB mission reports

Farmers do not execute changes in farming systems or water management.

1c. Diversified non-paddy cropping (oilseeds, pulses, and horticultural crops) comprise 57% of irrigated areas and 36% of non-irrigated areas by 2023 (2016 baseline: 45% of irrigated area and 33% of non-irrigated area)

1d. Extension of good agricultural practices and climate-smart agriculture provided to 42,000 farmers by 2023, of whom 30% are women.

2. Reliability of agricultural water supplies improved and irrigated area increased

2a. Intensity of cultivation on 20,000 ha increased by 10% in project systems by 2023 through repair of canals, improved cross drainage, provision of control structures, and use of better operating procedures (2016 baseline: cropping intensity of 110%)

2b. Approximately 25,000 tons of CO2 equivalent per year reduced as a result of improved reservoir operations and management. (2016 baseline: average emissions of 225,000 tons of CO2 equivalent per year in the project areas)

2c. At least 30% of unskilled laborers engaged in construction of irrigation facilities are women at all times during project implementation. (Baseline: no construction started)

2a–2d Project monitoring system, IWUMD records, DOA records, ADB mission reports

Not enough data is available for design subproject civil works.

Financial management and procurement systems for the project are slow and/or ineffective.

2d. Irrigation management improved through:

(i) the preparation of new system operation manuals for each scheme rehabilitated (2016 baseline: no manuals);

Annex 3 81

Results Chain Performance Indicators with Targets and

Baselines

Data Sources and Reporting Mechanisms Risks

(ii) the training of 120 IWUMD staff members and 900 leader farmers (including 30% women) in tertiary and field-level water management (2016 baseline: no training); and

(iii) the organization of these leader farmers into gender-sensitive WUGs

c by 2023 (with

at least 30% female membership of the WUG committees) (2016 baseline: No WUGs; female participation in irrigation management at 20%

d)

2d. Annual O&M plan prepared and O&M funds allocated by the government for main and distributary canals and reservoirs in project areas by 2020/ (2016 baseline: no register of assets or asset condition, no systematic O&M plan, ad hoc budget allocations for systems’ O&M)

Key Activities with Milestones

1. Effective agricultural value chains in oilseeds, pulses, and horticultural crops developed

1.1 Undertake Yamethin district activities.

1.1.1 Establish and operate hub frontline center and Chaungmagyi satellite frontline center by Q4 2017. 1.1.2 Commence studies of value chains and inputs and design information system by mid-2017. 1.1.3 Complete five participatory value chain studies by the end of 2018 and 10 by the end of 2020. 1.1.4 Field trials and at least two demonstration plots on climate-smart agriculture established by the end of 2019. 1.1.5 Establish and operate second satellite frontline center by mid-2019.

1.2 Undertake Magway District activities.

1.2.1 Establish, equip, and staff hub frontline center by the end of Q3 2017. 1.2.2 Operate two Natmauk satellite frontline centers by mid-2018. 1.2.3 Commence studies of value chains and inputs and design information system by mid-2017. 1.2.4 Complete five participatory value chain studies by the end of 2018 and 10 by the end of 2020. 1.2.5 Field trials and at least two demonstration plots on climate-smart agriculture established by the end of 2019. 1.2.6 Establish and operate third satellite frontline center by mid-2019. 1.3 Undertake Shwebo District activities.

1.3.1 Establish, equip, and staff hub frontline center by the end of Q3 2017. 1.3.2 Operate two satellite frontline centers by mid-2018. 1.3.3 Commence studies of value chains and inputs and design information system by mid-2017. 1.3.4 Complete five participatory value chain studies by the end of 2018 and 10 by the end of 2020. 1.3.5 Field trials and at least two demonstration plots on climate-smart agriculture established by the end of 2019. 1.3.6 Establish and operate third satellite frontline center by mid-2019.

2. Reliability of agricultural water supplies improved and irrigated area increased

2.1 Carry out Chaungmagyi modernization.

2.1.1 Mobilize contractor for Chaungmagyi subproject by Q2 2017 and complete works by the end of 2020. 2.1.2 Plan and build capacity for improved management and O&M during Q1 2017–Q4 2018. 2.1.3 Establish WUGs, develop asset management plan, and build capacity during Q1 2020–Q4 2022.

2.2 Carry out Natmauk modernization.

2.2.1 Complete detailed designs for subproject in Magway district by the end of Q1 2018. 2.2.2 Mobilize contractor for subproject by Q1 2019 and complete by the end of 2021. 2.2.3 Plan and build capacity for improved management and O&M during Q3 2017–Q4 2019. 2.2.4 Establish WUGs, develop asset management plan, and build capacity during Q1 2021–Q2 2023.

2.3 Carry out subsequent modernization packages in Magway, Mandalay, and Shwebo districts.

2.3.1 Complete feasibility studies by the end of 2017.

82 Annex 3

2.3.2 Complete detailed designs by the end of Q1 2019. 2.3.3 Mobilize contractors for second packages by Q1 2020 and complete by the end of 2022. 2.3.3 Plan and build capacity for improved management and O&M during Q3 2018–Q4 2020. 2.3.4 Establish WUGs, develop asset management plan, and build capacity during Q1 2022–Q2 2023. Project Management Activities

Advance actions for recruitment of PMU staff begins in Q4 2016, and key staff in place by Q1 2017 Office refurbished, furnished, and equipped; and vehicles procured by the end Q1 2017 Financial, procurement, and monitoring and evaluation systems set up by end of Q2 2017 and PMU fully operational

Inputs

Asian Development Bank: $75.0 million loan Government of Myanmar: $3.44 million (taxes and duties)

Assumptions for Partner Financing

AFD in an amount of €25.0 million ($27.9 million equivalent) – approved by AFD on 20 October 2016 e

EU under the AsIF of up to €20.0 million ($22.3 million equivalent) – approved by EU-DCI on 27 September 2016

ADB = Asian Development Bank; AFD = Agence Française de Développement; ASIF = Asian Investment Facility; DCI = Development Cooperation Instrument; DOA = Department of Agriculture; EU = European Union, ha = hectare; IWUMD = Irrigation and Water Utilization Management Department; MOALI = Ministry of Agriculture, Livestock, and Irrigation; O&M = operation and maintenance; PMU = project management unit; Q = quarter; WUG = water users’ group. a Government of Myanmar, MOALI. 2016. Agriculture Sector Second Five-Year Plan (2016/2017–2020/2021).Nay

Pyi Taw. b Based on survey data applying the United Nations Development Programme 2009–2010 poverty line income

required per adult equivalent, value updated to 2016 based on the World Bank inflation data. c

The process of the establishment of WUGs will involve deliberate and systematic consultations with women to ensure that their requirements are appropriately reflected in the structure and functioning of these groups.

d Based on surveys in Chaunmagyi and Natmauk irrigation systems.

e Subject to confirmation based on loan negotiations with the Government.

Source: Asian Development Bank.