project administration memorandum - asian development bank€¦ · this document, however, may not...

Project Administration Memorandum

The project administration memorandum (PAM) is an active document, progressively updated and revised as necessary, particularly following any changes in project or program costs, scope, or implementation arrangements. This document, however, may not reflect the latest project changes. This PAM should be read along with the Report and Recommendation of the President (RRP), and the Grant and Project Agreements dated 23 February 2007. This PAM incorporates agreements reached between SANS and the Executing Agency at the Project’s inception in May 2008. In case of discrepancy, the Grant Agreement shall prevail.

Project Number: 34308 Grant Number: 0063 June 2008

NEP: Commercial Agriculture Development Project

CURRENCY EQUIVALENTS (as of 13 June 2008)

Currency Unit – Nepalese rupee (NRe/NRs) NRe1.00 = $0.01459 $1.00 = NRs68.528 (i) The Nepalese rupee is pegged to the Indian rupee (Re) at NRs1.60 to Re1.00

and is fully convertible on all current account transactions. (ii) For cost calculations, the prevailing exchange rate ($1.00 = NRs73.74) during the

Project’s Appraisal Mission was used.

ABBREVIATIONS ADB – Asian Development Bank CAA – commercial agriculture alliance CAF – commercial agriculture fund DDC – district development committee DOA – Department of Agriculture EDR – Eastern Development Region HVC – high-value crop JFPR – Japan Fund for Poverty Reduction M&E – monitoring and evaluation MOAC – Ministry of Agriculture and Cooperatives NGO – nongovernment organization PMU – project management unit PSC – project steering committee VDC – village development committee

NOTES (i) The fiscal year (FY) of the Government and its agencies ends on 15 July. (ii) In this report, "$" refers to US dollars.

CONTENTS Page MAP ii GRANT PROCESSING HISTORY iii DESIGN AND MONITORING FRAMEWORK iv-vii I. PROJECT DESCRIPTION 1 A. Project Area and Location 1 B. Impact and Outcome 1 C. Outputs 1 D. Special Features 6 II. COST ESTIMATES AND FINANCING PLAN 7 A. Cost Estimates 7 B. Financing Plan 7 C. Allocation of Grant Proceeds 8 III. IMPLEMENTATION ARRANGEMENTS 9 A. Executing and Implementing Agencies 9 B. Project Management Organization 9 IV. IMPLEMENTATION SCHEDULE 10 V. CONSULTANT RECRUITMENT 11 VI. PROCUREMENT 12 VII. DISBURSEMENT PROCEDURES 12 VIII. PROJECT MONITORING AND EVALUATION 13 IX. REPORTING REQUIREMENTS 13 X. ACCOUNTING AND AUDITING 14 XI. MAJOR GRANT COVENANTS 14 XII. KEY PERSONS INVOLVED IN THE PROJECT 14 XIII. ANTICORRUPTION 16 XIV. OTHER MATTERS 17 APPENDIXES 1 Commercial Agriculture Alliance and Commercial Agriculture Fund 2 Partnerships with Nongovernment Organizations 3 Selection Process and Criteria for Service Providers 4 Detailed Cost Estimates 5 Implementation Schedule 6 Detailed Terms of Reference of Consulting Services and

Procedures for Selecting Consultants

7 Procurement Plan 8 Procurement Methods for Goods/Supply Contracts 9 Disbursement Letter 10 Executing Agency’s Project Progress Report 11 Proforma for Preparing the Project Completion Report 12 Major Covenants 13 Complaint Redressal Mechanism of CAA 14 Gender Action Plan 15 ADB Documents Relevant to Project Administration

GRANT PROCESSING HISTORY

Milestone Date a. Approval of preparatory technical assistance 28 October 2002 b. Final report 17 December 2003 c. Fact-finding 2-14 February 2004 d. 1st Consultation 14-17 September 2004 e. 2nd Consultation 11-16 April 2005 f. 3rd Consultation 15-17 March 2006 g. Management review meeting 28 July 2006 h. Appraisal mission 7-18 August 2006 i. Staff review committee meeting 14 September 2006 j. Grant negotiations 16-17 October 2006 k. Board circulation 26 October 2006 l. Board consideration and approval 16 November 2006 m. Grant and Project Agreements signing 23 February 2007 n. Loan effectiveness - Actual 6 August 2007 Original due date: 24 May 2007 First extension: 7 July 2007 Second extension: 7 August 2007 Conditions: (i) Establishment of the Project Steering

Committee

(ii) Appointment of the Project Manager (iii) Appointment of the CAA General

Manager and Company Secretary

o. Physical completion date 31 December 2012 p. Grant closing date 30 June 2013

iii

DESIGN AND MONITORING FRAMEWORK

Design Summary

Performance Targets/Indicators Data Sources/Reporting

Mechanisms

Assumptions and Risks

Impact Reduced poverty in the rural communities of 11 districts in the Eastern Development Region (EDR) of Nepal through equitable and sustainable commercialization of agriculture

• Rural poverty in the EDR

reduced from 44% to 40% by 2020

• Reports of the Nepal

Central Bureau of Statistics

• Survey of project area households

Assumptions • No extension of the

previous conflict situation

• Large household surveys undertaken

Outcome Improved efficiency of marketing and processing high-value crops (HVCs) such as vegetables, fruits, tea, and spices in the EDR

• Improved quantity, quality,

regularity, and value of HVCs in response to market demand, and public health and environmental requirements

• Public and private investments in HVC marketing and processing increased incrementally

• Annual growth rate in HVCs increased from 5.6% to 6.5% by project completion

• HVC exports to India increased by 16% by project completion

• Project results-based

monitoring • Project socioeconomic

surveys of farmers, traders, and processors’ margins and trends

• National accounts • Project quarterly and

annual progress reports

• Project completion report

Assumption • No serious

macroeconomic crisis Risks • Market fluctuations • Natural disasters such

as flooding and landslides

Outputs 1. Increased public and

private investment in commercial agriculture

1.1 Establishment of the

commercial agriculture alliance (CAA)

• The CAA has at least 160

general members by project completion

• The CAA has balanced membership composition covering all districts and areas within a district; working on all potential commodities; and including farmers groups/cooperatives, traders, processors, and women

• CAA annual general meetings and district meeting held

• CAA membership

record • Project results-based

monitoring • Project management

unit (PMU) quarterly and annual progress reports


Assumptions • Commercial agriculture

stakeholders perceive that the CAA can play a meaningful role

1.2 Community-based market infrastructure investments

• At least 50 market infrastructures developed by project completion

• The supported subprojects include small collection centers, small markets, small suspension bridges, small cool or cold storage, and farm-to-market road improvement

• Farmer communities managing

• Project results-based monitoring

• CAA records of number of applications made, number approved, and type of subproject funded

• District development committee (DDC) and community records of

• Communities have the ability and support to identify subproject investments

• The DDC is effective in screening and prioritizing community-based proposals

• The DDC has capacity to supply needed

iv

Design Summary


Mechanisms


and maintaining the market infrastructure

subprojects and level of use and

technical services to communities

maintenance • Project socioeconomic

surveys of product throughout or delivery via the improved market infrastructure

1.3 Noninfrastructure investments add value to agriculture products

• At least 200 subprojects implemented by project completion

• The supported subprojects include HVC promotion; quality control; equipment for product testing; and agroprocessing technology, equipment, and machinery

• At least 10 commercial agriculture promotional and representational activities launched by project completion

• The supported promotional and representational activities include trade fairs, intellectual property right protection, product labeling and certification, and industry networking


• CAA records of number of applications made, number approved, and type of subproject funded

• PMU quarterly and annual progress reports


• Records of chambers of commerce

• CAA general members identify subproject investments with public good content.

2. Inclusion of poor and semi-commercial stakeholders in commercial agriculture

2.1 Development of

subsistence stakeholders

• 14 nongovernment

organizations (NGOs) with association of local NGOs enter into partnership with the Project and work with subsistence stakeholders

• 24 HVC production areas and marketing points identified by 2008

• 15,000 subsistence households assisted on HVC income generation activities by project completion

• 800 primary farmer groups formed and undertaking basic marketing training by project completion

• 5,000 landless undertaking skill-based training, and 1,000 obtaining jobs

• NGO reports on

implementation • Project results-based

monitoring • PMU quarterly and

annual progress reports


Assumptions • Local NGOs prepared

to adopt a marketing focus and develop their capacities

• Local NGOs sustain high standard of delivery services

• Subsistence farmers perceive the benefits of HVCs and are not deterred by the risks

• Local employment in processing and marketing available for the landless once trained

• • •

v

Design Summary


Mechanisms


2.2 Enhancement of semi-commercial stakeholders

• Seven NGOs enter into partnership with the Project and work with semi-commercial stakeholders

• Farmer groups graduate to marketing groups, associations, and cooperatives

• 120 marketing groups strengthened in accounting, bookkeeping, and group management; and immersed in marketing and agribusiness concepts

• At least 1,800 stakeholders adopt quality improvement methods by project completion

• Strengthened farmer groups/ cooperatives assisted to apply for CAA membership

• NGO reports on implementation




• NGOs sustain high standard of delivery services

• Marketing groups take a more active role in market development

2.3 Promotion of social inclusiveness among commercial stakeholders

• Service providers contracted with the Project on demand

• 750 commercial stakeholders receive awareness training in social, gender, and environmental issues

• Social inclusive behavior reflected in investments financed by the Commercial Agriculture Fund




• Service providers sustain high standard of delivery services

3. Timely availability of market information to farmers

• Farmer group and cooperative-based market information systems and network established and operational

• Farmer groups assisted in operating and maintaining the market information system

• Consolidated district data systemized, disseminated, and integrated with centralized systems

• Mass media releases reach wide audience of beneficiaries




• Records of farmer groups and cooperatives

• Agro Enterprise Center records

• Department of Agriculture (DOA) marketing division records

Assumption • Farmer groups are

able to obtain and disseminate market information

4. Enhanced capacity of project partners in supporting farmers

• 25 project standardization training courses on project details and cross-cutting values to all partners

• 42 basic marketing development training courses to all partners

• 24 training courses to strengthen partner NGOs on social mobilization, organizational growth,




• Project training records • Beneficiary feedback

Assumptions • Effective training is

provided • Project partners

respond to training in delivery of market-oriented programs

vi

Design Summary


Mechanisms


beneficiary monitoring, public auditing, and accounting

• 54 advanced training courses to DOA staff on products and product development, market-chain development, NGO orientation, and market and price analysis

• 33 training courses to strengthen CAA district staff on investment analysis, project appraisal, and management

Activities with Milestones 1. Establish the project steering committee by January 2007. 2. Recruit the international team leader and national deputy team leader as individual

consultants by February 2007. 3. Recruit the other consultants by April 2007. 4. Establish complaints redressal mechanism by April 2007. 5. Prepare project implementation guidelines on various subprojects by May 2007. 6. Finalize (by consultants) detailed subproject selection criteria by May 2007. 7. Conduct baseline survey by July 2007. 8. Conduct product chain studies by July 2007. 9. Establish results monitoring framework by October 2007. 10. Install notice boards regarding services available and the procedure, timing, and contact

for obtaining the services by June 2007. 11. Establish project website by June 2007. 12. Fully staff the CAA and district branches by May 2007. 13. Begin dissemination of information aimed at balanced CAA membership in May 2007. 14. Contracts for community-based market infrastructure investment with the DDCs and

implementation by January 2008. 15. Contracts for noninfrastructure investment with CAA general members and implementation

by January 2008. 16. Finalize partnership agreements with NGOs by June 2007. 17. Identify HVC production areas and marketing points by July 2007. 18. Begin assistance on production and marketing of off-season vegetables and HVCs by July

2007. 19. Begin farmer groups on marketing by July 2008. 20. Begin skills-based training for the landless in transport, packaging, production, primary

processing, tool making, and servicing by July 2007. 21. Begin strengthening semi-commercial stakeholder groups in accounting, bookkeeping, and

group management by October 2007. 22. Assist strengthened farmer groups in applying for CAA membership and preparing

subprojects on community-based market infrastructures by July 2009. 23. Provide awareness training to commercial stakeholders on social, gender, and

environmental issues and responsibility by July 2007. 24. Begin establishing an integrated market information system by October 2007. 25. Begin project standardization training on project details and cross-cutting values to all

partners by May 2007. 26. Begin basic marketing development training to all partners by July 2007. 27. Provide training for partner NGOs on various topics including social mobilization by July

2007. 28. Provide training for DOA staff on various topics of commercial agriculture by July 2007. 29. Provide training for CAA district branch staff on subproject proposal evaluation and other

topics by July 2007.

Inputs ADB: $18.0 million equivalent Government: $0.8 million equivalent CAA general members: $4.0 million equivalent DDC: $0.8 million equivalent Farmer community: $0.5 million equivalent

I. PROJECT DESCRIPTION A. Project Area and Location 1. The Project covers 11 districts in the Eastern Development Region (EDR) of Nepal, including 5 hill districts (Dhankuta, Ilam, Panchtar, Terhathum, and Udayapur), 5 terai (lowland) districts (Jhapa, Morang, Saptari, Siraha, and Sunsari), and 1 mountain district (Taplejung) (see Map). B. Impact and Outcome 2. The Project will result in reduced poverty in rural communities of the 11 EDR districts through equitable and sustainable commercialization of agriculture. The outcomes of the Project will be improved efficiency of marketing and processing of high-value crops (HVCs), such as vegetables, fruits, tea, and spices in the EDR. The Project will increase (i) employment in rural areas, (ii) value added of agriculture products, and (iii) rural incomes. C. Outputs 3. The project outputs include (i) increased public and private investment in commercial agriculture, (ii) inclusion of poor and semicommercial stakeholders in commercial agriculture, (iii) timely availability of market information to farmers, and (iv) enhanced capacity of project partners in supporting farmers. The outputs will be delivered through five components.

Component 1. Commercial Agriculture Investment and Management 4. The Project will facilitate key agricultural stakeholders (farmers, traders, and processors) to work together to increase commercialization in agriculture. This will be done by establishing a commercial agriculture fund (CAF), a cost-sharing grant facility, to (i) develop community-based market infrastructure investments, and (ii) develop noninfrastructure investments to add value to agriculture products. Commercial Agriculture Alliance (CAA), a not-for-profit company registered under the Companies Ordinance on 28 September 2006, has been established to manage the CAF, and more importantly to facilitate subproject linkages and the networking of agricultural stakeholders within the project area. 5. The CAA will have two categories of membership: (i) general members comprising farmer groups and cooperatives, traders, and processors engaged in commercial agricultural activities within the project area; and (ii) nominated members comprising the Ministry of Agriculture and Cooperatives (MOAC), Ministry of Local Development, district development committees (DDCs) of the 11 project districts, and the Agro Enterprise Center1 of the Federation of Nepal Chambers of Commerce and Industry. 6. To encourage more balanced membership composition in the CAA and to encourage more balanced CAF investments by CAA general members, CAA will utilize

1 The Agro Enterprise Center is the technical wing of the federation, which deals with agribusiness

development and promotion in Nepal.

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mass media (newspaper, radio,2 and television), trade fairs, and brochures for targeted information dissemination by (i) district (to ensure CAA general member representation from all districts); (ii) locations in a district (to ensure CAA general member representation from different locations within a district); (iii) commodity type (to encourage investment in all potential commodities for agribusiness, not only one or two); and (iv) stakeholders (to ensure farmer groups and cooperatives, traders, and processors are all represented in the CAA). 7. The CAA will have an elected board of directors and a management team headed by a general manager assisted primarily by a company secretary, chief accountant, compliance officer, and other necessary support staff. The CAA will have a branch in each of the 11 project districts, headed by the branch manager assisted by a finance and administration officer, a monitoring and evaluation (M&E) officer, and other support staff. The target is that women make up 20% of CAA management. Appendix 1 provides more information on the CAA, its management structure, and membership criteria. The Project will finance CAA staff salaries, operating expenses, annual general meetings and district meetings, and external auditing during project implementation. 8. The Project, through CAF, will finance (i) community-based market infrastructure investments, and (ii) noninfrastructure investments. Only the general members of the CAA and DDCs within the project area will be eligible to receive financing. To receive CAF financing as a grant on a cost-sharing basis, the proposed investment must (i) incorporate public good content, (ii) add value to agricultural products, (iii) benefit other agricultural stakeholders and the community as a whole, (iv) improve market-chain efficiency, and (v) provide a strong demonstration impact for the community. The CAF will be utilized during project implementation and will lapse on its completion. The methodology for the processing of CAF applications is also given in Appendix 1. 9. Community-Based Market Infrastructure Investments. Only the DDCs are eligible to apply for community-based market infrastructure investments. Farmer communities, through their village development committee (VDC), will identify needs in a participatory manner, and the DDCs will screen VDC requests before submitting the proposal to the CAA to ensure (i) no duplication with other development programs in the district, and (ii) adequate appraisal of the technical and financial feasibility of the proposal. In this type of investment, the CAF will finance a maximum of 75% of the investment cost, with the community providing a minimum of 10% of the investment cost in the form of labor and in-kind contributions. The DDC will finance the remaining 15% of the investment cost in the form of technical services, field appraisal, and assessment. The range of community-based investments will include small collection centers, small markets, ropeways, small suspension bridges, farm-to-market road improvement including culverts and swing bridges, small-scale cool or cold storage, and small-scale marketing-related water supply. The VDCs and farmer communities assisted by the DDC district technical office will be responsible for construction, management, and maintenance of the infrastructure. 10. Noninfrastructure Investments. The CAF will provide financial assistance for noninfrastructure investments of farmer groups and cooperatives, traders, and processors, which are the general members of the CAA. For this type of investment, the 2 The radio station in Biratnagar has wide coverage in EDR.

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CAF will finance a maximum of 50% of the investment, with the remaining to be contributed by the direct beneficiaries. The investments could include (i) seed and fertilizer for HVC3 and emerging crop4 promotion; (ii) pesticide and pest management including integrated pest management techniques; (iii) farm machinery and equipment; (iv) greenhouse equipment; (v) agroprocessing equipment and machinery; (vi) laboratory equipment for product testing and quality control; (vii) local transport such as pushcarts, trishaws, oxcarts, and pack animals; and (viii) market-related research and technology development such as pickle making, fruit or vegetable drying or preservation, tomato pulp making, crop diversification into emergent HVCs, and farm-to-market packaging systems. 11. Other noninfrastructure investments by CAA general members include launching promotional and representational activities such as (i) trade fairs and trade promotion; (ii) industry networking on issues requiring joint action for resolving cross-border issues and reducing local red tape; (iii) product labeling and certification arrangements; (iv) product identification, branding, and feasibility studies; (v) quality mark initiatives; (vi) brand and intellectual property right protection; and (vii) specialized skill development and employment strategy formulation.

Component 2. Inclusive Development of Stakeholders 12. This component will (i) assist small, marginal farmers within the project area to develop or participate in income-generating agricultural activities and undertake more commercial activities; (ii) strengthen stakeholders (farmers, traders, processors) already partly engaged in commercial agriculture to become fully commercial and eligible for CAA membership; and (iii) promote social inclusiveness and environmental responsibility among commercial CAA members. This component will also develop marketable skills of the poor and landless, who may then be employed by CAA members. This component is closely linked with component 1 (commercial agriculture investment and management) as the CAF investments will address and reinforce social inclusion and assist subsistence stakeholders to raise their commercial status. This will be accomplished by developing community-based market infrastructure, providing catalytic investments that will benefit subsistence stakeholders, and implementing the whole range of CAA activities that promote backward and forward linkages.

a. Development of Subsistence Agricultural Stakeholders 13. The Project will support subsistence stakeholders5 to take a more active role in commercial agriculture activities They will be supported through interventions on (i) group formation;6 (ii) identification of existing and potential HVC production areas and marketing points; (iii) vocational and technical training on producing identified off-season vegetable and HVCs; (iv) capacity building in market awareness (quality and supply requirements, price bargaining); and (v) networking of farmer groups with other agricultural stakeholders including input (seed, fertilizer, machinery) suppliers, traders,

3 Including cabbage, cardamom, carrots, cauliflower, ginger, herbs, honey, mushrooms, tea, and tomato;

and fruits such as citrus, mango, lychee, papaya, and pineapple. 4 Examples include onion, garlic, gherkin, herbs, and essential oils. 5 The stakeholders consist of (i) farmers with small areas of land who produce only for their own family

needs and have no meaningful surplus for sale, and (ii) the landless who participate in agriculture-related activities.

6 Activities include awareness campaigns on social equity issues, proposed project interventions, group formation and group management skills training, and identification of development opportunities.

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processors, and public and private service providers including DOA, research institutions, and rural financial institutions. In forming farmer groups, the Project will promote mixed or women-only groups to enhance the participation of women. An associated Japan Fund for Poverty Reduction (JFPR) grant will provide the needed seed capital, materials, and equipment to the subsistence stakeholders.7

14. The landless will be provided with skill-based training in areas such as transport (construction, repairs or ownership of rickshaws, bicycles, or oxcarts), packaging (weaving of baskets for transport), production (on-farm labor), primary processing (product washing and drying), tool making, and servicing (repair of small equipment). They will also benefit from employment opportunities generated from investments made under component 1. 15. The Project will engage NGOs that are well established in the project area, accepted by the communities, and have a track record of assisting socially excluded people to deliver these activities. The Project will enter into partnership arrangements with the selected NGOs. Depending upon the existing skill mix of partner NGOs and types of support needed, the Project may engage more than one partner NGO in the same district but in separate locations or on different tasks. The use of local NGOs will contribute to sustainability, decentralization, and local acceptance/ownership of activities supported by the Project. Appendix 2 discusses the principles, procedures, and criteria for NGO partnership.

b. Enhancement of Semi-Commercial Agricultural Stakeholders 16. For stakeholders involved in more than subsistence agriculture but not commercialized enough to be CAA members, the Project will help them move to higher commercial status and develop their eligibility for CAA membership. The specific activities will be to help (i) form farmer groups into community umbrella groups, associations, or cooperatives with a market development focus; (ii) strengthen existing semicommercial agricultural stakeholder groups in accounting, bookkeeping, and group management; (iii) build market-chain awareness and linkages; (iv) improve quality assurance systems (hygiene, handling, packaging, transport); (v) upgrade primary processing technology, e.g., grading, processing, packaging, and quality assurance for specific products; and (vi) train on entrepreneurship development and business planning, and price and contract negotiations. Strengthened farmers groups and cooperatives will be assisted to apply for CAA membership. The Project will engage NGOs to deliver these activities using the same arrangement as under subcomponent 2.a.

c. Promotion of Social Inclusiveness among Commercial Agricultural Stakeholders

17. The Project will provide commercial agricultural stakeholders with awareness training on (i) social issues, such as economic opportunities for inclusion of the poor and disadvantaged; (ii) gender issues; and (iii)

7 ADB, 2006. Grant Assistance to the Government of Nepal for Improving the Livelihoods of Poor Farmers

and Disadvantaged Groups in the Eastern Development Region. Manila. This JFPR grant is targeted toward equal participation of socially and economically excluded groups and vulnerable people such as marginal farmers, the landless, dalits (untouchable castes) and ethnic minorities. The grant will provide seed funding and seed packages to subsistence stakeholders in all 11 project districts to enable them to participate in meetings; group activity processes; capacity building; and purchase of small items, equipment, or materials to help them enter into commercial activities.

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environmental issues and responsibility. This training will support incentives provided to CAA members to engage in socially inclusive behavior, since to obtain financial assistance under the CAF, their applications must contain a clear description of how their investment will (i) add value to the product, (ii) add value to market linkages to the farmer, (iii) provide opportunities of employment for landless and others, and (iv) benefit the process of commercialization as a whole. The training will be provided by selected service providers such as the Agro Enterprise Center and chambers of commerce. Appendix 3 discusses the selection process and eligibility criteria for service providers.

Component 3. Market Information Dissemination 18. The availability of critical timely information to farmers minimizes their risks, maximizes opportunities, and enables them to move on a more equal footing. This component will establish an integrated market information system with multiple users to address the current imbalance in market information sharing and enhance transparency within the agriculture value chain. 19. The Project will assist farmer groups through partner NGOs and district agriculture development offices to systemize and replicate group or cooperative-based information systems, throughout the project area. Activities include (i) development, installation, and training in market information sharing system for farmer marketing groups; (ii) networking these systems to other market information systems; and (iii) collecting and disseminating information on the demand, price, and expected delivery time disaggregated by product type and grade at various accessible markets in Nepal and neighboring countries, particularly in Bangladesh and India. Data to be collected on local, regional, and international markets will include information on contract production systems, specialization, value-adding activities, crop varieties and production systems, and processing technologies. The Project will support the dissemination of market information, and notification of market trends and events through mass media. The Project will also provide training and equipment.

Component 4. Project Partners Capacity Enhancement 20. This component will build the capacity of project partners including DDCs, NGOs, DOA district staff, and CAA district branch staff to address the specific needs of each project partner in order to be able to contribute significantly to the Project’s impact.8 The specific activities under this component that will be applicable to all the project partners are (i) project standardization training to provide a complete understanding of the Project, its components and activities, and importantly its cross-cutting values regarding equity, gender, partnership, participation, and environmental sustainability; and (ii) basic marketing development training on postharvest, marketing, market-chain improvement, product handling, and agribusiness. 21. Partner NGOs will be strengthened in social mobilization, group formation and organizational growth, beneficiary monitoring and public auditing, office administration, and accounting. DOA staff will receive more advanced training on products and product development, market-chain development and innovation, primary processing methods, organizational development (companies, cooperatives, networking associations, and

8 Experience in Nepal indicates that unless the capacity of all stakeholders within the project framework is

developed concurrently, development activities will be unbalanced and placed at risk by the least capable partners.

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federations), entrepreneurship and NGO orientation, market information systems, and price analysis. The goal is for DOA staff to be market oriented with stronger capacity to support farmers and NGOs, and to be able to liaise more effectively with processors and traders. CAA district branch staff will specifically be strengthened in investment analysis, project appraisal, and management of meetings to help them meet their responsibilities for CAA activities and review of proposals for CAF funding.

Component 5. Project Implementation Support 22. The Project will be implemented and activities will be managed by a project management unit (PMU) and the CAA. The PMU will have planning, procurement, accounting, and M&E capacity, with M&E staff assigned special duties relating to governance and social inclusion. Consulting services, physical facilities, and transport will be provided to the PMU and CAA to support project supervision, management, and capacity building. The Project will install notice boards to provide information on services available and the procedure, timing, and contact person for obtaining the services. The Project will also establish a website to (i) provide project implementation information including information related to component 1; and (ii) track procurement contract awards, including amount, and basic information on the processes adopted, and list of goods or services purchased and their utilization. 23. Assisted by the consultants, the PMU will carry out (i) a baseline survey on beneficiary situations, (ii) product and market-chain analysis at the start of the Project, and (iii) annual socioeconomic studies that focus on evaluating the project benefits and impacts on poverty reduction. All project staff and consultants will be required to undertake the project standardization training provided to project partners, and to include an assessment of achievement of the values on equity, partnership, participation, and gender in their regular project reporting. D. Special Features 24. Marketing and Processing. A significant feature of this Project is that it focuses on agriculture marketing and processing, and on improving the efficiency of the value chain between farmers and consumers. This makes the Project significantly different from previous agriculture projects, which focused on production and extension services. 25. Market-Chain Linkages. The Project has a two dimensional thrust: (i) to develop farmers’ capability so that they are more effective and influential in reaching up the market chain, and (ii) to work with private sector processors and traders to improve their efficiency and to develop linkages to farmers. Development of these linkages and increased transparency of activities within the market chain are key features of the Project. 26. Demand- and Stakeholder-Driven. As compared to most past approaches to agriculture development in Nepal, the project activities, including CAF investments, social inclusiveness initiatives, market information dissemination, and capacity enhancement of project partners, will be largely shaped in response to demands, capacities, and constraints of the project beneficiaries, and market opportunities for commercial agriculture development. 27. Socially Inclusive Participation. The Project contains a package of activities aimed at the poor and disadvantaged to move them out of poverty and allow them to

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participate in commercial agriculture. Strengthening effective and equitable linkages between stakeholders in the market chain to increase farmer returns and improve the efficiency of marketing is largely a new area of activity. The Project provides assistance for those wanting to become more equal and effective partners in marketing their products. The focus is on HVCs, which potentially offer high returns to farmers and significant employment generation relevant for the landless poor who engage in agricultural wage labor. Cross-cutting values on equity (equal sharing in participation and benefits), gender equality, participatory practices and processes, fairness in dealings between stakeholders, and public-private partnerships are built into the project design, and will affect consultant selection, staff selection, and all aspects of project implementation. II. COST ESTIMATES AND FINANCING PLAN A. Cost Estimates 28. The Project is estimated to cost $24.1 million, including taxes and duties of $0.3 million. Summary estimates by component are in Table 1. Detailed cost estimates by expenditure category and by financier are in Appendix 4.

Table 1: Project Costs ($ million)

AmountaItem A. Base Costb 1. Commercial Agriculture Investment and Management 15.6 2. Inclusive Development of Stakeholders 3.6 3. Market Information Dissemination 0.3 4. Capacity Enhancement of Project Partners 0.2 5. Project Implementation Support 3.6 Subtotal (A) 23.3 B. Contingenciesc 0.8 Total 24.1 a Includes taxes and duties of $0.3 million. b In mid 2006 prices. c Physical contingencies computed at 5% for field development, training, workshops, surveys and

studies, equipment, and vehicles. Price contingencies computed at a foreign price escalator of 2.8% in the first year and 1.2% in the following years, and a domestic price escalator of 6.5% in the first year and 5% in the following years, includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

Source: Report and Recommendation of the President (RRP) on the proposed Asian Development Fund (ADF) grant to Nepal for the Commercial Agriculture Development Project.

B. Financing Plan 29. ADB has approved a grant of $18.0 million equivalent from its Special Funds resources to help finance the Project. The grant will finance 74.7% of the project cost.9 The Government is to provide $0.8 million equivalent in the form of project staff salary, project office overhead and operational cost, and taxes and duties, or 3.2% of the total project cost. CAA general members will finance 16.6% of the project cost equivalent to $4.0 million in the form of counterpart funding to the interventions financed under the CAF. The DDCs will finance 3.3% of the project cost or $0.8 million equivalent in the

9 ADB’s cost share at 74.7% is in accordance with the country cost-sharing ceiling applicable to Nepal (i.e.,

80%).

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form of technical services, field appraisal, and assessment. Farmer communities will finance 2.2% of the project cost equivalent to $0.5 million in the form of labor and in-kind contributions. Table 2 summarizes the financing plan.

Table 2: Financing Plan ($ million)

Source Total % Asian Development Bank 18.0 74.7 Government of Nepal 0.8 3.2 Commercial Agriculture Alliance General Members 4.0 16.6 District Development Committees 0.8 3.3 Farmers Communities 0.5 2.2

Total 24.1 100.0 Source: RRP. C. Allocation of Grant Proceeds 30. The allocation by cost categories and financing percentages of the grant is presented in Table 3.

Table 3: Allocation and Withdrawal of Grant Proceeds ($ million)

Category

ADB Financing

Amount Allocated Number

Item Category Subcategory

Percentage of Total

Expenditure* 1 Commercial Agriculture Fund 8.000 100 2 Vehicles and Equipment 0.414 100

2A Vehicles and Motorcycles 0.232 100 2B Office Equipment and Furniture 0.182 100 3 Consulting Services 2.545 100 4 NGO Contracted Services 2.961 100 5 Training and Workshops 1.225 100 6 Surveys, Monitoring and Evaluation 0.111 100 7 Market Information and

Dissemination

0.294

100 8 Commercial Agriculture Alliance

Management, Operation, and Auditing

2.169

100

9 Unallocated 0.281 Total 18.000 * excluding local taxes and duties, which shall be borne by the Government. 31. The goods, works, and consulting services and other items of expenditure to be financed out of the proceeds of the grant and the allocation of amounts of the grant among different categories of such goods, works, and consulting services and other items of expenditure shall be in accordance with the provisions of Schedule 2 of the Grant Agreement dated 23 February 2007, as such Schedule may be amended from time to time by agreement between the Government and ADB.

9

32. Except as ADB may otherwise agree, all goods, works, and consulting services to be financed out of the proceeds of the grant shall be procured in accordance with the provisions of Schedule 3 of the Grant Agreement. 33. Withdrawals from the grant account in respect of goods, works, and consulting services shall be made only on account of expenditures relating to:

• goods which are produced in and supplied from and services which are supplied from such member countries of ADB as shall have been specified by ADB from time to time as eligible sources for procurement, and

• goods, works, and consulting services which meet such other eligibility requirements as shall have been specified by ADB from time to time.

34. Reallocation. Notwithstanding the allocation of grant proceeds and the withdrawal percentages set forth in Table 3: (a) if the amount of the grant allocated to any category appears to be insufficient to

finance all agreed expenditures in that category, ADB may, by notice to the Government, (i) reallocate to such category, to the extent required to meet the estimated shortfall, amounts of the grant which have been allocated to another category but, in the opinion of ADB, are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the withdrawal percentage applicable to such expenditures in order that further withdrawals under such category may continue until all expenditures thereunder shall have been made; and

(b) if the amount of the grant then allocated to any category appears to exceed all

agreed expenditures in that category, ADB may, by notice to the Government reallocate such excess amount to any other category.

III. IMPLEMENTATION ARRANGEMENTS

A. Executing and Implementing Agencies 35. The MOAC will be the Executing Agency. The CAA will be the Implementing Agency for component 1, and DOA will be the Implementing Agency for the other components. B. Project Management Organization 36. Project Management Unit (PMU). A PMU will be established by the Government in Biratnagar to ensure efficient implementation and management of the project activities. The PMU, which will be headed by a project manager, will (i) prepare annual work plans and project progress reports; (ii) recruit consultants and award procurement contracts; (iii) supervise project activities other than for component 1 and the performance of partner NGOs and service providers; and (iv) carry out M&E of the activities, outputs, and expected impacts other than for component 1. 37. The PMU staff will include a social equity officer with a cross-cutting role to ensure social conflict identification and resolution processes. The officer will ensure that fairness is applied to all dealings with partners (NGOs and service providers) and beneficiaries (financial and management related). The PMU will also appoint a results-

10

based monitoring officer, who will be responsible for ensuring a balance between monitoring the quantifiable (inputs and outputs) and nonquantifiable project impacts. Other PMU officers include planning and implementation officers, accounts and financial officers, procurement and contract officer, and technical officers. One of these officers will be responsible for managing a complaint cell to be created as part of the complaint redressal mechanism under the Project. Table 4 provides the full listing of PMU staff.

Table 4: Project Management Unit Staffing

Position Number A. Professional Staff

Project Manager (recommended at class 1) 1 Planning and Implementation Officers (recommended at class 2) 2 Social Equity Officer (recommended at class 3) 1 Results-Based Monitoring Officer (recommended at class 3) 1 Accounts and Financial Officer 1 Procurement and Contract Officer 1 Technical Officers 2

Total Professional Staff 9 B. Assistants

Personnel Officers 3 Senior Office Assistant 1 Computer Operators 3 Drivers 3 Service Personnel 3

Total Assistants 13

Source: RRP. 38. Paragraph 7 and Appendix 1 of this PAM describes the management structure of the CAA. 39. Project Steering Committee (PSC). A PSC has been established to (i) oversee project implementation, (ii) review project progress, and (iii) resolve policy issues related to the Project. The PSC will be chaired by the MOAC secretary, with the project manager as member secretary, and include the director general of DOA; joint secretaries of MOAC and the ministries of finance (foreign aid); industries, commerce and supplies; local development (devolution); women, children and social welfare (planning); and National Planning Commission (agriculture and forestry); executive director of the Agro Enterprise Center; and general manager of the CAA. The PSC will convene its meeting at least twice a year.

IV. IMPLEMENTATION SCHEDULE 40. The Project will be implemented over 6 years. Year 1 activities will include (i) establishing the PSC, (ii) fully staffing the PMU and CAA headquarters and district branches, (iii) establishing the project result monitoring framework, (iv) establishing complaint redressal mechanisms, (v) recruiting consultants, (vi) engaging partner NGOs, (vii) orienting partner NGOs and other stakeholders, (viii) procuring essential equipment and vehicles, and (ix) conducting the baseline survey and product and market-chain analysis. Screening, evaluation, and approval of CAF investment proposals will start from the fourth quarter of Year 1, and the full implementation of CAF subprojects will begin by the first quarter of the Year 2 after ensuring that the investments are demand driven, technically feasible, and comply with investment criteria. The market information

11

system will be established from the last quarter of Year 1. The project implementation schedule is in Appendix 5.

V. CONSULTANT SERVICES 41. The Project will require 818 person-months of consulting services, including 36 person-months of international and 782 person-months of national expertise, 10 for market-chain development, social inclusion and participation, agribusiness development, commercial agriculture fund analysis and advisory, community subproject investment, market information and promotion, training design, M&E, and environmental impact analysis and monitoring. The consultants will be selected and engaged in accordance with ADB’s Guidelines on the Use of Consultants. The quality- and cost-based selection (QCBS) process will be applied. 42. Because of the innovative project design and the demand-driven and socially sensitive project approach, selection of the international project adviser (team leader) and the national deputy team leader is considered critical to project success. These two consultants will be recruited as individual consultants by the Government following ADB’s procedures for recruiting individual consultants. The recruitment will be carried out immediately after project effectiveness so they can assist with project start-up activities. Consultants’ qualification selection (CQS) and least cost selection (LCS) procedures will be used to recruit consultants or service providers for (i) training and workshops; and (ii) surveys, monitoring and evaluation. NGOs will be engaged by the PMU following the procedures and eligibility criteria set forth in Appendix 2 of this PAM using QCBS, CQS, and/or LCS as appropriate. Other consultants will be recruited through a firm by the Government, with the agreement of ADB. Table 5 summarizes the procurement thresholds for consulting services. Appendix 6 and its annexes includes the detailed terms of reference for the Project’s consulting services, and the description and procedures for the prescribed selection methods to be used for recruiting consultants and other services. Detailed instructions and procedures for recruiting consultants can also be found in Section 2 of the ADB’s Project Administration Instructions, which is available at http://www.adb.org/Documents/Manuals/PAI/default.asp. Documents on consulting services (e.g. request for proposals from firms and sample contracts) can be downloaded from http://www.adb.org/Consulting/documents.asp.

Table 5: Procurement Methods for Consulting and Other Services

Contract Description

Procurement Method

Number of Contracts

Prior Review by ADB (Yes/No)

Package A Implementation Support Consultants

Individual Consultant Selection

2 Yes

Package B Implementation Support Consultant

QCBS 1 Yes

NGOs and Other Services QCBS/CQS/LCS Multiple Yes

VI. PROCUREMENT

10 The bulk of domestic consulting services will be utilized to employ three full-time social inclusion

specialists and three full-time agribusiness development specialists who will be fielded in the districts.

http://www.adb.org/Documents/Manuals/PAI/default.asp

http://www.adb.org/Consulting/documents.asp

12

43. The PMU will be responsible for procuring all goods and services under the Project, following ADB’s Procurement Guidelines. Supply contracts for equipment or materials estimated to cost $500,000 or more will be awarded through international competitive bidding, and those costing less than $500,000 (other than minor items) will be awarded through limited international bidding. Shopping procedures will be applied for small or off-the-shelf items valued at less than $100,000. Procurement by CAF recipients, including civil works, will follow the financial intermediaries’ method in accordance with ADB’s Procurement Guidelines (2007), paragraph 3.12, and Project Administration Instructions 3.05D, paragraph 10. The most recent procurement plan (approved on 10 June 2008) is in Appendix 7. The methods of procurement are subject to the detailed arrangements and threshold values set forth in the procurement plan. The Government may only modify the methods of procurement or threshold values with the prior agreement of ADB, and modifications must be set out in updates to the procurement plan. Detailed description and procedures for the prescribed procurement methods are in Appendix 8, and can also be found in Section 3 of the ADB’s Project Administration Instructions available at http://www.adb.org/Documents/Manuals/PAI/default.asp.

VII. DISBURSEMENT PROCEDURES 44. Grant proceeds for financing of all goods and services shall be disbursed in accordance with ADB’s Loan Disbursement Handbook (the Handbook). A copy of the Handbook, which will be provided by ADB at project inception, can also be download from http://www.adb.org/Documents/Handbooks/Loan_Disbursement/default.asp. ADB has also issued in May 2007 the disbursement letter that outlines the actions that should be done prior to commencing disbursements (i.e. nominating/authorizing persons for withdrawals and submission of specimen signatures of the authorized signatories) and the disbursement procedures and other related arrangements for financial administration of the Project (Appendix 9). In addition to the disbursement modalities (imprest fund and statement of expenditure procedures) discussed in detail in the ADB’s disbursement letter, the EA may also use any of the following disbursement procedures: • direct payment procedure, where ADB, at the EA’s request, pays a designated

beneficiary directly (Chapter 7 of the Handbook provides details). This procedure is used mainly for payments of large contracts, progress payments, consultants’ fees, or procurement of goods;

• reimbursement procedure, where ADB pays from the grant account to the Government’s account or, in some cases, to the project account for eligible expenditure which have been incurred and paid for by the project out of its budget allocation or its own resources (Chapter 9 of the Handbook provides details). This payment procedure is commonly used for local currency costs, petty purchases and small works; and

• commitment procedure, where ADB at the EA’s request, provides a irrevocable undertaking to reimburse a commercial bank for payments made or to be made to a supplier against a letter of credit financed from the grant account (Chapter 8 of the Handbook provides details). This procedure is used mainly for payments of importation costs of goods.

45. Disbursements for the CAF will follow the ADB’s simultaneous application for subloan approval and withdrawal (SAW) procedure. The simultaneous application for SAW procedure is a procedure for reimbursing financial intermediaries having numerous and small amounts of subloans against a signed withdrawal application supported by a


http://www.adb.org/Documents/Handbooks/Loan_Disbursement/default.asp

13

summary sheet (page 35 of the Handbook discusses the procedure). Appendix 28 of the Handbook also suggests a sample SAW format which may be slightly modified in consultation with ADB based on the nature of investments to be financed by the CAF.

VIII. PROJECT MONITORING AND EVALUATION 46. Project Performance Monitoring and Evaluation. The Project will be monitored and evaluated to determine its efficiency (delivery of inputs against specified implementation targets and time frame as set out in the Project’s design and monitoring framework [page iv of this PAM]) and effectiveness (outputs, outcomes, and short-term impacts) as measured against baseline and product-chain data. The baseline and product-chain studies will be undertaken in each district and involve quantitative and qualitative assessments to provide a clear understanding of the beneficiaries’ socioeconomic characteristics, including ethnicity, gender, and economic status; and an assessment of the value chain that will serve as a benchmark against which project progress can be measured. 47. The Project will solicit monitoring and evaluation feedback on project activities from (i) farmer groups; (ii) marketing groups, associations, and cooperatives; (iii) partnering NGOs and training service providers; (iv) the CAA and its branch offices; (v) project studies and reports; (vi) project-supported market information system; and (vii) any other relevant sources such as the Federation of Nepal Chambers of Commerce and Industry. The collected information will be analyzed, evaluated, and aggregated to be utilized for (i) guiding project planning and implementation decision making, (ii) inclusion in the Project’s reporting framework, and (iii) utilization by institutional partners such as DOA and the Federation of Nepal Chambers of Commerce and Industry. 48. Project Review. The Government and ADB shall undertake semi-annual review of the Project, which shall cover the review of (i) the performance of PMU, CAA, and partner NGOs and service providers; (ii) physical progress of Project implementation; (iii) the extent of the inclusion of poor and excluded groups in Project implementation; (iv) compliance with the grant covenants; (v) implementation of the Gender Action Plan, and (vi) other relevant matters that may arise during Project implementation. The Government and ADB shall also undertake a comprehensive midterm review of the Project in the beginning of Year 4 to identify problems and constraints encountered during Project implementation and suggest measures to address identified constraints.

IX. REPORTING REQUIREMENTS 49. The CAA and PMU will prepare and submit to ADB quarterly progress reports summarizing (i) progress made against established targets, (ii) delays and problems encountered in Project implementation, and actions taken to resolve issues, (iii) compliance with grant covenants, (iv) proposed program of activities for the next quarter, and (v) expected progress during the succeeding period. The reports should preferably be submitted within 30 days after the quarter period under review. The suggested format and content of the progress reports are provided in Appendix 10 and its annexes. The following timeframe for submission of quarterly progress reports had been agreed at inception:

Due Dates (Yearly Basis)

14

Quarterly Progress Report I 15 November Quarterly Progress Report II 15 February Quarterly Progress Report III 15 May

50. The CAA and PMU will also prepare and submit to the PSC and ADB annual progress reports by 15 August of each year. Within three months of its submission to ADB, the annual progress reports shall be made available to the public, in particular the local stakeholders, in Nepali language. 51. The CAA and PMU will also submit project completion reports (PCRs) to the PSC and ADB within three months of physical completion of the Project. The format and content of the PCR is provided in Appendix 11.

X. ACCOUNTING AND AUDITING 52. All agencies involved in project implementation will prepare and maintain separate accounts for project-related disbursements. The PMU will consolidate the accounts under its purview and submit them to the Ministry of Finance and ADB. The audit of imprest accounts and statements of expenditure can be carried out as part of the regular annual audits. The auditor’s opinion on the part of the examination relating to imprest accounts and statement of expenditure should be separately set out in the auditor’s report. Project accounts, together with disbursement documents, will be audited annually by independent auditors acceptable to ADB,11 and will be submitted to ADB within 6 months of the end of the fiscal year to which they relate. The Government will ensure submission of audited project accounts within this stipulated time frame. 53. An annual performance audit of CAA will be conducted by an independent and external auditor,11 having at least 5 years of working experience as a qualified accountant, to (i) review all CAA disbursements to the intended recipients of the CAF, (ii) evaluate the extent to which proper and timely disbursements were made, and (iii) recommend measures to improve the timely and effective disbursement of the CAF. The CAA will be required to fully implement the recommended measures within 1 month of its receipt of the report.

XI. MAJOR GRANT AND PROJECT COVENANTS 54. Major covenants are in Appendix 12. The status of compliance, including actions taken to comply with the CADP covenants should be indicated in the appropriate column. Updated covenants should be appended to the quarterly and annual progress reports that will be submitted by the PMU and CAA.

XII. KEY PERSONS INVOLVED IN THE PROJECT A. ADB Agriculture, Natural Resources and

Social Services Division (SANS) South Asia Department

Mr. Frederick C. Roche Director, SANS Tel. No. (632) 632 6908

11 During grant negotiations, ADB confirmed that the Auditor General of Nepal is considered independent

and acceptable to ADB for the purposes of Section 4.02 of the Grant Agreement and Section 2.09 of the Project Agreement.

15

6 ADB Avenue, Mandaluyong City 0401 Metro Manila, Philippines

Divisional Fax No.: (632) 636-2391 E-mail: [email protected]

Mr. Jiangfeng Zhang Natural Resources Economist, SANS Tel. No. (632) 632-6737; 5928 E-mail: [email protected]

Ms. Victoria Fe Mariano Project Implementation Officer Tel. No. (632) 632-6998 E-mail: [email protected]

Nepal Resident Mission Srikunj Kamaladi Ward No. 31 P.O. Box 5017, Kathmandu, Nepal

Mr. Paul Heytens Country Director Tel. No. +977 1 422 7779 Fax No. +977 1 422 5063 E-mail: [email protected]

Mr. Govinda Gewali Senior Project Implementation Officer E-mail: [email protected] B. Government

Ministry of Agriculture and Cooperatives Singha Durbar Kathmandu, Nepal

Mr. Tek B. Thapa Secretary Tel. No. +977 1 424 3339 Fax No. +977 1 422 5825

Mr. Bharat Prasad Upadhyay Director General Department of Agriculture Harihar Bhawan, Lalitpur Tel. No. 977-1-5521323 Fax No. 977-1-5524093

Mr. Yogendra Karki Project Manager – CADP PMU Biratnagar, Morang Tel. No. 021-522258 (Biratnagar) Fax No. 977-1-5523269 (Liaison Office) E-mail: [email protected]

Mr. Ram Kumar Sharma General Manager Commercial Agriculture Alliance 418 Balbhadra Marga, Biratnagar-5 Tel. No. 021-622144 Fax No. 977-21-522931 E-mail: [email protected]

mailto:[email protected]







16

XIII. ANTICORRUPTION 55. ADB’s anticorruption policy 12 had been explained to and discussed with the Government and the MOAC. Consistent with its commitment to good governance, accountability, and transparency, ADB reserves the right to investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive, or coercive practices relating to the Project. To support these efforts, relevant provisions of ADB’s anticorruption policy are included in the grant regulations 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 MOAC and all contractors, suppliers, consultants, and other service providers as they relate to the Project. Allegations of corrupt, fraudulent, collusive or coercive practices may be reported to the Integrity Division of the Office of the General Auditor or ADB. The following site provides procedures on how to report fraud or corruption: http://www.adb.org/Integrity/howto.asp. 56. The Project has incorporated certain measures to enhance governance and prevent corruption. The measures for project-wide activities include the following:

(i) A compliance officer in the CAA will undertake all necessary measures to prevent and address any financial irregularities and/or abuse of authority in CAA operations, including in CAF management. The compliance officer will liaise with the relevant government agencies or commissions responsible for efforts to combat corruption and abuse of authority.

(ii) A complaint redressal mechanism will ensure that complaints made by the intended project beneficiaries are addressed accordingly. The mechanism had been developed and approved, and a copy is appended as Appendix 13.

(iii) Consultants will support PMU staff, particularly on consultant recruitment, procurement, training and financial management, and preparation of a project administration memorandum to guide implementation.

(iv) Information technology will be required to increase transparency, accountability, and efficiency in the procurement process.

57. Measures specific to CAA management of the CAF are as follows:

(i) The CAA board will establish an appraisal panel to ensure that the selection of the interventions to be financed under the CAF is done in accordance with the agreed standard operating procedures and selection criteria.

(ii) The CAA general manager, CAA appraisal panel members, and CAA compliance officer will be required to disclose their wealth prior to and upon completion of their assignments. The disclosure must be made in a manner that will allow the public to access this information.

(iii) A performance audit of the CAF and CAA will be conducted annually to review all disbursements made by the CAA within a particular year to the

12 ADB. 1998. Anticorruption. Manila.

(http://www.adb.org/Documents/Policies/Anticorruption/default.asp?p=antipubs)

http://www.adb.org/Integrity/howto.asp

http://www.adb.org/Documents/Policies/Anticorruption/default.asp?p=antipubs

17

intended CAF recipients, and evaluate the extent to which proper and timely disbursements were made. This audit will be conducted by an independent and external auditor.

(iv) The CAA will establish standard operating procedures and a code of conduct, which will incorporate conflict of interest rules applicable to its board members, management, and staff. The conflict of interest rules will be designed to ensure that the CAA will operate in a transparent and equitable manner.

(v) Entities closely affiliated with appraisal panel members will be prohibited from submitting any proposals for financing under the CAF.13

(vi) The maximum amount of financing that each general member can obtain from the CAF on cumulative basis will be $40,000; the maximum amount for each DDC on cumulative basis will be $320,000.

58. In addition, the Project will implement the following to ensure its activities are as transparent as possible:

(i) The Project will disseminate information regarding its objectives, programs, and funding arrangements to the targeted beneficiaries to ensure optimal awareness and understanding of the Project.

(ii) The complaint redressal mechanism to be established under the Project will ensure that the community is able to submit complaints and track measures undertaken to address them.

(iii) The Project will involve beneficiaries in monitoring project implementation. Representatives of farmer groups assisted under the Project will meet in workshop situations on a regular basis to report to the PMU on the delivery of project inputs, effectiveness of project interventions, and performance of partner NGOs.

(iv) The process of application and the approved investments under the CAF will be made transparent to provide the community with access to such information. Applicants whose applications are declined will be informed individually by the CAA with reasons for such decision.

(v) Within 3 months of submission to ADB, annual project progress reports shall be made available to the public, in particular the local stakeholders, in Nepali language.

XIV. OTHER MATTERS

59. Gender Action Plan (GAP). The Government shall take all necessary and appropriate measures to implement the GAP (Appendix 14) to ensure women’s participation in the Project, both as beneficiaries of the Project and staff in the PMU and CAA. 60. ADB Documents and Publications. Appendix 15 provides a listing of ADB documents and publications relevant to the implementation and administration of the Project. Most of the documents and publications can be downloaded from the ADB website. However, requests for hard copies will be accommodated by ADB to the extent possible.

13 Close affiliation means an entity in which the appraisal panel member or any of his/her immediate family

members has 50% or more financial interest.

Appendix 1, Annex A 1

ARTICLES OF ASSOCIATION

Of

A Company Not Distributing Profit

COMMERCIAL AGRICULTURE ALLIANCE

Incorporated under the Companies Ordinance, 2062 (2006)

1. Name of the Company:

The name of the Company shall be Commercial Agriculture Alliance.

2. Registered Office of the Company:

(1) The registered office of the Company shall be in Morang District Biratnagar Sub

Metropolitan City Ward no 17. The Company shall establish branch office at each

eleven districts within the region in which the program of the Company shall be

conducted in the first phase and which are named under section 16 (b) of the Articles

of Association of the Company.

3. Procedures to Convene General Meeting and Matter Relating to Notice:

(1) The General Meeting of the Company shall be as follows:

(a) Annual General Meeting

(b) Extra-ordinary General Meeting

(2) The Company shall convene its first Annual General Meeting within one year from

the date of incorporation of the Company and thereafter the Annual General

Meeting shall be convened within six months from the closure of each financial

year.

(3) An Extra-ordinary General Meeting may be convened pursuant to the provisions

of the Company Law.

(4) The chairperson of the Board of Directors shall call General Meeting as per the

decision of the Board of Directors. Prior notice of at least twenty-one days for

convening Annual General Meeting and a prior notice of at least fifteen days for

convening Extra-ordinary General Meeting shall be given to the Members. The

notice shall specify the venue, date and agenda of the Meeting.

2 Appendix 1, Annex A

(5) The General Meeting shall be held in the district where its registered office is

situated or any other place, as decided by the Board of Directors, convenient to

substantial number of Members adjoining to such district.

(6) In the event that the chairperson of the Company does not convene a General

Meeting, by not calling meeting of the Board of Directors pursuant to sub-section

(4) or the chairperson is out of reach or is abroad for consecutive six months or

incapable to attend General Meeting by reason of physical incapacity, at least fifty

one percent of the Board of Directors may make a decision to convene General

Meeting by specifying the reason thereof.

(7) If the Meeting convened pursuant to sub-section (4) or (6) could not be held due

to the lack of quorum required under Section 4 of this Articles, the General

Meeting shall be re-convened by giving at least seven days prior notice.

4. Quorum for the Meeting:

The proceeding of the General Meeting shall not commence unless there is presence

of more than fifty percent of Members in the meeting.

But nothing shall prevent from holding the General Meeting reconvened pursuant to

Section 3 (7), if at least twenty five percent of the total Members or three Members

other than the Directors, which ever is higher, are present in such meeting.

5. Procedures of General Meeting:

(1) The chairperson of the Board of Directors shall chair the General Meeting.

(2) The chairperson of the General Meeting shall be from the General Members. The

Member nominated by the Members present in the meeting shall chair the

meeting in the event of the absence of the chairperson of the Board of Directors.

(3) The validity and quorum requirement of the meeting shall be discussed and

ascertained before the commencement of the meeting.

(4) The chairperson shall give permission to conduct the proceeding of meeting if the

quorum requirement is found satisfied.


(5) The resolutions shall be presented in the form of the agenda and discussion shall

be made on each resolution. A second resolution shall not be discussed until the

decision is reached on the first resolution.

(6) The Members shall participate in the discussion in the manner as prescribed by the

chairperson.

(7) The Members shall exercise voting right on the basis of ‘one-member one vote’.

Provided that Nominated Members shall not be entitled to cast vote in the election

of Directors representing the General Members.

(8) On any subject voted upon, the vote of the majority present in the meeting shall

constitute the decision of General Meeting.

Provided that for a special resolution, it shall be deemed to have been adopted by

the meeting if seventy five percent of Members present in the meeting vote in

favour of the resolution.

(9) The General Meeting shall adopt special resolution for deciding matters relating to

change of name or main objective of the Company, merger of the Company,

liquidation of the Company and any other matters specified by the Company Law.

(10) The vote of the chairperson shall be decisive in the event of tie.

(11) If all or any of the resolutions placed in a General Meeting could not be

discussed or decided due to any reason, such General Meeting shall be

reconvened by giving at least seven days prior notice. No discussion shall take

place in the reconvened General Meeting on any new resolution without first

discussing the resolution prescribed for the meeting.

(12) No decision shall take place on any resolution, which was not listed in the notice

given for the General Meeting.

Provided that new resolutions may be presented in the meeting if sixty seven

percent of the Members present in the meeting express their consent of placing

such new resolution in the meeting.

6. Appointment of Directors, Their Number and Terms of Office:

(1) The Directors representing General Members shall be elected by General

Members in the General Meeting pursuant to the provisions of the Articles.The


name of the Directors nominated under subsection 2 (b), (c) and (d) shall be

presented in the General Meeting for the information of the Members.

(2) The Board of Directors shall comprise the maximum of eleven Directors:

(a) Six Directors elected from amongst the representatives of the

General Members.

(b) Two Directors nominated by the Ministry of Agriculture and

Cooperatives and Ministry of Local Development of Government

of Nepal.

(c) Two Directors nominated by District Development Committee.

(d) One Director nominated by the Agro Enterprise Centre of the

Federation of Nepalese Chamber of Commerce and Industries.

(3) The Directors shall nominate the chairperson of the Board of Directors from

the Directors representing the General Member.

(4) The term of the Directors shall be for two years as of the date of his/her

appointment in the General Meeting and may be re-elected for another term.

Provided that-

(a) The terms of office of directors representing the General Member

elected under subsection (2) (a) shall be automatically terminated if

such director is no longer associated with the Member which he/she

represents or his/ her service with such Member is terminated due to

any reason.

(b) The terms of service of directors nominated under subsection (2) (b),

(c) and (d) shall be automatically terminated if such director is no

longer associated with the Member or his/ her service with such

Member is terminated due to any reason.

(5) The Board of Directors may appoint Director from amongst the

representatives of the General Members to fill the casual vacancy if the

position of any Director elected under subsection (2) (a) falls vacant before

the holding of the Annual General Meeting. The Director thus appointed shall

hold the office until the Annual General Meeting is held.


Provided if the position of the Director representing the Nominated Member

falls vacant, the Member nominating such Director shall appoint the Director

to fill the casual vacancy. The term of the Director so appointed to fill the

casual vacancy shall last for the remaining term of the director whose position

fell vacant.

(6) Till the holding of the first Annual General Meeting, the first Board of

Directors shall consist of following Members:

a) Mr. Jagannath Mahaseth nominated by Ministry of Agriculture and

Cooperatives of Government of Nepal

b) Mr. Lalamani Ojha nominated by Ministry of Local Development of

Government of Nepal

c) Mr. Devabhakta Shakya nominated by Federation of Nepalese

Chamber of Commerce and Industries

d) Mr. Ashok Kumar Muraraka from Ilam Tea producers Pvt. Ltd

e) Mr. Yubaraj Gautam from Shree Bahumukhi Krishi Shakari Sanstha

Limited

f) Mr. Meghendra Gurung from Sindhuwa Bahuuddeshiya Sahakari

Sanstha Limited

g) Mr. Bhalakaji Rai from Tankisinawari Krishi Upaj Bazar

Byabasthapan Sahakari Sanstha Limited

(7) The promoters may appoint Director from amongst the Members acquiring the

Membership of the Company after its incorporation, if the same is required to

ensure the proper representation of the Members in the first Board of

Directors. The Director thus appointed shall hold the office until the Annual

General Meeting is held.

7. Provisions Relating to Expenses of the Company:

(1) The remuneration, meeting allowance and other facilities of the Directors and

officers and the expenses incurred in the incorporation and operation of the

Company shall be as fixed by the Office on the basis of capital and profit of the

Company.


(2) The Company shall submit to the Office the particulars of capital generated or

income and profit projected, and basis and reasons of proposed remuneration,

allowance and facilities to be fixed, for the purpose of prescribing the

remuneration, meeting allowance and other facilities of the Directors or officers.

(3) The remuneration and facilities of the employees or advisors of the Company

shall be as prescribed by the Board of Directors.

(4) Notwithstanding anything contained in sub-section (2), the prior approval of the

General Meeting shall be obtained for appointing close relative of the Member,

Director or General Manager and any person with substantial ownership interest

in the General Member of the Company in any remunerative position of employee

or advisor. The Office shall be notified in writing within thirty-five days as to the

remuneration and facilities of such employee and advisor.

8. Provision relating to Minute of Decision of the General Meeting and Board of

Directors and their Copy and Inspection:

(1) The decisions of the General Meeting and the Board of Directors shall be recorded

in writing and signed pursuant to the Company Law. However, the Company may

keep the minute of such meeting in electronic form. An appropriate arrangement

shall be made to ensure that the decision once made cannot be changed, erased,

mutilated, corrected or altered in any manner.

(2) The Company shall allow the inspection of decisions of General Meeting and the

meeting of the Board of Directors during the office hours by the Members. The

Company shall provide copy of such decision if requested by Members by

charging Rs.5 (Five rupees) per page after such decision has been certified by the

Company Secretary or, in the absence of the Company Secretary, by the General

Manager.

9. Functions, Duties and Power of Board of Directors:

The Board of Directors shall have following functions, duties and powers:

(1) Decide on an annual work plan developed by the General Manager for the

purpose of performance measurement.


(2) Frame draft Code of Conduct including conflict of interest rules applicable to

Members, Directors, members of the Appraisal Panel, General Manager,

Company Secretary and other employees of the Company and lay before the

General Meeting for its adoption.

(3) Approve the terms of reference for the performance audit.

(4) Revise existing rules or establish new regulation in order to improve financial

and operational management procedure.

(5) Establish the criteria for the appointment of employees, external monitor and

advisors of the Company and approve rules relating to the condition of service

and remuneration.

(6) Frame and adopt Standard Operating Procedures, Business Plan and Rules

relating to the condition of employment and other rules including internal rules

necessary to carry out the objectives of the Company.

(7) Discharge other functions and duties and exercise powers as provided in the

Company Law.

10. Company not to have Managing Director:

There shall be no Managing Director in the Company. The Company shall be

managed by a team of professional managers headed by the General Manager. The

General Manager shall be appointed by the Board of Directors.

11. Qualification, Remuneration and Terms of Office and Functions, Powers and

Duties of the General Manager:

(1) Only the person possessing following minimum qualification and experience shall

be eligible to be appointed as the General Manager of the Company:

(a) Obtaining at least bachelor degree in finance, commerce, management,

economics or in any other related subject;

(b) Having general familiarity with the agricultural sector and its importance

in Nepal;


(c) Having good Knowledge in financial management and analysis,

investment planning and analysis, project appraisal and credit distribution;

and

(d) Having at least two years of working experience as a manger in bank or

financial institution or other related institution or as a project manager or a

financial expert in any internationally funded project.

(2) The General Manager shall be responsible for the management and day-to-day

operation of the Company subject to the prevailing law, this Articles, Standard

Operating Procedures, Code of Conduct and Rules of the Company.

(3) The General Manager shall have following duties and responsibilities:

(a) Develop and install procedures and systems for the efficient use of the

Commercial Agriculture Fund.

(b) Select and appoint employees for the Company and train them.

(c) Supervise the application process of the Commercial Agriculture

Fund.

(d) Develop targeted promotion activities.

(e) Approve expenditures upto the threshold amount prescribed in the

Standard Operating Procedures.

(f) Ensure that the books and accounts of financial transactions are

maintained pursuant to accounting standards prescribed under the

prevailing law.

(g) Report to the Board of Directors regarding the performance of the

Company.

(h) Act as a facilitator for holding the meetings of the Appraisal Panel to

review the application for the support of the Commercial Agriculture

Fund.

(i) Liaison with the external agencies or institutions to achieve the

objective of the Company.

(j) Discharge other duties and responsibilities assigned by the Board of

Directors.


(4) The term of office of the General Manager shall be three years and may be

reappointed for another term.

(5) The remuneration and facilities of the General Manager shall be as fixed by the

Board of Directors subject to the policy directives issued by the Office.

12. Code of Conduct:

The General Meeting of the Company shall adopt Code of Conduct, which shall

include the conflict of interest rules applicable to its Members, Directors, members of

the Appraisal Panel, General Manager, Company Secretary and other employees of

the Company within one year from the date of commencement of transaction of the

Company. The Board of Directors shall prepare and lay the draft Code of Conduct

before the General Meeting for its approval.

Provided that before the first Annual General Meeting, the Board of Directors shall

formulate and adopt Code of Conduct as an interim arrangement.

13. Qualification and Disqualification of Director and Member:

(1) The provision of the Company Law relating to the qualification and

disqualification of directors of the listed public company shall also be applicable

to the directors of the Company.

(2) A person who is disqualified to be appointed and remain as a Director of public

company pursuant to the prevailing law shall not be eligible to be the Member of

the Company.

14. Use of the Seal of the Company:

(1) The Company shall have a common seal to be used in its official transaction. The

seal shall remain in the custody of the Company Secretary. In the absence of the

Company Secretary, the seal shall remain in the custody of the General Manager.

(2) The Company is entitled to recover the loss sustained by it caused due to the

unauthorized use of the Company's common seal from the person causing such

loss.


(3) The Company may initiate appropriate legal action under the Company Law

against the persons making unauthorized use of the Company's common seal.

15. Provisions relating to Account of the Company and Audit Committee:

(1) The Company shall maintain up-to-date and clear record of transaction on daily

basis.

(2) The Company shall operate all its financial transactions by opening account in

any bank or financial institution.

Provided that any financial transactions up to the amount of Rs. 20,000 (twenty

thousand Rupees) shall be received and paid through the petty cash fund of the

Company.

(3) The Company shall get its books of accounts and annual financial statements

audited.

(4) The General Meeting of the Company shall appoint an auditor. Only an auditor

qualified under the Company Law and having at least ten years of working

experience as chartered accountant shall be eligible for appointment as auditor

of the Company. The Company shall furnish the name of the auditor to the

Office within fifteen days from the date of appointment.

(5) The auditor appointed pursuant to sub-section (4), shall submit the report to the

Company addressing the appointing authority, after certifying the books and

accounts and annual financial statements and cash flow statement as required

under the Company Law. The Company shall send the copy of such report to

each Member and the Office.

(6) The Company shall have an Audit Committee comprising at least three members.

The Board of Directors shall appoint the Audit Committee. The functions,

powers and duties of the Committee shall be as mentioned under the Company

Law.

(7) The members of the Audit Committee shall not be close relative of the Members,

Board of Directors, members of the Appraisal Panel or the General Manager of

the Company.

(8) The Audit Committee shall meet at least annually.


(9) The Audit Committee shall manage its own internal operational procedures.

16. Other Necessary Matters

(a) Organs of the Company:

The Company shall operate through the following organs and working mechanisms:

(1) General Meeting

(2) Board of Directors

(3) Appraisal Panel

(4) Management Team headed by the General Manager

(5) Branch Office headed by the Branch Manager

(6) Other bodies, committees, sub-committees as may be appointed or constituted by

the Board of Directors from time to time.

(b) Area Coverage:

In the first phase, the activities of the Company shall be limited to eleven districts of

the Eastern Development Region of Nepal. The program of the first phase shall be

conducted in Siraha, Saptari, Sunsari, Morang, Jhapa, Udayapur, Dhankuta,

Terahathum, Panchthar, Ilam, and Taplejung distrcits of the Eastern Development

Region. Based on the experience gained in the course of conducting the program and

progress made in those districts, the activities of the Company may be expanded to

other districts of the region. The Board of Directors shall have power to make a

decision on expansion of the Company's area coverage.

(c) Branch Office and Its Responsibilities:

(1) The Company shall establish Branch Office at each eleven program districts.

(2) The Branch Office shall be headed by the Branch Manager. The functions, duties

and powers of the Branch Office and the Branch Manager shall be as stated in the

Standard Operating Procedures.

(d) Membership Card and Register of Member, Director and Company Secretary:

(1) The Company shall issue membership card to its Members.


(2)The Company shall maintain the up-to-date Registers of Members, Directors and

Company Secretaries.

(3) The Company Secretary shall maintain and take custody of the Register of

Members and the Register of Directors and Company Secretaries.

(4) The Register of Members and the Register of Directors and Company Secretaries

shall be kept at the registered office of the Company.

(5) The Register of Members and the Register of Directors and Company Secretaries

shall be open for the inspection by the Members during the office hour.

(e) Performance Audit:

The Company shall conduct annual performance audit to assess the internal control

and operating systems to ensure appropriate check and balance mechanisms and

proceedings are in place, in order to avoid conflicts of interests and prevent potential

fraud and corruption. Terms of references for the performance audit shall be approved

by the Board of Directors. The performance audits shall be conducted by an

independent auditor appointed by the Board of Directors. The performance audit

report shall be delivered to the Board of Directors within two months after the end of

each financial year.

(f) Appraisal Panel:

(1) The Board of Directors of the Company shall form an Appraisal Panel.

(2) The Appraisal Panel shall comprise five members. Two members shall be from

among the members of the Board of Directors. The Board of Directors shall

appoint two members from the list prepared by the General Manager and the other

member shall be the General Manager.

(3) The tenure of the technical experts and the Board members in the Appraisal Panel

shall be for two years. They shall not be reappointed for another term.

(4) The specific functions, duties and powers of the Appraisal Panel shall be as

prescribed in the Standard Operating Procedures.

(g) Meeting of Board of Directors and Quorum:


(1) The meeting of Board of Directors shall be held at least six times a year and the

difference between two meetings shall not exceed three months.

(2)The chairperson shall call the meeting of the Board of Directors. If the chairperson

does not call the meeting of the meeting of Board of Directors within the

specified time, the Company Secretary shall call the meeting of Board of

Directors.

(3)The meeting of Board of Directors shall be presided over by the chairperson of the

Board of Directors and in the absence of the chairperson; it shall be presided over

by the Director nominated by the remaining Directors amongst themselves.

(4) The Directors shall be present in person in the meeting of Board of Directors.

(5) No meeting of the Board of Directors shall be held unless it is attended by at least

fifty one percent of the total number of Directors.

(6) If the requisite quorum is not met in the meeting of Board of Directors, the next

meeting shall be reconvened by giving at least three days prior notice to each

Director. If the quorum is not met in the meeting so reconvened pursuant to

Subsection (5), then the Directors present in the reconvened meeting shall form

the quorum and decide on the item of agenda prescribed for the meeting of the

Board.

(7) The majority decision of the Board of Directors shall be valid and in the event of

the tie, the chairperson shall have right to cast decisive vote.

(8) Notwithstanding anything contained in this Section, the Board of Directors by

obtaining written consent of all the members of the Board may take a decision

without having meetings by recording such consent in the writing. The written

consent taken shall be treated as a valid decision of the Board of Directors.

(h) Loan:

The Board of Directors may raise loans with or without pledging assets from any

bank or financial institution as per its necessity to operate the Company or to fulfil its

objectives.

(i) Confidentiality:


Every Director, General Manager, auditor, accountant, officer, employee or any other

person employed by the Company and engaged on behalf of it shall maintain

confidentiality of the business transactions, and their related documents.

(j) Use of Electronic Means:

Subject to the provisions of the Company Law the Company may use electronic

means of communication while communicating with its Members, Directors, General

Manager etc.

(k) Definition Clause

In this Articles, unless the subject or the context otherwise requires:

a) " Appraisal Panel" means the Appraisal Panel of the Company as constituted under

Section 16 (f) of this Articles.

b) "Articles" means the Articles of Association of the Company including any

amendments made therein from time to time.

c) "Board" or "Board of Directors" means the Board of Directors of the Company.

d) “Business Plan” means the Business Plan of the Company adopted by the Board of

Directors including any amendments made therein from time to time.

e) “Close Relative” means the coparcener of undivided family or husband, wife, father,

mother, mother-in law, father-in-law, brother, sister, sister-in-law, daughter-in-law,

brother-in-law, sister-in-law, son, daughter, daughter-in-law, grandson, grand-

daughter, grand daughter-in-law or son-in-law.

f) “Commercial Agricultural Stakeholders” means the farmer's cooperatives/groups,

traders or processors that meet the criteria set out for General Membership of the

Company under Section 13(2) of the Memorandum.

g) "Company" means Commercial Agriculture Alliance.

h) "Company Law" means the Companies Ordinance, 2062 (2006) as amended from

time to time and any other company legislation replacing it.

i) "Director" means for the time being the Directors of the Company.


j) "District Development Committee" means District Development Committee of eleven

program districts of the region as specified in Section 16(b) of this Articles.

k) “Commercial Agriculture Fund” means the Commercial Agriculture Fund managed

and disbursed by the Company as per the arrangements made in the Standard

Operating Procedures and Business Plan of the Company.

l) "General Manager" means any individual who is entrusted with the powers of the

management of the Company.

m) "General Member" means the Members other than the Nominated Members of the

Company and name of which is registered in the Register of Members.

n) “Majority” means more than 50% (fifty percent).

o) "Member" collectively means the General Members and Nominated Members.

p) "Memorandum" means the Memorandum of Association of the Company including

any amendments made therein from time to time.

q) “Nominated Member” means the Nominated Members of the Company as specified

under Section 13 (3) of the Memorandum and name of which is registered in the

Register of Members.

r) "Office" means the Office of Company Registrar of Government of Nepal.

s) “Person” means both natural and legal person and includes cooperatives,

associations, firms, companies, corporations, bodies corporate and individuals.

t) "Promoter" means the Promoter of the Company.

u) “Register of Members” means the register of the Members maintained pursuant to

Section 16 (d) of this Articles.

v) “Rules” means any Rules relating to the operation of the Company adopted by the

Board of Directors subject to the provisions of this Articles.

w) “Standard Operating Procedures” means the Standard Operating Procedures of the

Company adopted by the Board of Directors including any amendments made therein

from time to time.

x) “Substantial Ownership Interest” means direct or indirect share holding of more than

50% in an entity by a person.

y) Reference to any gender includes any other gender and vice versa and reference to

singular number includes plural number and vice versa.


17. Liquidation of the Company: (1) The General Meeting may liquidate the Company

by adopting the special resolution if it deems necessary.

(2) The General Meeting shall appoint one or more liquidator and auditor while

passing resolution pursuant to sub-section (1) for the accomplishment of the

liquidation process. The remuneration of the liquidator and auditor so appointed shall

be as prescribed by the General Meeting.

(3) The liquidator and auditor appointed under sub-section (2) shall accomplish the

proceedings of liquidation pursuant to the prevailing law.

18. Appointment of Company Secretary:

The Board of Directors shall appoint Company Secretary possessing necessary

qualification as mentioned under the Company Law. The functions, duties and

powers of the Company Secretary shall be as provided in the Company Law, this

Articles, Standard Operating Procedures, Code of Conduct and Rules.

19. Dissolution of Company and its Assets:

In the event of the dissolution of the Company, the assets remained after settling

debts and liabilities of the Company shall pass to the Ministry of Finance of

Government of Nepal.

20. Article of Association to be Void to the Extent of Inconsistency:

If any Section of this Articles is not consistent with the Company Law and other

prevailing law, such section shall be void to the extent of inconsistency.

21. Condition of Applicability of the Articles of Association in the Event of

Amendment:

If the Company is required to make any amendments in this Articles, it shall be

deemed to have been amended only upon the special resolution passed pursuant to the

Company Law and has been recorded by the Office.


22. Particulars of Promoter: We, the promoters of Commercial Agriculture Alliance

have signed this Articles in the presence of following witness:

Promoter's Name,

Address and Signature

Father's Name Grandfather's

Name

Name, Address and

Signature of witness

Sd. 1. Mr. Jagannath Mahaseth, authorized person from Ministry of Agriculture and Cooperatives of Government of Nepal Designation: Regional Agriculture Director 2. Mr. Lalamani Ojha, authorized person from the Ministry of Local Development of Government of Nepal Designation: Under secretary 3. Mr. Devabhakta Sakya, authorized person from Federation of Nepalese Chamber of Commerce and Industries Designation: Executive Director, Agro Enterprize Centre 4. Mr. Ashok Kumar Muraraka, authorized person from Ilam Tea producers Pvt. Ltd Designation: Director Address: 42, Gosawara road, Biratnagar 5. Mr. Yubaraj Gautam, authorized person from Shree Bahumukhi Krishi Sahakari Sanstha Limited Designation: Chairperson Address: Mahendranagar-9, Salwani, Sunsari 6. Mr. Meghendra Gurung, authorized person from Sindhuwa Bahuuddeshiya Sahakari Sanstha Limited Designation: Marketing Chief

Sd. 1. Name..................... Address..................... District...................... ............................Municipality/VDC ward No..............block no........................ Telephone............ Fax.............. E-mail......................... Post Box No................. Right Left


Address: Sindhuwa Bazar, Dhankuta 7. Mr. Bhalakaji Rai, authorized person from Tankisinawari Krishi Upaj Bazar Byabasthapan Sahakari Sanstha Limited Designation: Member Address: Tankisinawari-1, Morang

23. Declaration of the Promoter of the Company: The name, address, signature of us and

details of witness including all other particulars stated in this Articles are correct. We are

agreed to fulfil the obligations arising upon the incorporation of the Company on the basis of

the above-mentioned particulars. We have made this declaration with the consent that we

shall be liable to any punishment imposed under the prevailing law in the case of

misrepresentation of facts or the declaration made under this section is proved false.

1. Mr.Jagannath Mahaseth

2. Mr. Lalamani Ojha

3. Mr. Devabhakta Shakya

4. Mr. Ashok Kumar Muraraka

5. Mr. Yubaraj Gautam

6. Mr. Meghendra Gurung

7. Mr. Bhalakaji Rai

Appendix 1, Annex B 1

MEMORANDUM OF ASSOCIATION Of

A Company Not Distributing Profit COMMERCIAL AGRICULTURE ALLIANCE

Incorporated under the Companies Ordinance, 2062 (2006)

1. Name of the Company: The name of the Company shall be Commercial Agriculture Alliance.

2. Registered Office of the Company: (1) The registered office of the Company shall be in Morang District

Biratnagar Sub Metropolitan City Ward no 17. The Company shall

establish branch office at each eleven districts within the region in which

the program of the Company shall be conducted in the first phase and

which are named under section 16 (b) of the Articles of Association of

the Company.

(2) The place of transaction of the Company shall be in the eleven districts

of the Eastern Development Region (Siraha, Saptari, Sunsari, Morang,

Jhapa, Udayapur, Dhankuta, Terahathum, Panchthar, Ilam and

Taplejung).

3. Objectives of the Company: (1) The objectives of the Company shall be as follows:

(a) To promote commercial agriculture in Nepal by developing an

alliance between the commercial agricultural stakeholders.

(b) To manage commercial agriculture fund and provide support to its

Members from the fund.

(c) To educate its Members and other agricultural stakeholders about

the importance of market linkage on production, its sustainability

and multiplying capacity.

2 Appendix 1, Annex B

(d) To conduct awareness program on intellectual property protection

among the Members and support its Members for the protection

of intellectual property right.

(e) To enter into contract for value with any third party competent to

enter into contract.

(f) To establish branch office required for the fulfilment of the

objectives of the Company.

(g) To engage in any other activities, which are ancillary to fulfil the

above- mentioned principal objectives.

(2) If approval or license of the concerned authority is required under the

prevailing law to carry out any of the objectives of the Company

mentioned under subsection (1) above, such objectives shall be

implemented only after obtaining such approval.

(3) Copy of the license or approval in respect of the objective mentioned in

subsection (1) above shall be submitted to the Office within fifteen

days from the date of receipt of such approval or license.

4. Activities to be Carried Out for the Accomplishment of the Objectives of

the Company: The Company shall carry out the following functions to fulfil the objectives

mentioned under Section 3:

(a) Acquire land, building, vehicle and other necessary equipments

by way of purchase or lease for the use of the Company.

(b) Appoint necessary personnel and fix their terms and condition of

services.

(c) Open and operate bank account to deposit the amount of initial

capital and any fund or grant or loan or membership fee.

(d) Obtain necessary loan facilities from the bank or other financial

institution with or without pledging assets.


(e) Carry out other necessary activities required for the

accomplishment of the objectives of the Company.

5. Amount of Initial Capital Required for the Operation of the Company: The Company shall have initial capital of Rs. 50,000 (Fifty thousand

Rupees). The Company shall receive this amount from the General

Members of the Company as entrance fee and annual membership fee.

6. No Share Capital to Be Required for the Company: (1) No share capital is required for the incorporation of the Company.

However, the Company may receive entrance fee and annual

membership fee from its General Members and donation or grant from

any person or institution.

(2) Fee received from the General Member, amount received as grant or

donation or incorporation fee shall be deposited in a separate fund.

Such amount shall form the capital of the Company.

7. Prohibition from Distributing Profit:

(1) The Company shall not distribute dividend or any other amount to its

Members from the profit earned by it. (2) Profit earned by the Company shall be used only to increase its capital

or to meet the expenses required for fulfilling its objectives.

8. Other Necessary Matters:

(a) The Company shall bear all the expenses incurred in the process of

the incorporation of the Company.

(b) The Company shall not receive any assets from promoters or any

other person in any manner at the time of commencement of business

by the Company.

(c) The promoters or any person shall not receive any special privilege or

right from the Company.


9. Restriction on Transfer of Membership: Membership of the Company shall not be transferred in any manner.

10. Members not to be Liable to the Debt or Liability of the Company: The Member of the Company shall not be liable to the debt or liability of the

Company except it is accepted by a Member prescribing the extent of his/her

liability in writing.

11. Memorandum to be Void to the Extent of Inconsistency: If any Section of this Memorandum is not consistent with the Company Law

and other prevailing law, such Section shall be void to the extent of

inconsistency. 12 Condition of Applicability of Memorandum in the Event of Amendment: If the Company is required to make any amendment in this Memorandum it

shall be deemed to have been amended only upon special resolution passed

pursuant to the Company Law and has been recorded by the Office.

13. Types of Membership and Criteria For Acquisition: (1) The Company shall have following two types of Members:

(a) General Members; and

(b) Nominated Members.

(2) Only the commercial agricultural stakeholders capable of contributing

significantly to the long-term commercialisation of the agricultural sector

in Nepal shall be eligible to be the General Members of the Company.

The criteria for acquiring General Membership of the Company are as

follows:

(a) The commercial agricultural stakeholders must be engaged in

agriculture-based production, processing or trading within the

program districts of the region covered by the Company for at

least two years with the motive of profit.


(b) In the case of farmer cooperatives or groups:

(i) They must have at least twenty-five active members.

Such membership shall be demonstrated by reference to

proceedings of its meetings or activities, or other formal

written records.

(ii) They must demonstrate sales of agricultural products of

not less than Rs. 5, 00,000 (Five Hundred Thousand

Rupees) in at least one of the two years immediately

preceding their joining the Company as a Member.

(c) In the case of traders or processors:

(i) They must be constituted as legal entity or licensed

pursuant to law to engage in commercial agriculture

activities.

(ii) They must demonstrate sales of agriculture products of

not less than Rs. 5, 00,000 (Five Hundred Thousand

Rupees) from the program districts in the year

immediately preceding their joining the Company as a

Member.

(3) The Nominated Members of the Company shall be as follows:

(a) Representatives from Ministry of Agriculture and Cooperatives

and Ministry of Local Development of Government of Nepal

each.

(b) Representatives from each of the District Development

Committees of the eleven program districts.

(c) One representative from Agro Enterprise Centre of Federation

of Nepalese Chamber of Commerce and Industries.

(4) Only the General Members and district development committee from

among the Nominated Members shall be eligible to apply for the support

of the commercial agriculture fund. However, the District Development

Committees shall be eligible to apply for the support of commercial


agriculture fund only for the purpose of market related infrastructure

investments.

(5) The Company shall issue membership card to its Members.

(6) The application for obtaining General Membership shall be reviewed by

the management every year. The Board of Directors may issue new

General Membership.

14. Entrance Fee and Annual Membership Fee:

(1) General Members of the Company shall pay Rs. 1,000 (Rupees one

thousand) as entrance fee and Rs. 1,500 (Rupees one thousand and five

hundred) as annual fee for the membership of the Company. The amount

received as membership fee shall be non-refundable.

Provided that the Nominated Members are not required to pay any

entrance fee and annual membership fee.

(2) The General Member shall pay the annual membership fee within three

months of the closure of each financial year of the Company. If the fee is

not paid within the period, an additional fee of Rs. 500 (five hundred

rupees) shall be charged for each three months of delay in the payment of

the fee to the general member paying the fee within the next financial

year.

15. Termination of Membership: The membership of the Company shall be terminated in the following

circumstances:

(a) If the General Member does not pay the annual membership fee

within one year period from the closure of each financial year of

the Company.

(b) If the Member resigns from the Membership of the Company,

(c) If the Member is deregistered or liquidated or merged into other

company or institution.


(d) If the Member is declared insolvent under the prevailing law.

(e) If the two thirds of the Members present in the General Meeting

decide that any Member has acted against the interest and

objective of the Company.

(f) If the Member becomes disqualified to remain the Member of

the company pursuant to the prevailing law.

16. Details of the Promoter: We, the promoters of Commercial Agriculture Alliance, have signed this

Memorandum in the presence of following witness:

Promoter's Name, address & Signature

Father's name

Grand Father's Name

Name, address and Signature of Witness

Sd. 1. Mr. Jagannath Mahaseth, authorized person from Ministry of Agriculture and Cooperatives of Government of Nepal Designation: Regional Agriculture Director 2. Mr. Lalamani Ojha, authorized person from the Ministry of Local Development of Government of Nepal Designation: Under secretary 3. Mr. Devabhakta Sakya, authorized person from Federation of Nepalese Chamber of Commerce and Industries Designation: Executive Director, Agro Enterprize Centre 4. Mr. Ashok Kumar Muraraka, authorized person from Ilam Tea producers Pvt. Ltd Designation: Director Address: 42, Gosawara road, Biratnagar

Sd. 1. Name..................... Address..................... District...................... ............................Municipality/VDC ward No..............block no........................ Telephone............ Fax.............. E-mail......................... Post Box No................. Right Left


5. Mr. Yubaraj Gautam, authorized person from Shree Bahumukhi Krishi Sahakari Sanstha Limited Designation: Chairperson Address: Mahendranagar-9, Salwani, Sunsari 6. Mr. Meghendra Gurung, authorized person from Sindhuwa Bahuuddeshiya Sahakari Sanstha Limited Designation: Marketing Chief Address: Sindhuwa Bazar, Dhankuta 7. Mr. Bhalakaji Rai, authorized person from TankiSinaKrishi Upaj Bazar Byabasthapan Sahakari Sanstha Limited Designation: Member Address: Tankisinuwari-1, Morang 17. Declaration of the Promoter of the Company:

The name, address, signature of us and details of witness including all other

particulars stated in this Memorandum are correct. We are agreed to fulfil the

obligations arising upon incorporation of the Company on the basis of the

above-mentioned particulars. We have made this declaration with the consent

that we shall be liable to any punishment imposed under the prevailing law in

the case of misrepresentation of facts or the declaration made under this

Section is proved false.

1. Mr.Jagannath Mahaseth

2. Mr. Lalamani Ojha

3. Mr. Devabhakta Shakya

4. Mr. Ashok Kumar Muraraka

5. Mr. Yubaraj Gautam

6. Mr. Meghendra Gurung

7. Mr. Bhalakaji Rai

Appendix 1, page 1

COMMERCIAL AGRICULTURE ALLIANCE AND COMMERCIAL AGRICULTURE FUND

A. Commercial Agriculture Alliance

1. The Project has established a commercial agriculture alliance (CAA) in 2006 as a not-for-profit company under the Company Ordinance1 and will establish a commercial agriculture fund (CAF). Both are mechanisms to improve the effectiveness of project delivery and to demonstrate approaches to accelerate commercialization. The CAA is intended to provide a forum for stakeholder interaction and a means to access grant funding for investments that will strengthen the process of commercialization of agriculture. The CAA will manage the CAF, which will only be accessible to CAA members. 2. The head office of the CAA is located at Biratnagar (Morang District). The CAA has an elected board and a management team headed by a general manager assisted by a company secretary, compliance officer, chief accountant, and other support staff.2 CAA headquarters staff will have adequate representation of women, who will make up at least 25% of CAA management. The CAA will have a branch in each of the 11 districts.

1. Membership

3. The CAA will have two membership categories: general members and nominated members. General members comprise farmer groups or cooperatives, traders, and processors engaged in commercial agricultural activities within the project area. Nominated members include (i) the Ministry of Agriculture and Cooperatives, and Ministry of Local Development; (ii) district development committees (DDCs) of the 11 project districts; and (iii) the Agro Enterprise Center. 4. Specific membership criteria for general CAA members are set out in the Memorandum of Association:

(i) Commercial stakeholders must have been engaged, for at least 2 years, in for-profit, agriculture-based production, processing, or trading within districts covered by the CAA.

(ii) Farmer cooperatives or groups must (a) have at least 25 active members (demonstrated by reference to the cooperative or group's current accounts, proceedings of meetings or activities, or other formal written records); and (b) be able to demonstrate sales of agricultural products of not less than Rs500,000 in at least 1 of the 2 years immediately preceding membership in the CAA.

(iii) Traders or processors must (a) be constituted as a legal entity or otherwise officially licensed to engage in commercial business activities; and (b) demonstrate sales of not less than Rs500,000 from a main base

1 Copies of the CAA’s Articles of Association and Memorandum of Association are in Annexes A and B to

this Appendix. The CAA’s Standard Operating Procedures and Code of Conduct are in Annexes C and D. CAA’s Business Plan will also be annexed to this appendix once approved and adopted by the Board of CAA.

2 The other staffs at CAA headquarters include a senior office assistant/computer operator, and service personnel.

Appendix 1, page 2

located within the districts covered in the year immediately preceding membership in the CAA .

5. Benefits of CAA membership for commercial agricultural stakeholders include:

(i) access to the CAF and benefits arising from funded investments; (ii) opportunity to network with other market-chain stakeholders and benefits

arising from this; (iii) participation in development of more effective and more secure marketing

arrangements; (iv) beneficial information arising from market surveys, product market-chain

analyses, technological information, and market information systems; and (v) access to training and capacity improvement, and thereby more leverage

in negotiations with other stakeholders.

6. Project activities in identifying high-value crop (HVC) production areas and marketing projects and in market chains to familiarize stakeholders with the project objectives and activities, and an initial round of stakeholder workshops (based on baseline survey data and product chain analyses) will stimulate interest in CAA membership; significant CAA membership is not anticipated for 4 to 6 months. Annual promotional campaigns will be held to stimulate, encourage, and maintain membership.

2. CAA Headquarters

7. Role of CAA Headquarters. CAA headquarters in Biratnagar will undertake:

(i) final screening and approval of grant applications under the CAF; (ii) necessary disbursement of the grant funds to intended recipient(s); (iii) maintenance and updating of the membership registry, including issuance

of membership cards; and (iv) coordination of branch activities.

8. CAA Board. The CAA board will have a maximum of 11 board members (with at least two female representatives):

(i) six representatives from the general members, (ii) two representatives from Government agencies, (iii) two representatives from the DDCs, and (iv) one representative from the Agro Enterprise Center.

9. General Manager. At CAA headquarters a general manager will assume the role of a chief executive officer. The tenure of the general manager will be for 3 years and he/she may be reappointed on satisfactory performance. The general manager will be jointly recruited by the Government and the Asian Development Bank (ADB) through a competitive and transparent process, and will be formally appointed by the CAA board of directors. He/she should possess the following minimum qualifications and experience:

(i) at least a baccalaureate degree in finance, commerce, management, economics, or other related field;

(ii) general familiarity with the agriculture sector and its importance in Nepal;

Appendix 1, page 3

(iii) good understanding of financial management and analysis, investment planning and analysis, project appraisal, and credit distribution; and

(iv) substantial working experience as a manager in a relevant institution, preferably in banks and financial institutions or adequate working experience as a project manager and/or financial expert for any internationally funded project.

10. Appraisal Panel. A CAA headquarters appraisal panel will make the final review and approval of applications for CAF funding. The panel will comprise (i) two board members; (ii) the general manager; and (iii) two technical experts, who will be selected by the board from a list prepared by the general manager. The chair of the panel will be selected from among its members. The tenure of board members and the technical experts will be for a period not to exceed 2 years. 11. Good Governance. To enhance good governance in CAA operations, the CAA board of directors will adopt (i) standard operating procedures that incorporate principles of equitable participation of women and include provisions to prohibit any discriminatory or prejudicial measures against minorities and/or disadvantaged groups; and (ii) a code of conduct that incorporates conflict of interest rules for staff and members of the board of directors acceptable to ADB. Other measures include the requirement for the CAA general manager, appraisal panel members, and compliance officer to disclose their wealth prior to and upon completion of their assignments. The disclosure must be made in a manner that allows public access to this information. An annual performance audit will review all CAA disbursements within a particular year to the intended recipients of the CAF, and evaluate the extent to which proper and timely disbursements were made.

3. District Operation of the CAA

12. Role of the CAA District Branch. The district branch will:

(i) receive and process membership registrations, and submit a recommendation letter to CAA headquarters for formal membership registration;

(ii) undertake initial review and selection of CAF proposals; and (iii) undertake other responsibilities assigned by the CAA general manager.

13. Branch Manager. The CAA general manager will select a CAA branch manager for each district branch, using a competitive and transparent process. The branch manager will be assisted by a finance and administration officer, monitoring and evaluation officer, and other support staff.3 The CAA district staff will have adequate representation of women. The branch manager, who will report to the general manager, will have a 2-year tenure, renewable on satisfactory performance. 14. District Review Committee. A district review committee will be formed at each district branch to undertake the initial review and selection of CAF proposals submitted by CAA members within the district. The district review committee will comprise:

(i) the branch manager; (ii) two CAA general member representatives;

3 The other staffs in the district branch include an office assistant/computer operator, and service person.

Appendix 1, page 4

(iii) one DDC representative; (iv) one representative from the district agriculture development office; (v) the women development officer from the district women development

office; and (vi) one external technical expert.

15. The branch manager will chair the committee. The technical expert will be selected by the general manager from the list prepared by the branch manager. The tenure of the technical expert and the CAA general member representatives will be for a period not to exceed 2 years. The district review committee may seek technical advice from external parties to facilitate initial screening of CAF applications. B. Commercial Agriculture Fund

16. The CAF is a cost-sharing grant facility managed by the CAA. Funds are available to CAA general members and the DDCs to strengthen market-chain activities and develop linkages within the market chain. 17. Investments. CAF financing will be allocated equally to (i) community-based market infrastructure investments; and (ii) noninfrastructure investments. A maximum of $80,000 will be provided for each community-based market infrastructure intervention and a maximum of $20,000 for each noninfrastructure investment. The allocation of the CAF to specific districts will vary according to need. Each general member can obtain a maximum of $40,000 on cumulative basis, and each DDC a maximum of $320,000 on cumulative basis. 18. General Criteria. Proposals for interventions for CAF financing must meet the following criteria:

(i) add value to agricultural products, (ii) benefit other agricultural stakeholders and the community as a whole, (iii) improve market-chain efficiency, (iv) incorporate public good content, and (v) have strong demonstration effects on the rest of the community.

19. Applications must be demand driven and identified by stakeholders themselves. Contracted service providers, e.g., nongovernment organizations, will provide assistance with proposal preparation to the less advantaged. Additional assistance may include technology and skills training, capacity building (of groups) technical assistance, and equipment. Entities affiliated with members of the appraisal panel will not be allowed to submit proposals for CAF financing. 20. Cost-Sharing. For community-based market infrastructure, the CAF will finance 75% of the investment cost. The community will provide 10% of the investment cost in the form of labor and in-kind contributions, and the DDC will finance the remaining cost in the form of technical services, field appraisal, and assessment. For noninfrastructure investments, the CAF will finance a maximum of 50% of the investment cost; the direct beneficiaries will cover the remaining cost.

Appendix 1, page 5

21. Initial Review and Selection of CAF Proposals. CAA members will apply for CAF assistance through the CAA district branch.4 The branch manager will forward proposals for noninfrastructure investments to the district review committee for their evaluation on whether the proposals meet the predetermined criteria. Proposals meeting the criteria will be submitted to the appraisal panel at CAA headquarters for final review and approval. 22. Village development committees and community groups will prepare the proposals for community-based market infrastructure. The proposals will be submitted to the DDC, which will undertake initial screening with the CAA district branch to ensure (i) no duplication with other development programs in the district, and (ii) adequate appraisal of the technical and basic financial feasibility of the proposal. Proposals meeting the criteria will be submitted to the appraisal panel at CAA headquarters for final review and approval. 23. Indicative List. Community-based market infrastructure investment proposals may include (i) small collection centers, (ii) small markets (haat bazaar), (iii) ropeways/suspension bridges, (iv) farm-to-market road improvement including culverts and swing bridges, (v) small-scale cold/cool storage, and (vi) storage facilities. Priority will be given to civil works that link farmers more effectively to the market chain. 24. Noninfrastructure investment may take the form of (i) laboratory equipment for product testing, quality control laboratory establishment, specialized items of processing equipment required to extend the life or market of a new product, packaging development of farm-gate to market systems, and transportation systems; (ii) technology and training assistance to improve farm-to-market product packaging and transportation, and primary processing methods; and (iii) promotional activities such as trade fairs and trade promotion, product identification, branding, labeling, certification, feasibility studies, quality mark initiatives, brand and intellectual property right protection, broad marketing and specialized skill development, and employment strategy formulation.

25. Fund Utilization. The fund will be utilized during project implementation and will lapse on project completion.

4 An exception is when proposals apply to more than one district. This will occur when a whole marketing

chain is being addressed as in the case of a quality assurance or transport improvement proposal. In this case, the CAA headquarters can receive the proposal but refer it to the respective district branches for comment before final appraisal and approval.

Appendix 2, page 1

PARTNERSHIPS WITH NONGOVERNMENT ORGANIZATIONS

A. Rationale 1. The Project will enter into partnership arrangements with nongovernment organizations (NGOs) to assist subsistence and semi-commercial stakeholders—farmers, traders, and processors—who are not eligible for commercial agriculture alliance (CAA) membership but have potential to develop such eligibility if they receive support to overcome their difficulties. These stakeholders are generally engaged in subsistence activities or some small-scale commercial undertakings. With support from the partner NGOs, stakeholders who are producing only enough for subsistence are expected to be able to generate additional income and take up commercial activities, while those already engaged in commercial activities beyond their subsistence needs will be able to increase their turnover and become eligible for CAA membership. 2. The project inputs that the partner NGOs will deliver to such stakeholders include community mobilization, social inclusion activities, farmer group formation and strengthening, and monitoring and evaluation. The types of services to be provided by the NGOs will be specified in the partnership agreement reflecting the needs of the target groups, capacity of the partner NGO, and commercial agricultural focus of the Project. 3. The partner NGOs are preferably based in the Eastern Development Region (EDR) and registered in one of the districts in the project area. They should preferably have experience working in more than one district. Any exception to this must be justified and documented.

4. The project management unit (PMU) will enter directly into partnership agreements with several NGOs. The actual number will depend on the capacity of the NGO and ability of PMU staff to provide effective and meaningful time inputs to support the partner NGOs. Depending upon the existing skill mix of partner NGOs and type of support needed in the district, the PMU may engage more than one partner NGO in the same district but in separate locations or on different tasks. This will increase collaboration and mutual learning together with a feeling of competitiveness for quality between partner NGOs. 5. The partner NGOs will engage local NGOs that are working closely with the communities in the project area for particular services and functions. The partner NGOs will provide training and coaching to their local counterparts as required to enhance performance quality. The application submitted by the NGO for partnership with the PMU will give the names and description of the counterpart local NGOs they work with and the selection criteria they applied. The capacity-building activities of local NGOs will contribute to sustainability, decentralization, and local acceptance/ownership of activities supported by the Project. 6. As agricultural marketing is a new area of activity, capacity building of partner NGOs and through them of local NGOs is required to enable them to effectively fulfill their roles. When local NGOs are strengthened they will be able to provide ongoing services to the disadvantaged, poor, and women; and produce lasting improvements in their living conditions. Efforts will be made to develop decentralized NGO-based support services. 7. To make services to these stakeholders relevant and effective, different services will be required at different stages during the development life-cycle of local organizations and groups. The PMU will regularly assess and plan jointly with the partner NGOs and farmer organization leaders for more advanced capacity development. Proposed services will also take into account

Appendix 2, page 2

the target beneficiary’s opportunities and constraints (season, time, duration, frequency, and time gaps). 8. The basic philosophy of the relationship between the Project and partner NGOs will be one of partnership,1 where both parties have equal status and responsibilities. B. Procedure for Partnership Agreements

9. The rational for the Project to engage partner NGOs that are well established in the region is to ensure that they are accepted by the communities and have substantial knowledge of local circumstances. These potential project partners may lack capacity in some areas and the Project will address these through training, advisory, and support services. A transparent and self-screening approach that is sensitive to local issues in the current conflict context is proposed. 10. The Project will initiate a series of steps for selecting NGOs for partnership arrangements.

(i) The PMU will provide an orientation for NGOs from the EDR to present and discuss the project concept and program, potential partnership opportunities, criteria for NGO partnership selection, and project expectation of NGOs.

(ii) The PMU will place advertisements in local newspapers and informal networks of district development committee, line agencies, and NGOs calling for applications from interested NGOs. Project staff will be available to help NGOs draft their applications.

(iii) The applications will contain (a) evidence of compliance with the basic criteria for partnership selection; (b) a description of the locally based counterpart NGOs they work with and the

selection criteria; (c) a statement of activities they propose undertaking under the Project to

help develop socially inclusive commercial agriculture; (d) a description of shortcomings (organizational or technical) they have

identified to undertake the Project; and (e) a description of specific project assistance or support (technical training,

materials, equipment, funds, or any other support) they require to become an effective partner.

(iv) PMU staff will undertake screening, evaluation, and field verification of the applications on the basis of a predetermined set of criteria. The project manager will approve the application for an initial 1-year program extendable to 2-year renewable agreements on satisfactory performance.

(v) Once partnership agreements are issued, the selected NGOs will begin work on the agreed work plan and concurrently be provided with capacity improvement training and support in three key areas to achieve a standard level of capability between partner NGOs: (a) social mobilization, community needs assessment, awareness raising,

group formation and development (groups, associations, cooperatives), public audit approaches, facilitation, and social inclusion modalities;

1 Precedence has been established in the Third Livestock Development Project, which implemented 78 such

partnership agreements. Modalities and policies to accommodate the approach are established within the Ministry of Agriculture and Cooperatives.

Appendix 2, page 3

(b) market process competence (agribusiness; market-chain awareness; farmer-initiated market-chain linkages; basic primary value-adding activities such as farm-gate processing and quality improvement; and cleaning, grading, drying, and handling methods); and

(c) organizational strengthening in management, accounting, and auditing. (vi) The PMU will provide supplementary training as required and according to the

emerging needs of the work plan, e.g., participatory rural appraisal, product processing, or more advanced agribusiness development.

(vii) Project staff will monitor NGO work plan implementation for commitment, quality of work, and relationship with the community.

(viii) In the event of noncompliance or poor performance, the partnership agreement will be terminated and the selection process will begin again.

(ix) The NGO partner will be required to provide the PMU with quarterly reports on implementation progress, issues, and achievements; plus annual audited statements and annual reports.

(x) In the event an application is not accepted in the screening and approval process, the application will be returned to the applicant with comments and suggestions for improvement.

C. Basic Eligibility Criteria for Partner NGO Selection 11. To be eligible for a partnership agreement with the Project, the NGO must, at a minimum:

(i) be appropriately registered, preferably in an EDR district and have legal status; (ii) have operated continuously for at least 2 years, preferably in the project districts; (iii) have a track record of community mobilization and social inclusion with similar

target groups and in similar areas; (iv) have experience or demonstrable competence of working with locally based

counterpart NGOs and acceptance of the communities; (v) demonstrate the quality of their work, commitment to programs, and relationships

with the community; (vi) have produced annual audited reports and accounts for the last 2 years; (vii) have basic capability in management and accounting; and (viii) expressed willingness to participate in the Project and to adopt its cross-cutting

values of equity, partnership, participation, gender, and transparency.

Appendix 3

SELECTION PROCESS AND CRITERIA FOR SERVICE PROVIDERS 1. The project management unit (PMU) will contract selected service providers to deliver specialized services including advanced training to commercial stakeholders, district staff of the Department of Agriculture, and partner nongovernment organizations (NGOs). The specific areas include product processing, use of processing equipment, quality assurance systems, market-chain development, market information system, investment analysis, and organizational development. Service providers may be individual consultants or consulting companies, teaching or research institutes, industry, Agro Enterprise Center, chambers of commerce, specialized NGOs, and others. 2. The PMU will select service providers who are suitable for the tasks and objectives to be achieved using ADB’s least cost selection procedures. The contract document will specify the tasks, work plan, reporting requirements, costs, and provision of supervision and guidance by the PMU. 3. Service providers will be selected on the basis of

(i) legal status and recognition (in the case of organizations); (ii) at least 3 years of continued operation; (iii) track record of providing services in the proposed field and effectiveness; (iv) demonstrated skills in the field of proposed service; (v) transparency of accounts and decision making; (vi) evidence of local acceptance; and (vii) willingness to work with partner NGOs, local bodies, government agencies,

farmers, processors, traders, and others in the value chain.

Appendix 41

DETAILED COST ESTIMATES

Table 1: Project Components by Financiera

($ million)

ADB Government of Nepal

CAA General Members DDCs Farmer

Communities Total Items

Amount % Amount % Amount % Amount % Amount % Amount %

Commercial Agriculture Investment and Management

10.4 66.0 0.0 0.2 4.0 25.4 0.8 5.1 0.5 3.4 15.7 65.3

Inclusive Development of Stakeholders 4.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.0 16.5 Market Information Dissemination 0.3 99.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 1.4 Project Partners Capacity Enhancement 0.2 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.9 Project Implementation Support 3.1 80.9 0.8 19.1 0.0 0.0 0.0 0.0 0.0 0.0 3.9 15.9 Total Project Costs 18.0 74.7 0.8 3.2 4.0 16.6 0.8 3.3 0.5 2.2 24.1 100.0 ADB = Asian Development Bank, CAA = commercial agriculture alliance, DDC = district development committee. a All costs in the table are inclusive of base costs and the physical and price contingencies. Source: Asian Development Bank estimates.

2

Appendix 4

Table 2: Expenditure Accounts by Financier

($ million)

ADB Government of Nepal

CAA General Members

DDCs Farmers Communities

Total Item

Amount % Amount % Amount % Amount % Amount % Amount %

Foreign Exchange

Local (Excl. Taxes)

Duties and Taxes

I. Investment Costs A. Commercial Agriculture

Fund 8.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.0 33.1 0.0 8.0 0.0

B. Matching Fund from CAA, DDCs, VDCs

0.0 0.0 0.0 0.0 4.0 75.0 0.8 15.0 0.5 10.0 5.3 22.1 0.0 5.3 0.0

C. Consulting Services 1. International

consultants 0.7 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 2.8 0.7 0.0 0.0

2. National consultants 1.7 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.7 7.1 0.0 1.7 0.0 3. Consulting support staff 0.2 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.7 0.0 0.2 0.0 Subtotal (C) 2.5 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.5 10.6 0.7 1.9 0.0 D. NGO-Implemented Social

Inclusive Activities 3.1 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.1 12.9 0.0 3.1 0.0

E. PMU-Organized Training and Workshops

1.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3 5.3 0.0 1.3 0.0

F. Vehicles and Equipment 1. Vehicles and

motorcycles 0.2 80.1 0.1 19.9 0.0 0.0 0.0 0.0 0.0 0.0 0.3 1.3 0.2 0.1 0.1

2. Office equipment and furniture

0.2 87.5 0.0 12.5 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.9 0.1 0.1 0.0

Subtotal (F) 0.4 83.2 0.1 16.8 0.0 0.0 0.0 0.0 0.0 0.0 0.5 2.2 0.2 0.2 0.1 G. Surveys, Monitoring, and

Auditing 0.1 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.5 0.0 0.1 0.0

H. Market Information and Dissemination

0.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 1.3 0.0 0.3 0.0

I. CAA Promotion and Auditing

0.2 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.8 0.0 0.2 0.0

J. PMU Staff and Operation 1. PIU staff 0.0 0.0 0.3 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 1.1 0.0 0.3 0.0 2. PMU overhead and

operation 0.0 0.0 0.4 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 1.7 0.0 0.3 0.1

Subtotal (J) 0.0 0.0 0.7 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 2.8 0.0 0.6 0.1 K. CAA Staff and Operation 1. CAA staff 1.2 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 5.2 0.0 1.2 0.0 2. CAA operationa 0.8 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 3.3 0.0 0.7 0.1 Subtotal (K) 2.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.0 8.4 0.0 1.9 0.1 Total Investment Cost 18.0 74.7 0.8 3.2 4.0 16.6 0.8 3.3 0.5 2.2 24.1 100.0 0.9 23.0 0.2

II. Recurrent Costs Total Project Cost 18.0 74.7 0.8 3.2 4.0 16.6 0.8 3.3 0.5 2.2 24.1 100.0 0.9 23.0 0.2 ADB = Asian Development Bank, CAA = commercial agriculture alliance, DDC = district development committee, NGO = nongovernment organization, PIU = project implementation unit, PMU = project management unit, VDC = village development committee. a Including the external auditing of CAA performance. Source: Asian Development Bank estimates

IMPLEMENTATION SCHEDULE

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Component 1: Commercial Agriculture Investment and Management1. Appointment of CAA general manager and company secretary2. Fully staffing of CAA and district branches 3. Establishment of CAF 4. Information dissemination aimed at balanced membership in CAA5. CAA membership registration 6. Election of CAA Board of Directors7. Information dissemination about CAF financing and eligible investments8. Screening, verification and approval of subproject investment proposals

- Community-based market infrastructure investments- Non-infrastructure investments

9. Community-based market infrastructure investment contracts withDDC and implementation

10. Non-infrastructure investment contracts with CAA general members andimplementation

Component 2: Inclusive Development of StakeholdersA. Development of Subsistence Agricultural Stakeholders1. Partnership agreements with NGOs 2. Identification of HVC production areas and marketing points 3. Assistance on production and marketing of off-season vegetables and HVCs4. Farmers grouping on marketing 5. Networking farmer groups with others in the value chain 6. Skill-based training for the landless in transport, packaging, production,

primary processing, tool making, and servicing

B. Enhancement of Semi-Commercial Agricultural Stakeholders1. Partnership agreements with NGOs2. Assisting farmers groups to organize into associations or cooperatives3. Strengthening semi-commercial stakeholder groups in accounting, bookkeeping

and group management4. Building market chain awareness and linkages5. Improving quality assurance system 6. Upgrading production and primary processing technology 7. Training on entrepreneurship development and business planning8. Assist strengthened farmers groups in applying for CAA membership and preparing

subprojects on community-based market infrastructures to apply to CAA through DDC

C. Promotion of Social Inclusiveness among Commercial AgriculturalStakeholders

1. Contract with service providers2. Awareness training on social, gender, and environmental issues and

responsibility

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6Component/ Activity

Appendix 5 1

2 Appendix 5

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Component 3: Market Information Dissemination1. Establish integrated market information system2. Develop and provide training on market information sharing system at farmers

marketing group level 3. Collecting and disseminating information on size of demand, price, and

expected delivery time at different markets

Component 4: Project Partners Capacity Enhancement1. Project standardization training on project details and cross-cutting values to

all partners2. Basic marketing development training to all partners3. Training for partner NGOs on various topics including social mobilization4. Training for DOA staff on various topics of commercial agriculture 5. Training for CAA district branch staff on subproject proposal evaluation and others

Component 5: Project Implementation Support1. Establishing PSC 2. Recruiting Package A consultants3. Recruiting Package B consultants4. Fully staffing of PMU in Biratnagar5. Preparing project implementation guidelines on various subjects6. Establishing complaints redressal mechanism7. Procuring materials, equipments and vehicles8. Holding PSC meeting twice a year9. Conducting baseline survey10. Conducting product chain studies 11. Establishing results monitoring framework12. Installation of notice boards regarding services available and the procedure,

timing and contact person for obtaining the services13. Holding workshops for beneficiary monitoring14. Annual socioeconomic survey on project impacts15. Financial and project reporting and auditing

CAA = commercial agriculture alliance, CAF = commercial agriculture fund, DDC = district development committee, DOA = Department of Agriculture, HVC = high-value crops, MOAC = Ministryof Agriculture and Cooperatives, NGO = nongovernment organization, PMU = project management unit, PSC = project steering committee.

Component/ ActivityYear 1 Year 2 Year 3 Year 4 Year 5 Year 6


RECRUITMENT/SELECTION PROCEDURES FOR CONSULTANTS AND OTHER SERVICES UNDER THE PROJECT

A. Individual Consultant Selection

1. Recruitment Procedures The following procedures shall be used to recruit individual consultants (Figure 1 also presents the flowchart for recruiting individual consultants for loan/grant projects): • EA prepares and submit to ADB the short list of consultants (at least 3). The consultants

should be geographically spread, i.e. one from each ADB developing member countries (applicable only for shortlisting international individual consultants)

• EA ranks the candidates, and submits their names and qualifications, and the draft contract

(sample contract format is in Annex B) to be used for the engagement to ADB for approval. Forms to guide the EA in its submissions (Submission 1 and 2) are in Annex C.

• When the assignment budget is more than $600,000 equivalent, ADB convenes a consultant

selection committee meeting to review and approve the EA’s documents. • After obtaining ADB’s approval on the ranked short list and draft contract, the EA negotiates

with the first-ranked candidate. If the negotiations fail, the EA obtains ADB’s approval to negotiate in turn with the next-ranked candidate until agreement is reached.

2. Contract Execution After concluding negotiations, but before signing of the contract, the EA sends a copy of the draft negotiated contract to ADB for approval. Promptly after the contract is signed, the EA sends 3 copies of the signed contract to ADB. If any substantial amendment of the contract is proposed after its execution, the proposed changes shall be submitted to ADB for prior approval.

3. Terminating Contracts If the EA proposes to terminate a contract with an individual consultant, it sends a recommendation to ADB including (i) adequate background information and justification for the proposed termination, (ii) a summary of the required adjustments or remedial action, and (iii) a proposal on how the assignment will be completed. ADB decides whether termination is warranted, and advises the EA of the decision. When ADB approves termination, the EA sends a written notice to the consultant, in accordance with the provisions in the contract.


Figure 1

Consultant Executing Agency ADB

Submitsexpression of interest

Prepares shortlist (at least 3) andranks candidates on the list

Sends copy fo signed contractto ADB

Sends copy fo signed contract andnotice to proceed to consultant

User division approves EA's documents

Recruiting Individual Consultants for Loan Projects

Confirms availability

Negotiates and signs contract

Prepares a procument planFact-finding mission assesses EA

and helps prepare a procument plan

If desired, asks ADB for list of qualified candidates from DICON,

lists on ADB's web site and advertises in local newspapers

User division provides list of qualified candidates from DICON,

if requested

Checks availability of first-ranked candidate on a noncommittal basis

If requested in procurement plan, submits candidates' names,

qualifications and draft contract to ADB

Starts work

User division retains copy of contract

Negotiates with first-ranked candidate, finalizes and signs


B. Quality- And Cost Based Selection (QCBS) Procedures

When the EA uses QCBS, the following procedures shall apply (Figure 2 presents the flowchart for recruiting firms using QCBS):

1. Selecting a Short List.

The EA first reviews the detailed TOR and then prepares a long list, which normally includes 15–20 technically qualified consultants with experience in similar projects. The EA normally includes all the qualified consultants that expressed interest. The EA may ask ADB for a list of qualified consultants from its database. The EA decides whether to include any of these consultants on the long list and may also add other experienced consultants to the list. The EA then prepares a short list of 6 consultants. The consultants should be geographically spread and normally at least one should come from an ADB developing member country (applicable only when shortlisting international consulting firms). The EA next prepares the request for proposal (RFP) documents using ADB’s Harmonized Request for Proposal (RFP) for the Recruitment of Consulting Firms for Loans Projects for All Selection Methods (available at http://www.adb.org/Consulting/all-methods-loan.asp). The RFP states the EA’s budget for the assignment and that the costs of the financial proposals, after the EA evaluates them, are expected to be within this budget. 2. ADB Review/Approval of the EA’s RFP Short Listing Documents The EA then submits to ADB for approval the following documents in ADB’s standard format (called “QCBS Submission 1” among the templates available from the captioned website): (i) the TOR and background information; (ii) the RFP, including the EA’s budget for the assignment, the selection method and the type of technical proposals; (iii) the criteria for evaluating the technical proposals; (iv) the draft contract; and (v) the Consultant Recruitment Activity Monitoring (CRAM) frame (a sample is provided in Annex D).

After ADB approves the documents, the EA sends the RFPs to the consultants on the short list and provides ADB with a copy of the RFP as issued. 3. Evaluating Technical Proposals After receiving the consultants’ proposals (the EA rejects any proposal received after the deadline for submission), the EA then evaluates the technical and financial proposals in two stages – first the quality of the technical proposals and, second the cost of the financial proposals. When the EA receives the consultants’ proposals, it first securely stores the unopened financial proposals. The EA’s consultants selection committee (CSC) then evaluates the technical proposals using the approved evaluation criteria. The CSC prepares minutes of its evaluation meeting and a report on its evaluation, describing the strengths and weaknesses of each proposal.

4. ADB Review/Approval of the EA’s Technical Evaluation Documents

The EA submits to ADB for approval the technical evaluation documents in ADB’s standard format (called “QCBS Submission 2” in the ADB website). The documents include: (i) the summary evaluation sheet, highlighting any proposal that scored less than 750 points out of 1,000; (ii) a personnel evaluation sheet for each proposal; (iii) comments on the strengths and weaknesses of each proposal, and (iv) minutes of the evaluation meeting(s).

http://www.adb.org/Consulting/all-methods-loan.asp





5. Public Opening of Financial Proposals After obtaining ADB approval of the technical evaluation, the EA advises the firms whose technical proposals scored 750 points or more of the time and place where it will publicly open their financial proposals. The EA also advises ADB when and where it will conduct the opening. The EA also advises any consultants whose technical proposals scored less than 750 points that that they were unsuccessful and that the EA will return their financial proposals unopened at the end of the selection process.

At the opening, the EA (i) asks the people attending to sign an attendance sheet, (ii) reads aloud the technical scores of the qualified firms, (iii) opens the financial proposals and reads aloud the total prices, and (iv) indicates the likely schedule for contract negotiations and commencement of assignment. The EA keeps all the other information in the financial proposals confidential. After the opening, the EA sends a letter advising the qualified firms, whether or not they attended, of the technical scores and total prices for each qualified firm. 6. Evaluating Financial Proposals The EA next evaluates the financial proposals and records the results on standard forms (forms/templates are also available from the ADB website). The EA calculates an evaluated price for each proposal using the procedure specified in the RFP. The evaluated prices should be within the assignment budget stated in the RFP. However, the EA does not necessarily disqualify a proposal that exceeds the budget. The EA then calculates the score for each financial proposal. The EA gives the lowest priced proposal a score of 1,000 points. To calculate the scores of the other proposals, the EA divides the price of the lowest priced financial proposal by the price of the financial proposal being considered and multiplies the result by 1,000. Evaluations of financial proposals are confidential and the EA only discloses the details to the ADB or EA staff directly involved in the evaluations. Any other person who tries to influence an evaluation will be subject to ADB’s anticorruption policy.

The EA calculates the final score for each consultant by adding the agreed weighting of the technical score to the agreed weighting of the financial score (for CADP, the quality-cost ratio of 80:20 shall be used). The EA then ranks the consultants based on their final scores and prepares an evaluation report.

7. ADB Review/Approval of the EA’s Financial Evaluation and Overall Ranking Documents

After completing the evaluation, the EA submits to ADB for approval the financial evaluation and final ranking documents in ADB’s standard format (termed “Submission 3” in the ADB website). The documents include the minutes of the public opening, the financial evaluation report, the ranking, and the minutes of the financial evaluation meeting(s). ADB advises the EA of its decision.

It should be noted that ADB’s approval is final and it does not consider any revised rankings submitted later. If the EA has not followed the agreed selection procedures, ADB reserves the right not to finance the assignment.


8. Negotiating the Contract After obtaining ADB approval of the financial evaluation and overall ranking, the EA then writes to the first-ranked consultant and advises that it wishes to negotiate a contract. The EA normally conducts the negotiations face-to-face. The letter: (i) invites the consultant to send a representative to the EA’s offices, who is prepared to discuss the consultant’s proposals and has the authority to finalize and sign a contract; (ii) proposes a schedule and agenda; (iii) asks the consultant to confirm the availability of all the team members nominated in its technical proposal; and (iv) summarizes any issues identified during the evaluation that require clarification, any deficiencies to be corrected, any team members to be replaced, or any other corrective action to be taken. The consultant must pay all its representative’s costs to attend the negotiations. The negotiations cover the TOR, the consultant’s methodology and work plan, the team members and personnel schedule, the counterpart facilities the EA will provide, the financial terms, and the other terms and conditions in the contract. The EA prepares minutes of the important points of agreement. If the EA and the consultant cannot reach agreement, the EA may ask ADB’s agreement to terminate the negotiations and start negotiations with the next-ranked consultant, in turn until it reaches an agreement.

9. ADB Review/Approval of the EA’s Draft Contract

After concluding negotiations, but before signing the contract, the EA submits to ADB for approval the draft negotiated contract and the minutes of the contract negotiations in ADB’s standard format (called “QCBS Submission 4” in the ADB website). ADB advises the EA of its decision.

10. Finalizing the Contract After receiving ADB’s approval, the EA signs the contract, obtains the consultant’s signature, and provides ADB 3 copies of the signed contract for its records.1 The EA also submits the following information for ADB to publish on its web site: (i) the names of the short listed consultants who submitted proposals; (ii) the scores for their technical proposals; (iii) the prices in their financial proposals (for QCBS); (iv) the overall ranking (for QCBS); (v) the name of the consultant selected; and (vi) the amount of the contract. After completing the negotiations, the EA returns the unopened financial proposals of the consultants whose technical proposals scored less than 750 points. The EA also briefs the short listed consultants when asked.

11. Terminating the Contract When an EA proposes to terminate a contract with a consultant, it sends a recommendation to ADB. ADB decides whether termination is warranted, and advises the EA of the decision. When ADB approves termination, the EA sends a written notice to the consultant, in accordance with the provisions in the contract.

1 If any substantial amendment of the contract is proposed after its execution, the proposed changes shall be

submitted to ADB for prior approval.


Figure 2

CONSULTANT ADB

User division listsproject in ADBBO

Discusses Terms of Reference Appraisal mission discussesterms of reference Developed terms of reference

Receives expressionsof interest

SUBMISSION 1

Receives RFP and User division sends prepares technical comments/approval to EA

& financial proposals

Receives proposals, storesunopened financial

proposals

SUBMISSION 2

User division sendscomments/approval

Receives copy

(attendance is optional)

User division reviews & approves if </+$600,00 and submits to COSO on a no-

objection basis; asks COSO to convene CSC if >$600,000





to EA

consultants

evaluation report, and submits to ADB

evaluate technical proposals

EXECUTING AGENCY

PR

EPA

RATI

ON

User division provideslist of firms from DACON

CSC prepares shortlist,

and submits to ADB

Sends RFP to shortlisted

Submits technicaland

financial proposals

CSC members

financial proposals

financial proposals

technical proposals, prepares

of notification

to EAminimum technical requirement

Advises technically qualified

SUBMISSION 3

Evaluatesfinancial proposals

CSC ranks proposals, preparesranking report, and

Receives to EAsigned contract

Unsuccessful consultants signed contractReceives

financial proposals returns unopened financial

Selected consultant proposals, issues notice to

proceed to selected consultant

receive advice and unopened Advises unsuccessful consultants,

Advises consultants whose

consultants of time,date,

Publicly opens

Arranges to attend

Receives proposals did not meet

Recruiting Consulting Firms for Loan Projects Using QCBS

Reviews ADBBO oradvertisement and sends

expression of interest

Advertises project innewspapers, etc.

Prepares long listof consultants

CSC meeting ranks

and draft contract

to contract negotiations

submits to ADB

Invites first-ranked consultant

approves

copies to consultant and ADB

Sends approval

User divisionSUBMISSION 4

Sends approval

reviews and

and place for opening a representative

EA's advice

opening or nominates

RFP, and evaluation criteria,

CO

NTR

ACT

ING

starts work

Sends representative to

SEL

ECT

ION

Negotiates contract, submitsto ADB minutes of negotiations

Finalizes contract and sends

contract negotiations


C. Least Cost Selection (LCS) Procedures Least cost selection (LCS) is a method of selecting a consulting firm by first determining if the shortlisted firms are technically qualified and then choosing the firm that bids the lowest price. LCS may be suitable for assignments that:

• are small, with budgets usually $100,000 or less, • are standard or routine; • have well-established practices and standards, • have defined outcomes, • have low risk of failure, and • can be completed for different costs.

Examples of assignments that LCS may be appropriate for include audits, simple surveys, engineering design and supervision of simple construction projects, maintaining equipment, and inspecting routes. Most of the assignments for which LCS is appropriate are under loan/grant projects. Figure 3 provides an outline of the procedures for using LCS. Many are similar to those for using QCBS. The main differences are that:

• the shortlisted consultants submit technical and financial proposals at the same time in separate envelopes,

• the short listed consultants usually submit biodata technical proposals, • the EA evaluates the technical proposal and rejects any that scores less than

750 out of 1,000 (minimum qualifying mark), • the EA publicly opens the financial proposals of the remaining consultants, • COSO or the EA evaluates the financial proposal with the lowest price. If the

proposal omits a minor activity or other item from the consultant’s technical proposal, COSO or the EA may load the price in the proposal to cover the cost of the missing item. If the consultant’s price is no longer the lowest after the financial evaluation, COSO or the EA evaluates the financial proposal that is now the lowest.

• COSO or the EA negotiates a contract with the consultant whose price is lowest after the evaluation. COSO or the EA usually conducts the contract negotiations by email and fax and uses a lump-sum contract because the assignment is well defined.

• Should negotiations fail, COSO or the EA negotiates with the consultant with the next lowest price.

In practice, when ADB or the EA uses LCS, it assumes that all the shortlisted consultants would offer similar services. Therefore, LCS is a method of selecting a standard service for the lowest price. LCS is usually used by EAs for small and standard assignments. The selection process is simplified and shortened because the EA asks for biodata technical proposals, usually only needs to evaluate one financial proposal, usually negotiates a contract by email and fax, and normally does not negotiate the financial terms. Contract administration and project implementation is simplified because the EA usually uses a lump sum contract (sample of lump sum contract is in Annex E).


Executing Agency ADB

Finalizes detailed terms of reference and defines fixed budget Appraisal mission

User division lists project inADB Business Opportunities

User division provides list of firmsfrom the DACON, if required

SUBMISSION 1

SUBMISSION 2

SUBMISSION 3

Negotiates contract

SUBMISSION 4 User divisionapproves draft contract

Finalizes and signs contract with the consultant

Sends copies of signed contract to ADBand the consultant

Sends notice to proceed to consultant

Advises unsuccessful consultants

RECRUITING CONSULTING FIRMS FOR LOANS USING LCS

Advertises in local newspapers, etc.

Prepares long list including firms that expressedinterest and firms in the DACON

Finalizes short list, RFP documents, evaluation criteria and submits to user division

User division reviews and approves and submits to COSO on a no-objection basis

(with maximum contract budget of $100,000)

Sends RFP to short listed consultants User division sends approval to EA

Consultants prepare/submit technical and financial prposals

User division reviews and approves and submits to COSO on a no-objection basis CSC evaluates and ranks technical proposals

User division sends approval to EAAdvises consultants whose proposals did not meet minimum technical requirement

Advises technically qualified consultants of time,date and place for public opening of financial

proposals

Publicly opens financial proposals

Forwards draft negotiated contract and minutes to ADB for approval

Retains copy of contract


Checks financial proposal of the technically qualified firm with the lowest cost; makes

adjustments, if any, and confirms if still the lowest cost and prepares an overall evaluation

report.

Invites consultant and ADB observer, if required, to contract negotiations User division sends approval to EA

Figure 3


D. Consultants’ Qualification Selection (CQS) Procedures

Consultants’ qualifications selection (CQS) is a method for selecting a consulting firm by asking for amplified and detailed expressions of interest (EOIs) and selecting the consultant best qualified for the assignment based on the EOIs received. CQS may be suitable for assignments that:

• are small, generally not exceeding $200,000, and the cost of a full competitive process is not justified;

• are short; • require a “boutique” consulting firm that specializes in one specific area of

expertise, for which only a small number of qualified consultants are available; and/or

• are urgent, and a full competition would take too long. Examples of assignments for which CQS may be appropriate include brief evaluation studies, participation in expert panels to review projects, advisory assignments that are highly specialized and narrow in scope, those that require the best available qualifications, those for national nongovernment organizations, environmental impact assessments, and land acquisition and resettlement studies. Figure 4 outlines the procedures for using CQS for the recruitment of firms. Many are similar to those for using QBS. The main differences are as follows:

• To avoid EOIs being submitted by unqualified firms, the consulting services recruitment notice emphasizes the specialist nature of the assignment and defines the format for EOIs, requiring detailed information on the consultants’ experience and qualifications relevant to the assignment. The recruitment notice may also ask for references.

• The recruitment notice may state the criteria for evaluating the EOIs. Typical weights are - relevant experience: 40% - technical competence: 40% - management competence: 10% - firm’s background: 10%

• ADB or the EA evaluates the EOIs received from a short list of at least three firms and asks the firm with the highest score to submit a biodata technical proposal and a financial proposal.

• If ADB or the EA finds the technical proposal acceptable, it negotiates a contract with the firm. COSO or the EA may negotiate any of the prices in the financial proposal. COSO or the EA uses either a time-based or lump-sum contract depending on the circumstances and the type of work involved.

Using CQS allows ADB or the EA to select a consulting firm quickly, focusing on the technical and financial proposal of the firm that submits the most responsive EOI without the need to evaluate other technical or financial proposals. The selection process is shortened, because ADB or the EA evaluates only one set of proposals, the technical proposal is biodata, and the negotiations are usually by email and facsimile. If ADB or the EA uses a lump-sum contract, administration and project implementation are simplified.


Figure 4

EXECUTING AGENCY ADB

SUBMISSION 1

SUBMISSION 2

Negotiates contract

SUBMISSION 3

Sends notice to proceed to consultant

Advises unsuccessful consultants

Forwards draft negotiated contract and minutes to ADB for approval

Retains copy of contract

Invites consultant and ADB observer, if required, to contract negotiations

Reviews and evaluates technical and financial proposal and sends evaluation report to ADB


Sends approval to EA

User division approves draft contract

Sends copies of signed contract to ADB and the consultant

Finalizes and signs contract with the consultant

RECRUITING CONSULTING FIRMS FOR LOANS USING CQS

Advertises in local newspaper/trade magazines; listing confirms use of CQS and emphasizes the highly specialized nature of

the assignment; listing calls for EOIs and may include indicative EOI evaluation criteria

Evaluates EOIs and prepares evaluation report and submits to user division

Issues RFP for biodata technical proposal and financial proposal for the first-ranked

User division lists project in ADBBO indicating use of CQS and emphasizing the highly

specialized nature of the assignment; listing calls for EOIs and may include indicative EOI

evaluation criteria


Sends approval to EA

(with maximum budget of $200,000)

Prepares a procurement planFact-finding mission assesses EA and helps

prepare a procurement plan


E. Types of Technical Proposals 1. Full Technical Proposals (FTPs) ADB and EAs normally use FTPs as the default types for contract budgets over $1,000,000, or when writing detailed, precise TOR is difficult because the assignment is very complex or the firms may use alternative methodologies to achieve the project’s objectives. Therefore, ADB and EAs often use FTPs when they select consultants using quality-based selection. The short listed consultants are allowed 45 days to prepare FTPs. The information required in FTPs includes the following:

• Details of the consultant’s and any associated consultant’s, or the joint venture’s, background, organization, and recent experience.

• A proposed technical approach and work plan, including comments on the TOR, a general approach to carrying out the services, an organization chart, a time schedule, a bar chart showing when the main activities will be completed, and a staffing schedule showing when the international and national experts will work in the field and at the home office.

• The biodata of each proposed expert, including the expert’s name, nationality, academic background, employment record, and detailed professional experience. The expert must sign and date the biodata when the consultant submits it and certify that the information is correct. All experts must meet ADB’s eligibility requirements, including that they must be nationals of ADB member countries and must be medically fit for their assignments, including necessary travel. Each expert’s biodata is limited to 5 single-sided pages.

• Details of any proposed association arrangements or joint ventures with international or national consulting firms, including identifying any experts in the proposal who are staff members of associated consultants.

• Estimates of the office space, furniture, equipment, vehicles, etc., that the consultant will need to provide the services.

. ADB’s consultant selection committee (CSC) determines the evaluation weights for TAs, and EAs determine the evaluation weights for loans and/or grants. The evaluation weights are set according to the requirements of the project and total 1,000 points. The suggested weights are:

• the firm’s experience 200–400 points • approach and methodology 100–200 points • personnel biodata 500–700 points Total 1,000 points

3. Biodata Technical Proposals (BTPs) ADB and EAs normally use BTPs as the default type for contract budgets of $600,000 or less; as the default type when they select consultants using least cost selection, consultants’


qualifications selection, and single source selection; and when the TOR are well defined and complete, including detailed tasks for each expert. The short listed consultants are allowed 21 days to prepare BTPs. BTPs are shorter than STPs and consist of a graphical work plan, a personnel schedule, and the biodata of each proposed expert. The biodata of each proposed expert is limited to 5 single-sided pages. When a biodata exceeds 5 pages, ADB or the EA reduces the score by 5 points for every page or part of a page in excess of the limit. The evaluation weights are fixed and ADB or the EA cannot change them:

• work plan and personnel schedule 100 points • personnel biodata 900 points Total 1,000 points


EA’s LETTERHEAD

[Name of Consulting Firm] [Address]

This Agreement is made this day of 200 between [name of EA] (the EA) and [Name of Consultant, if individual or Name of Consulting Firm is through a firm]. The EA wishes to engage the Consultant to provide the services for [insert name of Project] The Parties agree to the terms and conditions set out in Appendix 1(A-C): Terms and Conditions, Appendix 2: Terms of Reference, Appendix 3: Remuneration and Out-of-Pocket Expenses.1

The Parties have caused this Agreement to be signed on the date mentioned above:- For and on behalf of the EA For and on behalf of the Consultant

______________________ _________________________ [Name and Designation of Signatory] [Name and Designation of Signatory]

1 The EA is to select the basis upon which the Consultant will be reumerated under the contract namely, [Option A – Standard Cost Plus Fee], [Option B – Full Lump Sum] or [Option C – Partial Lump Sum]}1


Appendix 1-A

TERMS AND CONDITIONS OF CONTRACT [Ref. No#]

DEFINITIONS

D-1. ADB means the Asian Development Bank D-2 Consultancy inputs means the amount of the time when the Consultant’s services are required

during the engagement. One person-month is equivalent to 30 calendar days or 22 working days. Home Office work means Consultant’s work at the Consultant’s own office or residence; Field work means Consultant’s work at an Assignment Location other than the Consultant’s Place of Residence.

D-3. Consultant means the person who will provide the service under the Contract. D-4. Consultant’s Place of Residence is the city or province where the Consultant holds permanent

residence or office. D-5. Contract comprises the Offer Letter, the Specific Conditions, the General Conditions, the Notice

to Proceed (NTP) and all Appendixes to any of these documents. The Contract becomes effective upon receipt of the EA’s NTP. The NTP is issued after the Consultant accepts the offer.

D-6. D for Definitions; S for Specific Conditions and G for General Conditions. D-7. Executing Agency (EA) is the organization or government agency of the Government with which

the Consultant signs the Contract. D-8. Firm means the company or organization through which the Consultant is engaged. The

reference to “Firm” in the General Conditions may be disregarded if the Contract is signed directly between the EA and the Consultant.

D- 9 Loan is the loan financed or co-financed by the ADB for the purposed of financing the Project D-9. Project means [title of Project] which the project under the Loan or Grant for which the Service is

required. D-10. Services means the services the Consultant will perform as specified in the Terms of Reference

(“TOR”) in Appendix 2. D-11. Term of Engagement means the period when the Contract is effective.


Appendix 1-B

TERMS AND CONDITIONS OF CONTRACT [Ref. No#]

SPECIFIC CONDITIONS

S-1. Term of Engagement: The Consultant shall make [herself/himself] available for Services from [commencement date] to [end date]. The commencement date is confirmed in the Notice to Proceed (NTP). Should the NTP indicate a commencement date and completion date different from the above, the NTP shall prevail.

S-2. Consultancy Inputs: As required by Terms of Reference (TOR) in Appendix 2. S-3. Assignment Location: [______________]. S-4. Details on S-1 to S-3 are further specified in the Terms of Reference (TOR) in Appendix 2. S-5. Remuneration: A lump sum of [amount] which includes remuneration and all expenses except

for reimbursable expenses, if any, as indicated in Appendix 3. Payment will be made in accordance with General Conditions Clause 3, 4, 5, and Appendix 3.

S-6. Out-of-Pocket Expenses: [Insert either (i) Option A: Cost Plus Fee, (ii) Option B: Full Lump-

Sum, or (iii) Option C: Partial Lump-Sum]. Details are specified in General Conditions Clause 4 and Appendix 3.

S-7. Contract Amount: [amount]. S-8. Insurance: The Consultant shall be fully and solely responsible for taking out and maintaining

adequate medical insurance and insurance against the Consultant’s accidental death or for any injury incurred during the Term of the Engagement.

S-9. Advances: [amount] to be recovered in 1 installment in accordance with General Conditions

Clause 6. S-10. Executing Agency:

[Name of Executing Agency] [Name and Designation of Contact person] Fax No.:

E-mail: S-11. Consultant's Information:

[name and complete address]: [Nationality]: Fax No.: E-mail:

S-12. Currency of Payment: [Indicate currency of payment]

S-13. Bank Account of the Consultant: [insert Consultant’s bank account details] S-14. Billing Unit: [if required indicate the unit at the EA where the Consultant will submit claims for

payment] S-15 Counterpart facilities [EA should indicate what facilities will be provided by the EA under the

Contract]


Appendix 1-C

TERMS AND CONDITIONS OF CONTRACT[Ref. No#]

GENERAL CONDITIONS

G-1. Performance of the Consultant - During the Term of Engagement when the Consultant’s inputs

are required, the Consultant shall work full time and shall diligently and effectively complete the services under the TOR. The EA reserves its right to evaluate the Consultant’s performance and to maintain a record of the performance evaluation to refer to if the Consultant is considered for re-engagement.

G-2. Contractual Ethics - the EA requires that Consultants and consulting firms under the Loan

observe high ethics (refer to Section 1.05 of the Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers and the ADB’s Policy on Anti-Corruption; a copy may be obtained by visiting www.adb.org). Consultants and consulting firms under ADD financed contracts shall also act in accordance with ADB’s policy on sexual harassment. The Consultant also undertakes that no fees, gratuities, rebates, gifts, commissions or other payments, other than those shown in this Contract have been given or received in connection with the selection of the Consultant or in the Contract’s execution.

G-3. Remuneration

a. the EA shall pay the Consultant’s remuneration either to the Consultant or, if the EA engages the Consultant through a Firm, to the Firm. The EA shall pay remuneration for the period in which the EA requires the Consultant’s full time commitment to provide Consultancy Inputs. The payment is subject to the terms and conditions in Specific Conditions Clause 5, Appendix 3, General Conditions Clause 3, Sections b, c, d, and General Conditions Clause 5.

b. If Specific Conditions Clause 5 indicates a lump sum payment for the Services, the

Consultant’s remuneration and OPE, except for any reimbursable expenses specified in Appendix 3, will be paid in lump sum in accordance with a payment schedule shown in Appendix 3.

c. If Specific Conditions Clause 5 does not indicate a lump sum and if the Consultancy

Inputs are less than 30 calendar days or 22 working days, the EA shall pay the remuneration in the following way:

i. By calendar days for the time the Consultant spends on the services in the field,

that is, at a location other than the Consultant’s place of residence. The field time includes the time required to travel to and from the assignment location via the most direct route, the EA official holidays, and weekends except the weekend that falls at the end of the assignment, and/or,

ii. By working days for the days that the Consultant works full-time to provide the

services at his or her home office, that is, the Consultant’s place of residence.

iii. The maximum number of paid working days in a calendar month is 22 for purposes of this Contract.

d. If Specific Conditions Clause 5 does not indicate a lump sum and if the Consultancy

Inputs are 30 calendar days or more, the EA pays remuneration as follows.


i. By person-months, including the time required to travel to and from the assignment location via the most direct-route, the EA official holidays, and weekends except the weekend that falls at the end of the assignment.

ii. the EA calculates daily remuneration rates by dividing the monthly rate by 30 for

a calendar day and by 22 for a working day.

e. the EA shall determine the amount it offers for each assignment. If the EA re-engages the Consultant for a new assignment in the future, the remuneration it offers might be different from the rate for this assignment, which is indicated in Specific Conditions Clause 5.

G-4. Out-of-Pocket Expenses (OPE) and Reimbursable Expenses

a. If Specific Conditions Clause 5 does not indicate a lump sum for Remuneration and OPE, the EA will pay OPE to the Consultant, or the Firm if the Consultant is engaged through a firm, for actual costs substantiated by receipts of purchase or other supporting documents as specified in Appendix 3, unless otherwise specified. Details of the OPE are shown in Appendix 3 which may include the following:

i. Per Diem Allowance is a daily allowance for accommodation and subsistence

when the Consultant stays overnight at a place other than the Consultant’s Place of Residence to perform the Services during the Term of Engagement.

ii. Travel Cost covers all transportation costs the Consultant reasonably incurs in

travelling for the Services including the cost of transportation by appropriate public transport between the Consultant’s Place of Residence and the nearest convenient international airport. Air travel should be economy class and by the most direct route with connecting flights. Extra costs for non-work related stop-over en-route exceeding the allowable travel time or for non-direct route flights shall be at the Consultant’s own expense.

b. If Specific Conditions Clause 5 indicates a lump sum for Remuneration and OPE

without reimbursable expenses, the EA will make payments following the payment schedule in Appendix 3 and in accordance with General Conditions Clause 5.

c. If Specific Conditions Clause 5 indicates a lump sum for Remuneration and OPE

with reimbursable expenses, the EA will make payments following the payment schedule in Appendix 3 and in accordance with General Conditions Clause 5 and reimburse either the Consultant or the Firm the actual cost of the reimbursable expenses.

G-5. Payment

a. The EA shall make payment in accordance with Specific Conditions Clause 5, General Conditions Clause 3, and General Conditions Clause 6 when applicable, within a reasonable period, normally (depending on General Conditions Clause 5-c) not more than 30 days, unless otherwise specified in Appendix 3, from the EA’s receipt of the invoice from the Consultant, or the Firm if the Consultant is engaged through a firm.

b. Unless otherwise specified in Appendix 3, the invoice shall be submitted to the EA each

month with a statement showing the time the Consultant spent during that period performing the Services and with the supporting documents for the reimbursable expenses as required in Appendix 3.


c. Payment follows the EA certifying that Services are satisfactory.

d. The EA payments shall be made to the bank account as specified in Specific Conditions Clause 13.

e. The EA discourages frequent change of Firm/Consultant’s bank account and requires an

official request with justifications for such a change. In the case of Firm, the letter must be signed by the same person who signed this Contract on behalf of the firm or an authorized representative of the Firm. The EA does not accept a third party’s bank account other than the contracting party’s account.

f. The Consultant, or the Firm if the Consultant is engaged through a firm, shall submit the

final invoice within 60 calendar days after the completion of the Term of Engagement or termination of the Contract. If no final invoice is received by the EA within 60 calendar days after the completion of the Term of Engagement or termination of the Contract, the EA shall make the final payment based on the Contract’s account record certified by the EA after the settlement of any pending matters, such as outstanding advance payment, Contract variations or handover of equipment by the Consultant to the EA if any equipment is purchased by the Consultant using the EA funds. The EA will then close the Contract account after the final payment. All payment claims to the EA, if any, from the Consultant or the Firm, shall be considered as irrevocably waived after the closure of the Contract account.

g. Total payment under this Contract shall not exceed the maximum amount indicated in

Specific Conditions Clause 7 unless the EA issues a Contract variation order to amend the maximum amount.

h. Except for the monthly and final invoice which shall be submitted by the Consultant to the

EA, all requests for advances, queries and follow-ups regarding status of payments should be sent to the [name of EA Billing Unit].

G-6. Advances - The Consultant, and the Firm if the Consultant is engaged through a firm, may

request an advance on OPE up to the amount as indicated in Specific Conditions (Specific Conditions Clause 10). The advance will be recovered in the number of installments specified in Specific Conditions Clause 10 starting from the first billing. The EA must approve additional advance(s) and recovery is adjusted.

G-7. Insurance

a. Refer to Specific Conditions Clause 8. b. Where the EA engages the Consultant through a firm, the EA shall undertake no

responsibility for life, accident, travel, or any other insurance coverage for the employees or sub-contractors of the Consultant or for the dependents of any such persons who may travel to the duty station or elsewhere for the purposes of the Services. The Firm shall i. take out and maintain adequate insurance against loss of or damage to

equipment the Firm or Consultant purchases in whole or in part with funds provided by the EA, if any. The proceeds of such insurance shall be payable in a currency freely usable to replace or repair such equipment.

ii. take out and maintain adequate professional indemnity insurance and insurance

against claims by third parties resulting from acts performed in carrying out the Services.

iii. take out any other necessary insurance coverage for the Consultant.


G-8. Language - All reports, unless otherwise specified in the TOR, and all communication related to

the execution of this Contract shall be in English language. G-9. Reports - The Consultant shall submit to the EA reports and/or other written and electronic

documents as required in the TOR. A 500-word (maximum) knowledge summary will be included in the front section of the final report to be delivered on a CD. All reports, notes drawings, specifications, statistics, plans and other documents and data compiled or made by the Consultant or the Expert while performing the Services shall be the sole and exclusive property of the EA. Upon Contract termination or conclusion, the EA has the right to direct the disposal of such property which may be made available to the general public in the EA’s sole discretion. The Consultant may retain copies of such documents and data but shall not use the same for purposes unrelated to the Services without the prior approval of the EA. After concluding the Term of Engagement, the Consultant shall continue to cooperate with the EA to clarify or explain any contents in the reports the Consultant submits. It is understood that the Consultant shall use his/her own computer or laptop to complete the Reports.

G-10. Intellectual Property - The Consultant, and the Firm if the Consultant is engaged through a firm,

shall ensure that all its Services and all goods and services (including without limitation all computer hardware, software, and systems) procured by the Consultant from the EA funds or used by the Consultant in the carrying out of the Services do not violate or infringe on any industrial property or intellectual property right or any third party claim. The Consultant, and the Firm if the Consultant is engaged through a firm, shall indemnify the EA from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, suits, proceedings, demands, costs, expenses, and disbursements that may be imposed on, incurred by, or asserted against the EA for actions related to performing the Services. These include the Consultant’s or Firm’s infringing or allegedly infringing copyright, trademark, patent, or other protected right.

G-11. Public Statement and Commitment - The Consultant, and the Firm if the Consultant is engaged

through a firm, shall act discretely and refrain from making public statements about the Services or any the EA projects without the EA’s prior written approval. The Consultant, and the Firm if the Consultant is engaged through a firm, has no authority to commit the EA in any capacity and shall make this clear as circumstances warrant. The Consultant should refrain from any political activity involving the assignment or in the country where the project takes place during the Term of Engagement.

G-12. Disclosure of Information - The Consultant, and the Firm if the Consultant is engaged through a

firm, shall comply with the ADB Policy on Confidentiality and Disclosure of Information (a copy may be obtained by visiting www.adb.org).

G-13. Equipment - It is agreed that the Consultant, unless otherwise approved by the EA, shall use,

when necessary, his/her own computing tools, laptop or notebook for performing the Services. In special cases, the EA may provide funds under the Contract for the Firm/Consultant to purchase equipment for use by the Consultant during the Term of Engagement. Such equipment shall remain as the EA’s property and should be handed over to the EA, unless otherwise instructed by the EA, upon the termination of the Contract.

http://www.adb.org/


G-14. Exemptions and Immunities - the EA may arrange privileges, exemptions, or immunities with the Government for the Assignment Location to be extended to the Consultant for the Services. the EA intends that the Consultant receive in the EA’s member countries the privileges, immunities, and exemptions accorded to Consultants performing a Mission for the EA under Chapter VIII of the EA’s Articles of Agreement. These include exemptions from taxes on all the EA’s payments to the Consultant or the Firm for the Services, except taxes levied by the Country in which the Consultant holds a citizenship or right of residency.

G-15. Relationship of the Parties - Nothing contained in this Contract shall be construed as

establishing any relationship other than that of independent contractor between the EA and the Consultant, or the Firm if the Consultant is engaged through a firm.

G-16. Subcontracting - The Consultant, and the Firm if the Consultant is engaged through a firm, shall

not assign or sub-let the Contract or any part of it without the prior written consent of the EA for an approved sub-contract.

G-17. Disability or Incompetence of the Consultant - The EA’s engagement of the Consultant is

conditional upon the Consultant’s or the Firm’s confirmation to the EA that the Consultant is healthy and without physical or mental disability that may interfere with performing the Services. The Consultant shall, if called upon to do so, give the EA any medical or other evidence as the EA may reasonably require. If at any time in the EA’s opinion, whether for reasons of health or otherwise, the Consultant is unable to perform or to complete the Services adequately, the EA may terminate this Contract.

G-18. Unusual Incidence - The Consultant shall report immediately to the EA any accident involving

personal injury or property damage during the Term of Engagement. The Consultant shall also report to the EA immediately any circumstances which might hinder or prejudice performance of the Services.

G-19. Visas - The Consultant shall obtain visa and other approvals from governmental authorities

required under applicable laws and regulations of the Assignment Location to permit the Consultant to carry out the Services and, if applicable, shall obtain visas and other required approvals from the relevant governmental authorities for any dependents of such Consultant physically present in the Assignment Location during the Term of Engagement.

G-20. Suspension; Termination of Contract

a. The EA may suspend performance of the whole or part of the Contract, or the disbursement of funds hereunder, for a period as the EA deems necessary if the EA determines that a condition has arisen which, in the reasonable opinion of the EA, interferes, or threatens to interfere, with the effective carrying out of the assignment or accomplishing the Services for a specified period of time not to exceed thirty (30) working days; Notwithstanding the above, this Contract may be terminated by the EA:

i. upon the expiration of a period of time of not less than 15 (fifteen) calendar days

after written notice of its intention to terminate has been given to the Consultant; or

ii. immediately if the EA determines that the Consultant, and the Firm if the

Consultant is engaged through a firm, has engaged in unethical behaviour, or corrupt or fraudulent practices- as defined by the ADB in the ADB’s Anticorruption Policy and in Section 1.05 of the Guidelines on the Use of Consultants by the Asian Development Bank and its Borrowers.

iii. immediately if the EA determines that the Services to date are so deficient as to

demonstrate that the Services cannot be satisfactorily performed.


b. The Consultant, or the Firm if the Consultant is engaged through a firm, may terminate

the Contract if there are circumstances beyond the Consultant’s reasonable control which make it impossible to carry out the Services. The Consultant must substantiate such reasons in writing. Upon the EA’s confirmation in writing, or the failure of the EA to respond to such submission of justification within fifteen (15) days from receipt, the Consultant shall be relieved from performing the Services and this Contract shall be terminated.

c. Termination Procedure - Upon termination of the Contract or the EA giving such notice,

the Consultant, and the Firm if the Consultant is engaged through a firm, shall immediately bring the Services to an orderly close and reduce expenditures to a minimum. Unless the Consultant’s default causes termination, the Consultant, or the Firm if the Consultant is engaged through a firm, is entitled to full reimbursement for costs duly and reasonably incurred prior to the termination date. Reasonable costs for the orderly termination of Services, including return travel by the Consultant, are reimbursable. If termination is occasioned by the Consultant’s or the Firms’ default, the Consultant, or the Firm if the Consultant is engaged through a firm, or the EA as the case may be, shall be entitled to the difference between:

i. the costs, direct or indirect, the Consultant or the Firm incurs in the performance

of the Services up to the date of termination; and ii. the aggregate of all sums the EA paid to the Consultant or the Firm under the

Contract.

G-21. Entire Agreement and Contract Amendment - The Contract as amended from time to time under the foregoing provisions supersedes all prior arrangements whether written or oral, expressed or implied. The amendment, whether partly or wholly, of any of the Contract’s terms or conditions shall be valid only if in writing and signed by the authorised party of the EA.

G-22. Notices and Requests - Any notice or request required or permitted under this Contract shall be

in writing. Such notice or request shall be deemed to be fully given or made when it is delivered by hand, mail, or fax to the authorised party. The authorized party under this Contract for the EA is described in Specific Conditions Clause 10 and the authorized party for the Consultant is the person who confirms the acceptance of the Offer Letter and is described in Specific Conditions Clause 11 unless otherwise notified by the Consultant, or the Firm if the Consultant is engaged through a firm.

G-23. Delays - No failure or delay on the part of the EA in exercising any power or right under this

Contract shall operate as a waiver of that power or right, nor shall any single or partial exercise of such power or right preclude any other or further exercise or any other power or right under this Contract.

G-24. Inspection and Audit - The Consultant, and the Firm where the Consultant is engaged through a

firm, agree to allow the EA or a representative authorized by the EA to inspect and audit any accounts, documents, and records relating to this Contract.

G-25. Settlement of Disputes

a. The Consultant, or the Firm where the Consultant is engaged through a firm, and the EA agree that avoidance or early resolution of disputes is crucial for smoothly executing this Contract and completing the assignment. Each party should settle amicably all disputes arising out of or connected with this Contract or its interpretation through the following procedure: each party’s authorized representative will examine the matter(s) in dispute


and consider available options to resolve such dispute. The parties will seek agreement on the most reasonable option to resolve the dispute and act appropriately to that end.

b. Any dispute or difference arising out of this Contract or in connection with it which cannot

be amicably settled between the parties under (a) above shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed under the said Rules. The arbitration shall take place in Manila, Philippines. The resulting award shall be final and binding on the parties and shall replace other remedies. The language of arbitration shall be English and each party shall bear its own costs.


Appendix 2

TERMS OF REFERENCE Contract Project [country: title] Expertise Source [International or National] Category [Independent or Firm] Objective/Purpose of the Assignment: Scope of Work: Detailed Tasks: Output/Reporting Requirements: Places of Assignment: Days Estimated Dates (dd/mm/yyyy)

TOTAL DAYS (state if Intermittent)

NOTE: Actual schedule to be confirmed with User Unit.


Appendix 3 [(OPTION A – STANDARD COST PLUS FEE)]

REMUNERATION AND OUT-OF-POCKET EXPENSES Contract Project [country: title] Expertise Source [International or National] Category [Independent or through a Firm] Prof. Group Job Level

Code Description Qty. Unit Amount Total

1. REMUNERATION Field Home Office Sub-Total

2. OUT-OF-POCKET EXPENSES 3. Per Diem 4. Air Travel 5. Misc. Travel Expense (Lump sum) Land Transport, Vehicle Hire (Local Transport)

6. Communications and Reports Sub-Total

7. CONTINGENCY TOTAL MAXIMUM PAYMENT

Important Note:

1. Remuneration is paid based on the certification by the EA on the actual inputs. 2. Out-of- Pocket Expenses are reimbursable at cost with supporting documents/receipts unless otherwise apecified. 3. Negotiated rate(s) are fixed, no receipt is required for the duration of the contract. No per diem is paid on the day of the

Consultant’s arrival in his usual place of residence/home office. Actual location/number of days in each location may vary based on actual requirements, subject to certification by the EA.

4. Submission of original copies of used tickets, or receipts of purchase and/or boarding pass(es) as evidence of travel and class of travel is required. Actual travel itinerary via most direct route will have to be determined in coordination with the EA.

5. To cover passport and visa fee, in and out expenses, medical costs and other expenses incidental to travel. 6. Communication expenses including subscription and operational expenses of mobile phone, IDD, phone, fax, internet,

courier, etc. 7. Use of contingency requires prior approval of the EA.


[(OPTION B –FULL-LUMP SUM)]

REMUNERATION AND OUT-OF-POCKET EXPENSES Contract Project [country: title] Expertise Source [International or National] Category [Independent or through a Firm] Prof. Group Job Level

LUMP SUM PAYMENT

Payment Milestones2

1st

2nd

3rd

4th

5th

6th

7th

TOTAL CONTRACT AMOUNT

Important Note:

2 The first payment milestone may be an advance payment. Future payment milestones are generally linked to

deliverables completed by the consultant.


[(OPTION C – PARTIAL LUMP SUM)]

REMUNERATION AND OUT-OF-POCKET EXPENSES Contract Project [country: title] Expertise Source [International or National] Category [Independent or through a Firm] Prof. Group Job Level Code Description Qty. Unit Amount Total

LUMP SUM PAYMENT

Payment Milestones3

1st

2nd

3rd

4th

5th

6th

7th

Progress Payment Sub-Total

REIMBURSABLE EXPENSES Per diem Airtravel Misc. Travel Expenses (Lump sum) Communications

Sub-Total CONTINGENCY

TOTAL CONTRACT AMOUNT Important Notes:

1. Remuneration is paid based on the certification by the EA on the actual inputs. 2. Out-of- Pocket Expenses are reimbursable at cost with supporting documents/receipts unless otherwise specified. 3. Negotiated rate(s) are fixed, no receipt is required for the duration of the contract. No per diem is paid on the day of the

Consultant’s arrival in his usual place of residence/home office. Actual location/number of days in each location may vary based on actual requirements, subject to certification by the EA.

4. Submission of original copies of used tickets, or receipts of purchase and/or boarding pass(es) as evidence of travel and class of travel is required. Actual travel itinerary via most direct route will have to be determined in coordination with the EA.

5. To cover passport and visa fee, in and out expenses, medical costs and other expenses incidental to travel. 6. Communication expenses including subscription and operational expenses of mobile phone, IDD, phone, fax, internet,

courier, etc. 7. Use of contingency requires prior approval of the EA.

3 The first payment milestone may be an advance payment. Future payment milestones are generally linked to

deliverables completed by the consultant.

Appendix 6, Annex E 1

S T A N D A R D F O R M O F C O N T R A C T

( L o a n s )

Consultant’s Services Small Assignments/Lump-Sum


CONTRACT FOR CONSULTANTS’ SERVICES

Small Assignments/Lump-Sum

between

[name of the Client]

and

[name of the Consultant]

Dated:


LUMP-SUM CONTRACT FOR SMALL ASSIGNMENTS1

[(OPTION A)2

This CONTRACT, including Appendices A-C, (the “Contract”) is made on the [day] day of [month] [year], between the [Borrower/EA] (the “Client”) and [name of consulting firm, country] (the Consultant). The Consultant has associated with [names of associated firms, country]. Notwithstanding the association, the Consultant shall retain full and undivided responsibility for the performance of obligations and for the satisfactory completion of the services to be performed under the Contract.

(OPTION B)3

This CONTRACT, including Appendices A-C, (the “Contract”) is made on the [day] day of [month] [year], between the [Borrower/EA] (the “Client”) and a joint venture consisting of the following entities, each of which will be jointly and severally liable to the Client for all of the obligations of the consultant under this Contract, namely, [name of consulting firm, country],4 [name of consulting firm, country], [name of consulting firm, country] (collectively called the “Consultant”). WHEREAS by an Agreement dated [date month year] (the “Loan Agreement”) between the Client and the Asian Development Bank (the “ADB”), ADB has agreed to make a loan to the government of [country] for the purposes of financing [name of project] (the “Project”). WHEREAS the Client has requested the Consultant to carry out the services as defined below on the terms and conditions detailed herein which the Consultant has agreed to do; NOW THEREFORE the parties hereto agree as follows: Clause 1. Description of Services. The Consultant shall perform the services (the “Services”) described in Appendix A: Terms of Reference (TOR). Any modifications to the TOR that materially impact upon the Services which may be agreed between the Consultant and the Client, and any sub-contract to carry out some portion of the Services approved by the Client under Clause 10, shall be implemented only with the prior concurrence of ADB. Clause 2. Personnel. The Consultant shall provide the personnel listed in Appendix B to perform the Services. The Consultant shall, at all times, provide a Consultant's Coordinator (“Coordinator”) acceptable to the Client to supervise and coordinate the operations of the staff working under this assignment and who is responsible for liaison between the Consultant and the Client:

1 This small assignment contract should be used for smaller contracts with firms, training institutes or NGOs with a

contract value US$200,000 or less US$ equivalent for lump-sum payment. 2 Use Option A if the Consultant is a lead firm which is associated with other firms as sub-consultants. 3 Use Option B if the Consultant is a Joint Venture, i.e. a Consultant consists of more than one entity, all of which are

liable under the Contract. 4 Name of each joint venture partner.


(i) Should it become necessary for the Consultant to replace any of the personnel specified by name in the Personnel Schedule, the Consultant shall provide a replacement acceptable to the Client with comparable or better qualifications. In the event that the person replaced is, at the time of replacement, in the field, the Consultant shall bear the travel and other related costs arising out of or incidental to the replacement.

(ii) In the event that any of the personnel is found by the Client to be

incompetent, involved in misconduct or incapable of discharging the assigned responsibilities, the Client may request the Consultant, at the expense of the Consultant, to provide a replacement with suitable qualifications and experience acceptable to the Client.

Clause 3. Work Product.5 The Consultant shall submit to the Client in the English language the reports specified below: (i) An Inception Report: __ copies to Client [and __ copies to ADB]∗ to be

submitted within _____ (_) weeks after the commencement of the Services. (ii) An Interim Report: __ copies to Client [and __ copies to ADB]∗ to be

submitted within _____ (_) weeks after the commencement of the Services. (iii) A Draft Final Report: __ copies to Client [and __ copies to ADB]∗ to be

submitted within _____ (_) weeks after the commencement of the Services. (iv) A Final Report: __ copies to Client [and __ copies to ADB]∗ and for [ADB

and] the Government, a CD containing the Final Report. These will be submitted within _____ (_) weeks after the receipt of the comments from the Government on the Draft Final Report. The Final Report shall take into consideration the comments of the Government. [A 500-word (maximum) knowledge summary will be included in the front section of the final report to be delivered on a CD.]

Clause 4. Commencement Date. The Consultant shall commence the

Services after receipt of the Notice to Proceed but no later than [start date] and shall complete the Services by [completion date].

Clause 5. Performance of the Services. The Consultant shall carry out the Services with due diligence and efficiency and shall furnish to the Client such information related to the Services as the Client may from time to time reasonably request.

Clause 6. Maximum Contract Amount. The Client shall pay the

Consultant for the Services a maximum amount of [amount in words and figures] including all tax and other costs incurred in connection with the Services. Clause 7. Payment to the Consultant. The Client shall pay the Consultant for the Services on the basis of claims submitted by the Consultant to the Client in

5 There may be other types of work product e.g., training manuals, training packages, workshops etc. This clause

should be modified to reflect this. ∗ As negotiated subject to project needs.


accordance with the Payment Schedule specified in Appendix C provided that the quality of the outputs(s)/deliverable(s) to which the claim relates is satisfactory to the Client. A payment does not constitute acceptance of the Services nor relieve the Consultant of any obligations.

Clause 8. Accounts for Payment. All payments under this Contract shall be made to the following account of the Consultant:

Bank Name: Bank Address: Account Name: Account No.: Swiftcode: ABA No.:

Clause 9. Contractual Ethics. No fees, gratuities, rebates, gifts, commissions or other payments, other than those shown in the proposal, have been given, received, or promised in connection with the consultant selection process or in contract execution. At all times the Consultant shall be in compliance with the ADB's Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers(Guidelines) and the ADB's Anticorruption Policy.

Clause 10. Sub-Contracting. The Consultant may subcontract work relating to the Services to an extent and with such specialists and entities as may be approved in advance by the Client (and with the prior written concurrence of ADB), and shall submit to the Client for prior approval the text of any proposed subcontract and any amendments which may subsequently be proposed. The Consultant shall retain full responsibility for the Services and for the content of all Reports and other deliverables required. In the event that any sub-contractor is found by the Client to be incompetent or incapable in discharging assigned duties, the Client may request the Consultant to provide a replacement, with qualifications and experience acceptable to the Client.

Clause 11. Impossibility of Performance. (a) The Consultant

shall promptly notify the Client in writing of any situation or of the occurrence of any event beyond the control of the Consultant, including that of “force majeure,”6 which makes it impossible or impracticable for the Consultant to carry out its obligations.

Clause 12. Ownership of Reports and Work Product. All reports or

work product, in any form, prepared by the Consultant in performing the Services shall be the sole and exclusive property of the Client, and may be made available to the general public at the Client’s sole discretion. The Consultant may take copies of such documents and data for uses related to the Services under conditions acceptable to the Client, but shall not use the same for any purpose unrelated to the Services without the prior written approval of the Client.

6 “Force majeure” shall mean events beyond the control of either party, which prevent the affected party from

performing and fulfilling its obligations under the Contract, and could not have been reasonably anticipated or foreseen, or although foreseen were inevitable, such as acts of war, whether or not war be declared, public disorders, insurrection, riots, sabotage, explosions, violent demonstrations, blockades and other civil disturbances, epidemics, nuclear contamination, landslides, earthquakes, typhoons, volcanic eruption floods, washouts and other natural calamities and acts of God, strikes, lock-outs or other industrial action or equivalent disruption or disturbances, boycotts and embargo or the effects thereof, and any other similar events.


Clause 13. Suspension. The Client may, by notice to the Consultant, suspend in whole or in part, the disbursement of funds if the Consultant shall have failed to carry out any of its obligations under this Contract, or any condition has arisen which, in the reasonable opinion of the Client, interferes, or threatens to interfere, with the successful carrying out of the Services or the accomplishment of the purposes of this Contract.

Clause 14. Termination. (a) The Client may terminate this Contract by notice to the Consultant 14 calendar days after the Client has given notice to the Consultant of suspension of payments under Clause 13 of this Contract. Upon the receipt or giving of any notice referred to in Clause 13, if the Consultant is not in default under this Contract and has partly or substantially performed its obligations under this Contract up to the date of termination, and has taken immediate steps to bring the Services to a close in a prompt and orderly manner, there shall be an equitable reduction in the maximum amount payable under the Contract to reflect the reduction in the Services provided.

(b) The Client may at any time, at the option and within the discretion of the

Client, terminate this Contract upon not less than 30 calendar days’ notice of its intention to terminate.

(c) The Client may terminate this Contract, effective immediately, in the

following events: (i) if the Loan Agreement has been terminated, or (ii) if the Client and/or ADB determines that the Consultant has engaged in

corrupt, fraudulent, collusive or coercive practices, as defined in ADB’s Guidelines or there is a conflict of interest.

(d) The Consultant may, by notice to the Client, terminate this Contract, if

payments are not received within 60 calendar days after the due date in Appendix C: Payment Schedule, and such default has not been remedied within 30 calendar days after notice has been given by the Consultant. Furthermore, the Consultant may terminate this Contract with 30 calendar days notice to the Client in the event that any condition has arisen which, in the reasonable opinion of the Consultant, seriously interferes with, or threatens to seriously interfere with, the successful carrying out of the Services intended in this Contract.

Clause 15. Indemnity and Insurance. (a) The Consultant shall be responsible for, and shall indemnify the Client, in respect of loss and damage to equipment/materials furnished by the Client, or purchased by the Consultant in whole or in part with funds provided by the Client. At the Client’s request, the Consultant shall take out and maintain adequate insurance against loss of or damage to such equipment and materials. The proceeds of such insurance shall be payable in currency freely usable to replace or repair such equipment and materials.

(b) The Client assumes no responsibility for life, accident, travel or any other insurance coverage for the Consultant or Personnel to work under this Contract. Clause 16. Accounts and Records (a) The Consultant shall keep accurate and systematic accounts and records of the Services in such form and detail as are customary in its profession and are sufficient to establish accurately that remuneration and out-of-pocket expenses claimed by the Consultant have been incurred for providing the


Services. The Consultant shall maintain accounts and records for the period of the Services and for a period no less than 5 years after completion of the Services.

(b) The Consultant shall permit authorized representatives of the Client, including auditors selected the Client (and, if so required, authorized representatives of, or auditors selected by, ADB), to inspect and make an audit of all such documents, accounts and records in connection with payments made in accordance with this Contract, and make copies of the documents, accounts and records if so requested by the Client. The Consultant shall cooperate with and assist the Client and/or ADB and its authorized representatives in making such audit. In the event the audit discloses that the Consultant has overcharged the Client, the Consultant shall immediately reimburse the Client an amount equivalent to the amount overpaid. If overpayment is a result of the Consultant having been engaged in what the Client (or, as the case may be, ADB) determines to constitute corrupt, fraudulent, collusive or coercive practices, as defined in ADB’s Guidelines, the Client shall, unless the Client decides otherwise, terminate the Contract. Clause 17. Intellectual Property Rights. (a) The Consultant shall indemnify the Client from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, proceedings, demands, costs, expenses and disbursements of whatsoever nature that may be imposed on, incurred by or asserted against, the Client during or in connection with the Services by reason of: (i) infringement or alleged infringement by the Consultant of any patent or other protected right, or (ii) plagiarism or alleged plagiarism by the Consultant.

(b) The Consultant shall ensure that all goods and services (including without limitation all computer hardware, software and systems) procured by the Consultant from the Client funds or used by the Consultant in the carrying out of the Services do not violate or infringe any industrial property or intellectual property right or claim of any third party. Clause 18. Relationship of Parties. (a) Nothing contained in this Contract shall be construed as establishing or creating between the Client and the Consultant a relationship of master and servant or principal and agent.

(b) The Consultant shall during the performance of the Services be an independent contractor retaining complete control over its personnel, conforming to all statutory requirements with respect to all its employees, and providing all appropriate employee benefits. Clause 19. Authorized Representative of Consultant. Any action required or permitted to be taken, and any documents required or permitted to be executed under this Contract, may be taken or executed on behalf of the Consultant by the Coordinator or a designated representative. Clause 20. Authorized Representative of Client. All orders, notices, directions, instructions and other communications relating to the Services, including in relation to the employment, termination, discharge, compensation or expenses of the Consultant, shall be given on behalf of the Client to the Consultant by ___________________________________.

Clause 21. Settlement of Disputes. Any dispute or difference arising out of this Contract or in connection therewith which cannot be amicably settled between the parties shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.


The arbitration shall take place in ________________________ and the applicable law shall be that of [country]. The resulting award shall be final and binding on the parties and shall be in lieu of any other remedy.

Clause 22 Variations. The Contract may be varied by agreement

between the parties. All such variations shall be in writing signed by the authorized representative of the parties.

Clause 23. Notices and Requests. A notice or request required or permitted to be given or made under this Contract shall be in writing and in the English language. A notice or request shall be deemed to be given or made when it shall have been delivered by hand, mail, or facsimile to the party to which it is required to be given or made at the party's address specified in writing to the party giving such notice or making such request. For the Client : Attention: [Name] [Designation] Address : Telephone Nos. : Facsimile Nos. : E-mail address : For the Consultant : Attention: [Name] [Designation]

Address : Telephone No. : Facsimile No. : E-mail Address :

[Clause 24. Warranty as to Eligibility. The Consultant represents and warrants that it (and, if applicable, every joint venture partner) is legally established in _______________________ [and __________________] and that the Services will be wholly and substantially supplied from [that country] [those countries] or from other member countries of ADB. The Consultant further confirms that any associates, sub-consultants, specialists and entities to which the Consultant assigns and/or subcontracts work relating to the Services shall be citizens of, or legally established in ____________________ or from other member countries of the ADB.]7

Clause 25. Notice of Delay. In the event that the Consultant

encounters delay in obtaining required services or facilities from the Client for the conduct of the 7 Include if an international consultant is a signatory to the Contract


Services, the Consultant shall promptly notify the Client of such delay, and may request an appropriate extension of time for completion of the Services.

[Clause 26. Exemptions and Assistance Provided by the Client. The

Client has agreed to provide exemptions and special assistance to the Consultant as detailed in Appendix D in carrying out the Services.]8

IN WITNESS, the parties have signed this Contract on [day month year] in [city, country]. FOR AND ON BEHALF OF (THE CLIENT) ________________________________ Authorized Representative FOR AND ON BEHALF OF

(THE CONSULTANT) ________________________________ Authorized Representative ________________________________ Authorized Representative ________________________________ Authorized Representative etc. List of Appendices A Scope of Services/Terms of Reference B Personnel Schedule C Schedule of Payments D [Exemption and Assistance to be Provided by the Client] 8

8 Add, as applicable, if international consultants are engaged.


APPENDIX A

TERMS OF REFERENCE

APPENDIX B

Personnel Schedule

NAME POSITION

International

National

12 Appendix 6, Annex E

APPENDIX C PAYMENT SCHEDULE

Payment Milestones

Amount (US$)

Payment No. 1

[at mobilization]

Payment No. 2

Payment No. 3

Payment No. 41

TOTAL MAXIMUM CONTRACT AMOUNT

1 Final payment pursuant to the Payment Schedule shall be made by the Client after the final deliverable has been

approved by the Client.


APPENDIX D

Exemptions and Assistance to be Provided by the Client

I. Counterpart Support: [provide details, if applicable] II. Exemptions and Assistance provided by the Client2

The Client warrants that the Government shall: [(a) exempt the Consultant and the personnel from (or the Client shall bear the cost of) any taxes,3 duties, fees, levies and other impositions imposed under the laws and regulations in effect in __________________ on the Consultant and the personnel in respect of:

(i) any payments made to the Consultant or the personnel other than ______________ nationals, in connection with the carrying out of the Services;

(ii) any equipment, materials and supplies brought into _________for the

purpose of carrying out the Services and which, after having been brought into such territories, will be subsequently withdrawn therefrom;

(iii) any equipment import for the purpose of carrying out the Services and

paid for out of funds provided by the Client and which is treated as property of the Client;

(iv) any property brought into ________________ by the Consultant, the

personnel, or the eligible dependents of the personnel for their personal use or consumption and which will be consumed in _________________ or will subsequently be withdrawn therefrom upon the departure of the Consultant and the personnel from __________________.

Provided that:

(a) the Consultant and the personnel and their eligible dependents shall follow the usual customs procedures of the Government in importing property into _____________; and

(b) if the Consultant or any of the personnel or his eligible dependents

do not withdraw, but dispose of any property in ______________ upon which customs, duties and taxes have been exempted, the Consultant shall bear such customs, duties and taxes in conformity with the regulations of the Government.]

2 To be added when international consultants are engaged. 3 In certain countries, the Consultant may be subject to withholding or other taxes as notified by the Client to the

Consultant in the Data Sheet portion of the RFP. In such cases, this sub-section will need to be modified accordingly.

14 Appendix 6, Annex E

(b) provide Consultant and each of the personnel with work permits and such other documents as shall be necessary to enable them to perform the Services; (c) arrange for the personnel and, if appropriate, their eligible dependents to be provided promptly with all necessary entry and exit visas, residence permits, exchange permits and travel documents required for their stay in ___________________; (d) facilitate clearance through customs of any property required for the Services and of the personal effects of the personnel and their eligible dependents; (e) issue to officials, agents and representatives of the Government all such instructions as may be necessary or appropriate for the prompt and effective implementation of the Services; (f) exempt the Consultant and the personnel and any sub-contractors employed by the Consultant for the Services from any requirement to register or obtain any permit to practice the profession of (engineer or architect) or _______________, or to establish either individually or as a corporate entity according to the laws of ______________________.

Appendix 6 1

DETAILED TERMS OF REFERENCE OF CONSULTING SERVICES A. Rationale 1. Substantial support is required to help the Ministry of Agriculture and Cooperatives as Executing Agency (EA), specifically the Department of Agriculture (DOA) as Implementing Agency (IA), to implement the Commercial Agriculture Development Project (CADP). Increased emphasis is being given to the promotion of community services and social orientation of the poor and disadvantaged communities to help them take advantage of what CADP has to offer. The development of market-focused practices, production/market linkages and to reorient services towards the private sector are emphasized. Consulting Services are only proposed where executing agency resources are limited, and supplementation is necessary. 2. The critical areas where MOAC has insufficient capacity are in product processing and marketing, market infrastructure development, agribusiness and market chain development, establishment of an input-output based monitoring system at community, district/local authority level, management of project training through service providers, and mainstreaming gender and disadvantaged people into community development processes. DOA also has limited experience in the promotion of participatory and social inclusion services. The overall leadership and coordination of this support will be critical to the effective implementation of the project. B. Consultants 3. The Project will provide 36 person-months of international consulting services and 782 person-months of national consulting services. The consultants will be fielded to address the production, processing, and marketing needs of the identified beneficiaries through a participatory development approach. The consultants will provide services for training, guidance of process-related activities, and technical support for activities associated with marketing and agro-processing. 4. The consultant input will be crucial to the effective coordination of technical services, and specific technical inputs such as, facilitation of social inclusion, agribusiness, market chain development delivery through implementation of training and community capacity development programs, establishment of viable commercial activities, integration of project training inputs, gender mainstreaming, and implementation of benefit monitoring and evaluation system are vital to project success. Overall advice and leadership will be provided by the international Team Leader/ Project Management and Market Chain Development Advisor (36 person-months) who will be assisted by the Deputy Team Leader/Senior Market Chain Specialist (60 person-months). These two consultants are in Package A. The other consultants in Package B are given in Table 1 below: 5. Cross cutting Values influencing Recruitment. There are value dimensions incorporated into this project which affect all activities. These will be taken into account in the selection of consultants – both international and national. Consultants need to be able to demonstrate capability, experience, and use of process methodologies in these areas. These cross-cutting values are:

(i) A holistic view of post harvest activities in the market chain with a view to strengthening linkages between stakeholders within the chain;

2 Appendix 6

Table 1: Consulting Services Input (person-months) Technical Staff International National Package A 1 Team Leader and Project Management and Market-Chain Development Advisor

(Indicative inputs 10, 10, 6, 3, 3, 4 person-months/year) 36

2 Deputy Team Leader and Senior Market-Chain Specialist 60 Package B 3 Training Design Specialist 60 4 Senior Social Inclusion and Participation Specialist 60 5 Social Inclusion Specialists (3) 180 6 Agribusiness Development Specialists (3) 180 7 Market-Chain Development Specialist 60 8 Commercial Agriculture Fund Analyst & Advisor 24 9 Community Subproject Investment Specialist 48 10 Market Information and Promotion Specialist 48 11 Monitoring and Evaluation System Design and Training Specialist 36 12 Environmental Impact Monitoring Specialist 26 Total 36 782 Source: Asian Development Bank estimates.

(ii) Participatory processes that recognizes that all stakeholders have a role in the development process and participation which involves all stakeholders is a mindset;

(iii) Adoption of the concept that all stakeholders must move ahead together and that development is not for a selected group or category;

(iv) All activities are intended to add value to products and producer incomes; (v) Equity – the process of inclusion of stakeholders on an equal footing and equity

in the distribution of benefits; which includes helping producers on to a more level playing field with other stakeholders than currently exists;

(vi) Public/private partnerships requiring an understanding of NGO and private sector modalities and the construction of partnership and contractual arrangements between these and government parties;

(vii) Social inclusion modalities with particular reference to the mobilization and inclusion of landless, the poverty affected, disadvantaged groups, women, subsistence and semi-commercial producers, into commercial activities;

(viii) Capacity building at all levels to raise general levels of awareness and knowledge of markets, marketing, crop aggregation and primary processing in rural areas;

(ix) Developing the role of women in marketing decision-making which, for many, is not a traditional area of their activity; and

(x) Environmental protection against any adverse effects arising from market chain development activities.

C. SPECIFIC TERMS OF REFERENCE

1. Package A Consultants 6. Project Management Support/Team Leadership Requirements. As this is a new and innovative Project with some unusual aspects with which the DOA is unfamiliar special strengthening of the Project Management Unit (PMU) is considered necessary. Consultants for the two Package A positions will require (i) a breadth and depth of experience in market

Appendix 6 3 development, (ii) an ability to innovate, (iii) the vision to be able to “see” the whole picture, and (iv) to be able to visualize the potentialities that lie in development that is well above the ordinary. For these reasons these two consultants will be recruited individually in accordance to the Asian Development Bank (ADB)’s procedures for recruiting individual consultants immediately after project effectiveness to assist the MOAC with project start-up activities including (i) recruiting the other project consultants through a firm and (ii) facilitating commencement of commercial agriculture alliance (CAA) operations.. 7. The Package A consultants will be recruited within one month of the Project becoming effective and ahead of Package B consultants. During this period they will be responsible for (i) confirmation, in consultation with ADB and the Project Manager, of the Project Administration Memorandum (PAM), (ii) assist the PMU with guidelines and criteria for Package B selection, contract preparation and contract negotiations, (iii) the preparation of documentation for NGO and training service provider partnership agreements, (iv) refinement of criteria for pocket area selection, (v) assist the Project Manager to prepare work plans, and(vi) the preparation of briefing materials for Package B consultants to facilitate their immediate effectiveness. 8. Overall leadership and advice is required for coordination of technical inputs, implementation of a participatory process approach, training design, the development of partnership arrangements with NGOs and training providers, agribusiness and marketing and other aspects of implementation will be strengthened through services provided by the international Project Management Adviser/Market Chain Development Specialist/Team Leader (periodic inputs totaling 36 person months over the implementation period). He/she will be supported by the domestic, Deputy Team Leader/Senior Market Chain Specialist (60 person months or 10 months per year over the implementation period). Both consultants will be responsible to the Project Manager. 9. The coordination with and direction of Package B consultants required of the Package A Advisors includes the following:

(i) Assist the Project Manager and others involved in project implementation in the planning, scheduling and direction of all consultant inputs to coincide effectively with the schedule of implementation of the Project and the requirements of the project activities;

(ii) Briefing the consultants on arrival and jointly formulating individual work plans consistent with those of the Project;

(iii) Ensure that the international and domestic consultants are scheduled in such a way as to maximize the synergistic effects of their combined inputs through proper timing and coordination of their inputs, the development of rapport and close working relationships, and effective planning and organization to enable the longer serving domestic consultants to carry on the work program, established with the guidance of the international consultants, once the international consultants have left the field.

(iv) Arrange for joint participatory meetings of the consultants (international and national consultants), especially at the beginning of their first inputs, to develop a comprehensive understanding of the purpose of their inputs in the context of the aims and objectives of the Project, to create an integrated and holistic systems approach to their inputs, develop a team rapport between the consultants, and prepare a work plan and the approach and details of their inputs to effectively achieve their terms of reference;

(v) Provide support, through the coordination of efforts by the consultant team, to the Project Manager and other senior project staff for the refinement and further

4 Appendix 6

development of the project implementation arrangements, especially for monitoring and evaluation;

(vi) Assist in the selection of suitable candidates for training programs and local study tours and appropriate venues for their training through the combined knowledge and experience of the consultant team;

(vii) Coordinate the conduct of local study tours and district exchanges so that there is maximum synergism between the training programs and the inputs of the consultants;

(viii) Contribute to and coordinate the preparation and submission of reports, studies and promotional materials/activities to be undertaken by the consultants and ensure that standards of quality and timeliness are properly met;

(ix) Assist in sorting out any issues or problems which may develop between the consultants or between the consultants and other project staff and keep the Project Manager and the ADB Project Officer advised of any such developments and discuss with them the appropriate action to take;

(x) Keep the ADB appraised, through regular reports, of progress in the implementation of the Project and especially of any issues or delays arising, and provide advice on appropriate remedial measures; and

(xi) Provide other managerial or coordination assistance and advice to the Project Manager as may be required.

Position: Team Leader / Project Management and Market Chain

Development Advisor (International) Qualifications and Experience:

The consultant will have suitable tertiary qualifications in areas of agricultural economics, finance, processing, marketing and resource management with a strong emphasis on agribusiness development. He/she should have wide experience in the development of market chain linkages and specifically the establishment and operation of small and medium scale agro-processing and marketing enterprises in developing countries, in advising small and medium sized businesses in business establishment, management, monitoring and development (including markets), preferably in Asia. He/she should have specialist technical knowledge in some aspect of market chain development. He/she will have at least 10 years experience in advising government on policies and strategies, be familiar with ADB project implementation and management procedures.

Responsible to: Project Manager Duty Station: PMU, Biratnagar Input: 36 pm (10, 10, 6, 3, 3, 4 [actual schedule to be confirmed during

negotiations]) 10. The consultant is required to:

(i) Act as Advisor to the Project Manager on project planning and implementation issues, providing assistance with work planning, scheduling and coordination of inputs, determination of priorities and management of project resources.

(ii) Provide overall team leadership for coordination of the activities of the international and domestic consultants, with the assistance of the Deputy Team Leader/Senior Market Chain Advisor (domestic consultant). See separate Advisor/Leadership terms of reference above.

Appendix 6 5

(iii) Supervise and be responsible for the establishment of the complaint redressal mechanism for the project beneficiaries.

(iv) Review, revise and finalize the standard operating procedure, business plan, and code of conduct of CAA.

(v) Supervise and be responsible for the preparation of detailed sub-project selection criteria.

(vi) Assist the Project to select appropriate market chain development opportunities in each district that will maximize market potential and provide examples for replication to other stakeholders in other parts of the region, particularly among disadvantaged groups and communities, who have yet to receive much government support.

(vii) Provide guidance to the processing and marketing consultants and the private sector in the establishment of agro-processing and marketing enterprises including management, technical, marketing and financial considerations. Provide guidance in skills training and development for the operation of these small-scale agribusiness enterprises;

(viii) Assist the Project develop approaches and methodologies to strengthen linkages between stakeholders in the market chain and particularly between producers and others with the intention of improving returns to producers.

(ix) Work with the Monitoring and Evaluation Unit of the PMU to develop a system which is output and outcome oriented capable of informing project management, and the DOA following completion of the Project, the more cost effective market chain support mechanisms.

(x) Assist the Project to implement and to institutionalize participatory approaches that include farmers and market chain stakeholders in planning and monitoring activities, including public audit and beneficiary audit processes which serve to enhance the transparency of project implementation.

(xi) Assist the Project to achieve more continuity of individual effort at all levels to ensure that the new practices are effectively introduced and to overcome the natural conservatism of staff inexperienced in these new processes;

(xii) Assist in preparing the Project’s quarterly and annual progress reports; (xiii) Assist in undertaking the Project’s baseline and value-chain studies, identification

of subprojects, developing subproject selection criteria and help in subproject selection, developing project performance information system (PPIS), finalizing various training packages; and

(xiv) Undertake any other duties as may be reasonably assigned by the Project Manager.

Position: Deputy Team Leader / Senior Market Chain Specialist (National) Qualifications and Experience:

Tertiary qualifications in economics/marketing/commerce with a strong emphasis in market development and product value adding planning and implementation. At least 10 years of work experience in donor-funded development projects. Wide experience in market development, social analysis, participatory processes and the involvement of beneficiaries in the design and planning of the development process, especially using the ‘participatory approach’. Extensive experience in the organization, management and leadership of development teams.

Responsible to: Project Manager (Implementation of duties) and Team Leader / Project Advisor (technical performance)

Duty Station: PMU, Biratnagar Input: 60pm (10, 10, 10, 10, 10, 10 [actual schedule to be confirmed during

6 Appendix 6

contract negotiations]) 11. The consultant will carry out the following tasks:

(xv) Together with the Team Leader act as an Advisor to the Project Manager on project planning and implementation issues, providing assistance with work planning, scheduling and coordination of inputs, determination of priorities and management of project resources.

(xvi) Work with the Team Leader to provide overall team leadership for coordination of the activities of the international and domestic consultants. See separate Advisor/Leadership terms of reference above.

(xvii) Assist the Project to select appropriate market chain development opportunities in each district that will maximize market potential and provide examples for replication to other stakeholders in other parts of the region, particularly among disadvantaged groups and communities, who have yet to receive much government support.

(xviii) Provide guidance to the training and social inclusion consultants and the beneficiary stakeholders in the establishment of stakeholder based organizations capable of managing agro-processing and marketing enterprises including proposal preparation, contract formulation, negotiation and management, as well as enterprise management, technical, marketing and financial considerations. Provide guidance in skills training and development for the operation of these small-scale agribusiness enterprises;

(xix) Assist the Project develop approaches and methodologies to strengthen linkages between stakeholders in the market chain and particularly between producers and others with the intention of improving returns to producers.

(xx) Work with the social inclusion and capacity enhancement parts of the project to develop a system which is output and outcome oriented capable of informing project management, and the DOA following completion of the Project, the more cost effective market chain support mechanisms.

(xxi) Assist the Project to implement and to institutionalize participatory approaches that include farmers and market chain stakeholders in planning and monitoring activities, including public audit and beneficiary audit processes which serve to enhance the transparency of project implementation.

(xxii) Assist the Project to achieve more continuity of individual effort at all levels to ensure that the new practices are effectively introduced and to overcome the natural conservatism of staff inexperienced in these new processes;

(xxiii) Assist in preparing the Project’s quarterly and annual progress reports; (xxiv) Assist the undertaking the baseline and value-chain studies, identification of

subprojects, developing subproject selection criteria and help in subproject selection, developing performance information system (PPIS), finalizing various training packages; and to

(xxv) Undertake any other duties as may be reasonably assigned by the Project Manager.

2. Package B Consultants

Position: Training Design Specialist (National) Qualification and experiences

Master Degree in any discipline of social studies, or development studies, with minimum of five years of experience in applying participatory methodology and tools, and extensive experience in

Appendix 6 7

training management and facilitation, curriculum development, training program planning and management, monitoring training benefits and impact, and institutional networking especially enterprise related training programs.

Responsible to: Project manager (implementation duties) and Team Leader / Project Advisor (technical performance).

Duty Station: PMU, Biratnagar Input 60 pm (10, 10, 10, 10, 10, 10)

12. The consultant will carry out the following tasks:

(i) Assist with the design and sequencing and mobilization of resources for training programs to be implemented under the Project including the identification of training providers;

(ii) Provide support and coordinate all the training in CADP in close coordination with national, regional and district level training providers such as institutes, private sector organizations and NGOs;

(iii) Evaluate the training proposals received from implementation partners and make recommendations for their implementation

(iv) With the support of other consulting team members, promote participatory approaches in all aspects of project cycle implementation and management;

(v) Ensure a high level of technical and professional quality both in design and implementation of immersion training programs for DOA staff in particular the development of relevant teaching materials including manuals (to be prepared by respective consultants). Effort should be made to link field level training of producers to training provided to other stakeholders in the value chain. While so doing, the Specialist will closely work with other members of the team;

(vi) Closely work with DOA with the purpose of institutionalizing market development activities to provide continuity beyond the life of the Project. In coordination with other stakeholders and consultants provide technical support to respective DADO when they prepare their annual plans for the inclusion of marketing activities;

(vii) Conduct a rapid needs assessment of training requirements at different levels in the Project and potential immersion training candidates with the aim of ascertaining prevailing practices and level of knowledge and skills available;

(viii) Collect and compile available materials, methods, and tools in participatory approaches and effective communications with the intention of strengthening value chain linkages between stakeholders. While doing this, he/she is expected to work closely with the social inclusion specialists to identify leading organizations (e.g. networks or similar institutions) that could potentially work as a resource;

(ix) Design and conduct an evaluation at the end of every year and a critical in-depth evaluation in year 4 to identify key areas for improvement of the training program along with specific recommendations for remaining two years of the project and long term recommendations for DOA;

(x) In close consultation with Social Inclusion consultants prepare capacity building programs for CAA District Review Committee members to strengthen the appraisal, review and oversight role they play at district level;

(xi) Assist the Project Manager and other members of the implementation team with promotional activities which increases the awareness and extends the knowledge of project activities.;

8 Appendix 6

(xii) Assist the Project Manager and other members of the implementation team with inter-district communications, exchange visit programs, and coordination with respect to training and capacity building;

(xiii) Coordinate and liaise with national and international training institutions for implementation of training programs and arrange logistics;

(xiv) Assess training organizations with the view of identifying appropriate training programs and partners for CADP implementation;

(xv) Ensure that cross cutting values like social equity, gender and environment are well considered into training plans and activities; and

(xvi) Any other duties as may be assigned reasonably by the Project Manager.

Position: Senior Social Inclusion and Participation Specialist (National) Qualification and experiences

Master Degree in any discipline of social studies, or development studies with a minimum of ten years experience in applying participatory social mobilization approaches, methodology and tools. Experience in training management/facilitation, designing extension materials/publications and institutional networking. An ability to take an overview and to utilize a systemic and systematic approach. Experience with social inclusion practices such as application of affirmative action (for instance in India) and gender and development. Experience with bureaucratic as well as private sector and NGO stakeholders and systems. Experience in heading diverse teams of experts and willingness and ability to spend at least 50% of work time in the field/districts.


Duty Station: PMU Biratnagar Input 60 pm (10, 10, 10, 10, 10, 10)


(i) Oversee, guide and manage the Inclusive Development of Stakeholders Component under the direct supervision of the Project Manager;

(ii) Provide training and prepare training and extension materials for the project team, beneficiary groups and the CAA on all aspects related to equity (participation and benefits), gender and development, social mobilization and group formation;

(iii) Oversee and monitor the social mobilization activities to be carried out by implementing partner NGOs and provide overall guidance and coordination for synergy of social mobilization approaches and methodologies including the consolidation of the notion of partnership;

(iv) Assist with the identification and suitability screening and selection of NGOs and other service providers; and maintain a watching brief over the activities for NGO engaged in partnership agreements for adherence to the agreed plan of operations;

(v) Prepare and manage work contracts/partnership agreements with implementing partners such as local and district level NGOs and private stakeholders;

(vi) Monitor engagement of NGOs on a regular basis and report engagement results to beneficiaries, Project Manager and ADB;

(vii) Supervise and work closely with a team of Social Inclusion Specialists at the district level and guide them to undertake their work according to their TOR;

Appendix 6 9

(viii) Assist the PMU team to prepare Beneficiary Monitoring guidelines and guidelines on the non-quantifiable aspects of the project, such as attitudinal, capacity and linkage changes and ensure that capacity building and project orientation for Beneficiary Monitoring is carried for project beneficiaries and is included in the social mobilization campaign;

(ix) Provide policy guidance, coordination and information on CADP implementation to the lead NGO of the associated JFPR Project for synergy and complementarities of activities;

(x) Oversee and monitor the implementation of the Gender Action Plan and ensure that women participate equally in all aspects and activities in the Project;

(xi) Ensure that social inclusion is also practiced in the context of the project management structures and create awareness about inclusionary practices such as affirmative action for the project team, the CAA and CAA branches;

(xii) Monitor any adverse social and conflict related impacts, including resettlement of the project and recommend remedial or mitigating action and liaise with the CAA Compliance Officer and,

(xiii) Perform other training related activities as deemed necessary by Project Manager.

Position: Social Inclusion Specialists (3) (National) Qualification and experiences

Bachelor Degree in any discipline of social studies, or development studies or agriculture sciences with a minimum of three years experience in applying participatory social mobilization methodology and tools. Experience in training management/facilitation, designing extension materials/publications and institutional networking.


Duty Station: One covering Saptari, Siraha, Sunsari, and Udayapur One covering Morang, Jhapa, Dhankuta, and Ilam. One covering Panchtar, Teratum, and Taplejung Duty stations for each to be determined by the Project Manager and in conjunction with locations for the agribusiness consultants

Input 3 x 60 pm (10, 10, 10, 10, 10, 10) 14. The Specialist will perform the following tasks:

(i) Monitor the social mobilization activities to be carried out by implementing partner NGOs and provide overall guidance and coordination for synergy of social mobilization approaches and methodologies including the consolidation of the notion of partnership;

(ii) Manage and oversee work contracts/partnership agreements with implementing partners such as NGOs, service providers, and private stakeholders;

(iii) Monitor and enforce engagement of NGOs on a regularly basis and report engagement results to beneficiaries, Project Manager and ADB;

(iv) Assist the PMU team to prepare beneficiary monitoring guidelines and guidelines on the non-quantifiable aspects of the project, such as attitudinal, capacity and linkage changes and ensure that capacity building and project orientation for beneficiary monitoring is carried for project beneficiaries and is included in the social mobilization campaign;

(v) Assist with the implementation of the Gender Action Plan and ensure that women participate equally in all aspects and activities in the Project;

10 Appendix 6

(vi) Ensure that social inclusion is also practiced in the context of the project management structures and create awareness about inclusionary practices such as affirmative action for the project team, the CAA and CAA branches;

(vii) Monitor any adverse social and conflict related impacts, including resettlement of the project and recommend remedial or mitigating action and liaise with the Senior Social Inclusion Specialist and;

(viii) Perform other training related activities as deemed necessary by Project Manager.

Position: Agribusiness Development Specialists (3) (National) Qualification and experience

Bachelor Degree in agricultural economics, marketing or business management. At least 5 years experience in farm planning and economic analysis, and extensive experience in small to medium scale agro-enterprise management. Experience with externally funded development programs would be desirable, preferably with experience in market oriented projects.


Duty Station: One covering Saptari, Siraha, Sunsari, and Udayapur One covering Morang, Jhapa, Dhankuta, and Ilam. One covering Panchtar, Teratum, and Taplejung Duty stations for each to be determined by the Project Manager and in conjunction with locations for the social inclusion consultants

Input 3 x 60 pm (10, 10, 10, 10, 10, 10) 15. The Specialist(s) will undertake the following tasks:

(i) Develop simple enterprise analysis tools (models) for the use of CAA District Review Committee members, cooperating NGOs, producers, entrepreneurs and the DOA staff (based on beneficiary household characteristics and the commodity/market chain enterprise characteristics of CADP);

(ii) Based on available technology/options and constraints, develop cost minimization techniques/tools for the use of DISTRICT REVIEW COMMITTEE members, cooperating NGOs, producers, entrepreneurs and the DOA staff;

(iii) Assist with the development of curriculum on entrepreneurship development and business planning for the training of stakeholders at district level (producers, CAA District Review Committee members, etc);

(iv) Train project staff and DISTRICT REVIEW COMMITTEE members in development and use of enterprise analysis and cost minimization tools;

(v) Train project staff and DAC members on entrepreneurship development and business planning;

(vi) Assist project staff and producers in farm enterprise analyses (field training); (vii) Assist the private entrepreneurs on enterprise analyses (field training); (viii) Develop training materials on farm enterprise analyses, cost minimization tools

and agribusiness planning; (ix) Review and update marketing and processing enterprise financial models, as

required; and (x) Undertake any other duties as requested by the Project Manager.

Position : Market Chain Development Specialist (National) Qualifications Masters Degree in agriculture economics, agricultural marketing or

Appendix 6 11 and Experience : related disciplines, specializing in strengthening and streamlining linkages

within the marketing chain and with the objective of increasing producer involvement and control in the chain. At least 10 years experience in the implementation, monitoring and evaluation of rural marketing projects. Preferably with wide experience in the agriculture sector.

Responsible to : Project Manager (Implementation) and Team Leader / Project Advisor ( Technical Performance)

Duty Station: Biratnagar Input : 60 pm ( 10, 10, 10, 10, 10, 10 )

16. The specialist will carry out the following tasks:

(i) Undertake market chain evaluations and analyses indicating the key stakeholders, identifying margins, cross district characteristics, problems, opportunities and key entry points for interventions;

(ii) Identify products and entry points where value adding activities can be made; (iii) Identify product development in terms of packaging and processing options; (iv) Conduct awareness building workshops where market chain analyses are

presented to stakeholders; (v) Identify areas in respective market chains where improvements to price

efficiency, quality improvement and information systems can be made; (vi) Conduct workshops and seminars with market chain stakeholders to explore

linkages where upstream and downstream parties can come together for mutual benefit;

(vii) Develop and report on to other team members and in a stakeholder workshop a prioritized list of initiatives to improve the quality, storage life and returns on products to the producer;

(viii) Identify and include in training programs strategies farmers may adopt to improve their price returns e.g. quality improvement, product accumulation, primary processing, market information etc;

(ix) Identify from existing standards and legislation appropriate standards for hygiene and handling for targeted commodities and products from the farmer’s field to consumer; and develop procedures to facilitate entrepreneurs, traders, processors to follow the process of standardization of products as prescribed by Nepal Standard Institute and Department of Food Technology and Quality Control;

(x) Assist the Training Design Specialist develop training programs for producers, traders and processors in product and marketing development;

(xi) Act as a catalyst and assist with the development of partnerships between stakeholders in the marketing chain which would result in improving market chain efficiency and/or returns to producers; and

(xii) Other related activities as may be required or requested by the Project Manager. Position: Commercial Agriculture Fund Analyst & Advisor (National) Qualifications and Experience:

Master’s level in finance or economics or agriculture economics and at least 5 years work experience in financial analyses, credit distribution and investment planning and analysis.

Responsible to: CAA General Manager (implementation of duties) and Team Leader / Project Advisor (technical performance)

Duty Station: Biratnagar Input: 24 pm (4, 4, 4, 4, 4, 4)

12 Appendix 6


(i) Monitor the applications received, applications approved and applications declined and report on the same to the CAA General Manager;

(ii) Analyze the investment areas and investor categories from which applications are made and those that are approved, reporting this analysis to the General Manager;

(iii) Identify, report on (to the General Manager) and recommend any mitigating measures any problem areas or trends in the application of CAF funds;

(iv) With the Compliance Officer report on the use and impact of CAF funds in terms of integrity, fairness of application, results, equity and the benefit to less advantaged downstream stakeholders;

(v) Examine, analyze and report on the effectiveness of the application receiving, appraisal and approval processes, and

(vi) Perform any other tasks, as may be requested by the General Manager. Position: Community Sub-Project Investment Specialist (National) Qualifications and Experience:

Master degree in finance or credit or economics or agriculture economics, at least 5 years experience in project appraisal, investment analysis in banks or financial institutions and at the micro-enterprise level. Sound working knowledge of broad range of investment modalities is essential. Experience in implementation of programs involving smallholder farmers an advantage.

Responsible to: CAA General manager (implementation duties) and Team Leader / Project Advisor (technical performance)

Duty Station: Biratnagar Input: 48 pm (8, 8, 8, 8, 8, 8) 18. The Specialist will carry out the following tasks:

(i) Evaluate each sub-project and prepare gross margin and cost/benefit analyses for the guidance of other project staff in their advice to producers;

(ii) Provide specialist back-up support on aspects of storage, preservation and processing of agricultural products, and design technological interventions to meet the needs of commercial stakeholders engaged in processing, market development and export of HVC products;

(iii) With the Social Inclusion and Agribusiness specialists establish criteria for sub-project investment;

(iv) With the Training Design Specialist prepare training materials and assist with training courses on sub-project investment opportunities and constraints;

(v) With the CAF Analyst & Advisor identify and develop linkages with credit suppliers for commercial market chain investors who seek additional finance;

(vi) Identify and promote cottage industry level activities based on locally available products and which add value to the product;

(vii) Identify new product and processing investment opportunities which can be added to the indicative list of sub-projects;

(viii) Produce manuals for each intervention for the use of commercial stakeholders and for guidance of the DOA;

(ix) Liaise and conduct interactive meetings and workshops with other stakeholders in the marketing chain for sub-project investment opportunities; and

Appendix 6 13

(x) Undertake any other duties as determined by the General Manager. Position: Market Information and Promotion Specialist (National) Qualifications and Experience:

Masters degree in commerce or information systems or agriculture economics/marketing, with at least 10 years experience in the field of communication, media reporting, product promotion and marketing. Linkages to media outlets and to sources of information available to the media would be an advantage.

Responsible to: Project Manager (implementation tasks) and Team Leader / Project Advisor (technical performance).


19. The Specialist will carry out the following tasks:

(i) Together with the Agribusiness Specialists identify market trends and market chain developments and make these known to project staff and CAA District Review Committee members to raise their levels of awareness;

(ii) With the Agribusiness Specialists establish a system for publicizing market prices on market media boards, newspapers, and on radio to better inform producers of price expectations;

(iii) From project personnel, and from available national sources, obtain details of any market or processing innovations and publicize these within the project area to market chain stakeholders;

(iv) Assist the Project with the publication of reports, newsletters, manuals, reports, and any promotional material intended to publicize project performance and impact;

(v) Assist and advise on the establishment of notice boards at markets, collection centers, offices and places where stakeholders congregate and meet for the purpose of publicizing and making transparent market prices, trends, project inputs, project achievements and any other information relevant to improving knowledge levels, strengthening linkages and improving market chain performance;

(vi) With PMU and CAA Monitoring and Evaluation officers recommend monitoring procedures to evaluate the impact of information and publicity on stakeholder activity and performance;

(vii) Assist with arranging and publicizing inter-district information exchanges; (viii) Undertake any other duties as determined by the Project Manager.

Position: Monitoring and Evaluation System Design and Training Specialist

(National) Qualifications and Experience:

Masters Degree in agriculture sciences or social sciences or economics with at least 10 years of experience in the implementation, monitoring and evaluation and social/ economic analysis of agricultural and related programs, with emphasis on M&E system design, Benefit Monitoring and Evaluation (BME), and beneficiary monitoring. Experience in output and outcome monitoring is required.

Responsible to: Project manager (implementation duties) and Team Leader/ Project Advisor (technical performance and coordination)


14 Appendix 6

20. The Specialist will perform the following tasks:

(i) Work closely with all project consultants to design and implement base line studies and market chain evaluation in a way that the information could be used as bench marks for project benefit monitoring;

(ii) Work closely with the Project Management Adviser/Market Chain Development Specialist/ Team Leader and review the design of monitoring and evaluation systems being developed for the Project and propose opportunities to improve them;

(iii) Assist the Social Inclusion Specialists to establish monitoring systems at producer level that will lead to effective beneficiary monitoring and greater transparency regarding project inputs and outputs and the performance of cooperating service providers;

(iv) Assist the Training Design and Participation Specialist to develop monitoring and evaluation procedures for impact evaluation of training implemented under the project including the performance of service providers;

(v) Assist personnel assigned to the Project to establish reporting formats and institutionalize them with DOA and MOAC;

(i) Assist the Project with effective reporting and communication and the development of better integration and coordination of agricultural processing and marketing related activities between the public and the private sectors, especially in terms of market development; and

(ii) Undertake any other duties as may be reasonably assigned by the Project Manager.

Position: Environmental Impact Monitoring Specialist (National) Qualification and experience

Masters degree in environmental science or related disciplines, specializing in natural resource and environmental management issues in the agriculture/livestock sector especially those related to agro-processing and value adding activities. At least 5 years experience in the conduct of environmental impact assessment in agriculture and related activities and development of mitigating measures to reduce environmental impact. Experience with internationally funded development programs would be desirable, preferably with experience in other developing countries in Asia.

Responsible to: Project manager (implementation duties) and Team Leader / Project Advisor (technical performance)

Duty Station: Biratnagar Input 26 pm (3, 3, 5, 5, 5, 5)

21. The Specialist will undertake the following tasks:

(i) Conduct a study for Initial Environment Examination (IEE) of the proposed CADP sub-projects and provide an indicative impact statement for the guidance of project management and staff;

(ii) Prepare guidelines for project staff and DISTRICT REVIEW COMMITTEE for the establishment of marketing and processing activities at Village level (collection, storage, primary processing activities) and along the marketing chain;

(iii) Based on the existing level of environmental awareness of the various stakeholders, prepare training materials on different aspect of environmental

Appendix 6 15

problems emanating from crop aggregation and transport and product processing activities in rural and urban environments respectively, in order to raise awareness and sensitivity to these potential problems;

(iv) Develop strategies for raising environmental awareness at rural and urban levels by involving respective stakeholders (line agencies, NGO, private sectors, municipalities, DDC, VDCs etc.) and consumers. Review and evaluate these strategies in inputs 3 – 5 above, make adjustments and recommendations for adoption ;

(v) Assist the Training Design and Participation Specialist to develop training packages with implementation strategies and to review completed training for impact and effectiveness;

(vi) Provide training to DOA staff on environmental impacts emanating from crop production and processing and marketing activities and environmental impact assessment;

(vii) Flag out the pertinent policy issues and make recommendations for necessary adjustments;

(viii) Assist the Project and DOA to establish environmental monitoring systems; and (ix) Carry out duties as requested by the Project Manager.

3. Supporting Staff

Position: Administrative Officer (Domestic) Qualification and experience

Bachelor Degree in business administration would be advantageous, and at least 5 years of experience with administration of internationally funded projects will be essential. Proficiency (written and spoken) in English will be required as will be proven ability as an effective administrator.


Duty Station: Biratnagar Input 72 pm (12, 12, 12, 12, 12, 12)

22. The Administrative Officer will have the following responsibilities:

(i) Manage day-to-day office administration, library and computer maintenance; (ii) Update and maintain the document/information in the PMU and provide

assistance to the project districts; (iii) Coordinate the logistics and transport/schedule for the technical team of

expatriate and local consultants; (iv) Provide assistance for maintaining the office equipment and computers in the

project districts; (v) Assist in the planning, local procurement and any other logistics as required at

the regional office level; and (vi) Provide necessary support for the preparation of different reports related to

project activities. Position: Processor/Desk Top Publisher (Domestic) Qualification and experience

Intermediate level education qualifications with training, experience and competency in processing, and desk top publishing, filing, and above average planning and reporting skills, and at least 5 years of experience with internationally funded projects will be essential. Ability to report,

16 Appendix 6

interpret and portray information in written, graphic and video format to a variety of readers and viewers. Proficiency (written and spoken) in English will be required.


Duty Station: Biratnagar Input 72 person months (12, 12, 12, 12, 12, 12) 23. The Processor/Desk Top Publisher will have the following responsibilities:

(i) Manage the production of promotional, technical and information material for CADP;

(ii) Manage document preparations; (iii) Establish a style and format which distinguishes material prepared and

disseminated by CADP; (iv) Prepare a style and format for project reports, leaflets, briefing notes, handouts

etc.; (v) Establish a data series and identification system for all project documents

produced; (vi) Ensure that all project staff contribute according to their technical field to the data

series; (vii) Assist in the preparation of annual program budgets for project districts and

PMU; (viii) Assist with any spreadsheet based accounting, planning, recording or analysis; (ix) Prepare and assist with video material suitable for training tapes and/or TV

production which publicizes the project and informs concerned persons. (x) Prepare material suitable for newspaper and/or magazines which publicizes the

project and informs concerned persons; (xi) Assist with the establishment of a monitoring and reporting system; (xii) Establish a data base for data which is part of the projects monitoring and

evaluation system; (xiii) Establish a data base for data produced or held by the project (library); and (xiv) Any other tasks as requested by the Project Manager.

Position: Secretary/ Word processor (2) (Domestic) Qualifications and Experience:

Intermediate level education qualifications with training, experience and competency in word processing skills using MSWord in English and Nepali, demonstrating high levels of accuracy and speed, planning in day-to-day activities and reporting skills, filing and spreadsheet.

Responsible to: Administrative Managers. Location: Biratnagar (2) Input: Full time 24. The Secretary/Word Processor will have the following responsibilities:

(i) Maintain efficient filing systems and up to date project information/records on project documents, contracts / disbursement, preparation of necessary accounts and its financial transactions, reports preparation, consultants' input reports to consulting firm and other documentation and records of the project activities;

(ii) Manage project reports documentation and other reports;

Appendix 6 17

(iii) Establish a design and format which distinguishes material prepared and disseminated by CADP;

(iv) Prepare a style and format for project reports, leaflets, briefing notes, handouts, newsletter etc.;

(v) Establish a data series and identification system for all project documents produced;

(vi) Assist in the preparation of annual reports/ program for the project (vii) Assist with any spreadsheet based accounting, planning, recording or analysis; (viii) Prepare material suitable for newspaper and/or magazines, which publicize the

project and inform concerned persons; (ix) Assist with the establishment of project information and reporting system; (x) Assist in establishing a project database; (xi) Establish a database for data produced or held by the project (library); (xii) Assist in day to day office requirement and other work required by the project

consultants i.e. report formats and word processing (English/Nepali), distribution and circulation of reports and information

(xiii) Assist Administrative Officer on day to day activities, repair and maintenance of office equipment/vehicle and other logistic supports;

(xiv) Provide any other assistance needed by the Project or requested by the Project Manager, Team Leader, Deputy/Team leader or other consultants.

4. Other Consultants that May be Needed

Position: Agribusiness Training Specialist (International) Qualification and experience

Appropriate tertiary qualifications in agricultural economics, marketing or business management. At least 10 years experience in planning and economic analysis, and extensive experience in small to medium scale agri-enterprise management and business development. Experience with training and development programs would be desirable, preferably with experience in other developing countries in Asia.


Duty Station: Biratnagar Input 12 pm (0, 4, 4, 4, 0, 0) Note: This is an “indicative” position in which the TOR, duration and timing of

inputs may be modified according to project requirements. 25. The Specialist will undertake the following tasks:

(i) Develop a simple enterprise analysis tool (model) for the use of the district based Agribusiness Development Specialists;

(ii) Develop curriculum on agribusiness and entrepreneurship development and business planning for the training of project staff and participating stakeholders in different parts of the value chain;

(iii) Assist the Training Design and Participation Specialist to develop and implement capacity building training programs for Project staff, DOA staff and CAA board members (and district review committee members);

(iv) Prepare agro-enterprise and market chain enterprise models for Project identified commodities which can be used as a basis for planning, training, investment and analysis;

18 Appendix 6

(v) Prepare an agribusiness development plan and manuals for the project area which will serve to guide the district based Agribusiness Development Specialists, and others, in the periods between the Specialist’s periodic inputs, and the DOA during and beyond the life of the project;

(vi) Train project staff and DOA staff on entrepreneurship development and business planning;

(vii) Assist the private entrepreneurs on enterprise analyses; (viii) Develop training materials on enterprise analyses, income maximization/cost

minimization tools and agribusiness planning; (ix) Review and update marketing and processing enterprise financial models, as

required; and (x) Undertake any other duties as requested by the Project Manager.

Appendix 7

PROCUREMENT PLAN (UPDATED: June 2008)

Project Information Project Name Nepal: Commercial Agriculture Development Project Project Number 34308 Project Cost $24.1 million Of Which ADB Grant Amounts $18.0 million Executing Agency Ministry of Agriculture and Cooperatives Approval Date of Original Procurement Plan 17 October 2006 Approval of most recent Procurement Plan 10 June 2008 Publication for Local Advertisements Target in second quarter of 2007 Period covered by this Plan 18 months from 10 June 2008

Table 1: Procurement Thresholds for Goods and Related Services, Works and Supply Procurement Method Threshold ($) Goods International Competitive Bidding (ICB) =/>500,000 Limited International Bidding >100,000 Shopping </=100,000 Exceptional Method Procurement in Loans to Financial Intermediaries Applied to procurements by recipients of the

commercial agriculture fund, including civil works in accordance with ADB’s Procurement Guidelines (2007), para. 3.12, and PAI 3.05D

Table 2: Procurement Thresholds for Consulting Services

Procurement Method Threshold ($) Quality and Cost-Based Selection (QCBS) >200,000 Consultants Qualifications Selection (CQS) </=200,000 Least-Cost Selection (LCS) </=100,000 Individual Consultant Selection (ICS) Applied in accordance with para. 2.34, ADB’s

Guidelines on the Use of Consultants (2007)

Table 3: Goods and Works Contracts in Excess of $100,000


Estimated Amount

($ million)

Number of

Contracts

Procurement

Method

Date Of

Advertisement

Prior Review (Yes/No)

Vehicles and Motorcycles 0.3 Multiple LIB/Shopping Mar 2008 Yes Office Equipment/Furniture 0.2 Multiple LIB/Shopping Nov 2007 Yes

Table 4: Consulting Services Contracts in Excess of $100,000


Estimated Amount

($ million)

Number of

Contracts

Procurement

Method

Date Of

Advertisement

Prior Review (Yes/No)

Package A Implementation Support Consultants

0.8 2 ICS Aug 2007 Yes

Package B Implementation Support Consultants

1.8 1 QCBS Nov 2007 Yes

NGO and Other Services 4.5 Multiple QCBS/CQS/ LCS

Dec 2007 Yes


SHOPPING FOR GOODS

REQUEST FOR QUOTATION (RFQG)

Notes: (i) Shopping is a simplified procedure, used for low-value, readily available off-the-shelf goods. When considering Shopping, ADB should be satisfied that there are a sufficient number of local suppliers that can meet the requirements of the procurement and ensure a satisfactory level of price competition. The threshold for Shopping is currently set at $100,000. (Paras. 4-5 “Shopping” of PAI No.3.04 “National Competitive Bidding.)

(ii) Alternate texts for some paragraphs are provided. The Employer may select one option and delete the non-applicable option.

Project Title: ___________________ Source of Funding:_______________ Contract Ref: __________ Date of Issue of Request: ______________ To:________________________ Sir: 1. You are hereby requested to submit price quotation(s) for the supply of the following items: (i)___________________________________________ (ii)___________________________________________ (iii)___________________________________________ (iv)___________________________________________ To assist you in the preparation of your price quotation we enclose the necessary technical specifications and required quantities. 2. You may quote for any or more items under this request. Each item shall be evaluated and contract awarded separately to the firm(s) offering the lowest evaluated price for each item. [Option: You must quote for all the items under this request. Price quotations will be evaluated for all the items together and contract awarded to the firm offering the lowest evaluated total cost of all the items]. 3. You shall submit one original of the Price Quotation with the Form of Bid, and clearly marked “Original”. In addition, you shall also submit one copy marked as “COPY”. Your quotation in the attached format should be sealed in an envelope and addressed to and delivered to the following address: Purchaser’s Address : _______________________________ _______________________________ Telephone : __________________ Fax : __________________



[Option: Your price quotation in the form attached may be submitted by facsimile or electronically to the following address:] Purchaser’s Address : _______________________________ _______________________________ Telephone : __________________ Fax : __________________ 4. Your quotation in duplicate and in ___________ language, should be accompanied by adequate technical documentation and catalogue(s) and other printed material or pertinent information (in _________ language) for each item quoted, including names and addresses of firms providing after-sales service facilities in ____________ (name of the country). 5. The deadline for receipt of your quotation (s) by the Purchaser at the address indicated in Paragraph 3 is: ________________ 6. You quotation(s) should be submitted as per the following instructions and in accordance with the attached Contract. The attached Terms and Conditions of Supply is an integral part of the Contract.

(i) PRICES: The prices should be quoted for supply and delivery to _________ (place of destination). Prices shall be quoted in the currency of the Purchaser.

(ii) EVALUATION OF QUOTATIONS: Offers determined to be substantially responsive

to the technical specifications will be evaluated by comparison of their prices. In evaluating the quotations, the Purchaser will determine the evaluated price for each proposal by adjusting the price quotation to correct any arithmetical errors as follows: (a) where there is a discrepancy between amounts in figures and in words, the

amount in words will govern; (b) where is a discrepancy between the unit rate and the line item total resulting from

multiplying the unit rate by the quantity, the unit rate as quoted will govern; (c) if a Supplier refuses to accept the correction, his quotation will be rejected.

In addition to the quoted price, the evaluated price shall include Value Added Tax (VAT) in ___________ (Purchaser’s country) (iii) AWARD OF PURCHASE ORDER. The award will be made to the bidder offering the

lowest evaluated price and that meets the required standards of technical and financial capabilities. The successful bidder will sign a Contract as per attached form of contract and terms and conditions of supply.

(iv) VALIDITY OF THE OFFER: Your quotation(s) should be valid for a period of forty

five (45) days from the deadline for receipt of quotation(s) indicated in Paragraph 5 of this Request for Quotation.

7. Further information can be obtained from: ________________________________ ________________________________ Telephone: _____________________ Fax: _____________________


E-mail: _____________________ 8. The Purchaser intends to apply funds from the Asian Development Bank (ADB) for eligible payments under the Purchase Order resulting from this RFQ. 9. Under ADB’s Anticorruption Policy bidders shall observe the highest standard of ethics during the procurement and execution of such contracts. ADB will reject a proposal for award, and will impose sanctions on parties involved, if it determines that the bidder recommended for award or any other party, has engaged in corrupt, fraudulent, collusive, or coercive practices in competing for, or in executing, the Contract. 10. Please Confirm by fax/e-mail the receipt of this request and whether or not you will submit the price quotation(s).

Sincerely,

______________________ (Purchaser)


FORM OF CONTRACT

THIS AGREEMENT number _____ made on _________, ___ 200_, between _____________________________ (hereinafter called “the Purchaser”) on the one part and ______________________________________ (hereinafter called “the Supplier”) on the other part.

WHEREAS the Purchaser has requested for quotation for ______________ (description of goods) to be supplied by Supplier, viz. Contract _____, (hereinafter called “Contract”) and has accepted the Bid by the Supplier for the supply of goods under Contract at the sum of __________ (___________________________) hereinafter called “the Contract Price”.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. The following documents shall be deemed to form and be read and construed as part of this agreement, viz:

a) Request for Quotation; Terms and Conditions of Supply, Technical Specification;

b) Addendum (if applicable);

2. Taking into account payments to be made by the Purchaser to the Supplier as hereinafter mentioned, the Supplier hereby concludes an Agreement with the Purchaser to execute and complete the supply of goods under the Contract and remedy any defects therein in conformity with the provisions of the Contract.

3. The Purchaser hereby covenants to pay, in consideration of the acceptance of Contract, supply and delivery of the goods and remedying of defects therein, the Contract Price in accordance with Payment Conditions prescribed by the Contract.

IN WITNESS whereof the parties hereto have executed the Contract under the laws of __________ (country of Purchaser) on the date indicated above. Signature and seal of the Purchaser: FOR AND BEHALF OF _______________________ Name of Authorized Representative

Signature and seal of the Suppler: FOR AND BEHALF OF ____________________________ Name of Authorized Representative


TERMS AND CONDITIONS OF SUPPLY Project Name: _______________________ Purchaser: _______________________________ Consignee: _______________________ Package No.______________________________ 1. Schedules for Supply S. No. Item No. Quantity Delivery Time 1. 2. Spare Parts } Tools and Accessories }

Manuals } Specify, if applicable. Maintenance Requirements }

2. Fixed Price: The prices indicated above are firm and fixed and not subject to any

adjustment during contract performance. 3. Delivery Schedule: The delivery should be completed as per above schedule but not

exceeding ______ months from the date of signing of contract. 4. Insurance: The Goods supplied under the Contract shall be fully insured in a freely

convertible currency against loss of damage incidental to manufacture or acquisition, transportation, storage and delivery. The insurance shall be in an amount equal to 110 percent of the value of the Goods on “All risks” basis.

5. Applicable Law: The Contract shall be interpreted in accordance with the laws of the Purchaser's country.

6. Resolution of Disputes: The Purchaser and the Supplier shall make every effort to

resolve amicably by direct informal negotiation any disagreement or dispute between them under or in connection with the Contract. In the case of a dispute between the Purchaser and the Supplier, the dispute shall be settled in accordance with the provisions of the ________ (arbitration law or rules of the Purchaser’s country).

7. Delivery and Documents: Upon shipment, the Supplier shall notify the Purchaser and the

Insurance Company by cable of fax the full details of shipment, including purchase order number, description of goods, quantity, the vessel, the Shipping and Forwarding Receipt from freight Company showing full details, port of loading, date of shipment, port of discharge, etc. The Supplier shall mail the following documents to the Purchaser, with a copy to the Insurance Company: (i) copies of the Supplier’s invoice showing goods’ description, quantity, unit price,

and total amount; (ii) duplicate air/ truck transport document and/ or duplicate of railway transport

document, and/or duplicate FCR (Forwarders Certificate of Receipt) in 1 Original and 2 Copies marked “Freight Prepaid”;

(iii) copies of the packing list identifying contents of each package; (iv) manufacturer's or supplier's warranty certificate; (v) certificate of origin;


(vi) certificate of quality. The above documents shall be received by the Purchaser at least one week before arrival of the goods at the port of place of arrival and, if not received, the Supplier shall be responsible for any consequent expenses. 8. Payment: for your invoice will be made 100% against delivery of shipping documents,

through an irrevocable and Confirmed Letter of Credit, opened by __________________ (name of the Bank in Purchaser’s country) in favor of the _______________________ (Supplier’s Bank).

9. Warranty: Goods offered should be covered by manufacturer’s warranty for at least 12

months from the date of delivery to the Purchaser. Please specify warranty period and terms in detail.

10. Packaging and Marking Instructions: The Supplier shall provide standard packing of the

Goods as required preventing their damage or deterioration during transit to their final destination, as indicated in the Contract.

11. Defects: All defects will be corrected by the Supplier without any cost to the Purchaser

within 30 day from the date of notice by Purchaser. The name and address of service facility where the defects are to be corrected by the supplier within the warranty period are: _________________________

Address __________________ ___________________ 12. Force Majeure: The supplier shall not be liable for penalties or termination for default if

and to the extent that its delay in performance or other failure to perform its obligations under the Contract is the result of an event of Force Majeure. For purposes of this clause, “Force Majeure” means an events beyond the control of the Supplier and not involving the Supplier’s fault or negligence and not foreseeable. Such events may include, but not restricted to, act of Purchaser in its sovereign capacity, wars or revolutions, fires, floods, epidemics, quarantine restrictions, and freight embargoes. If a Force Majeure situation arises, the Supplier shall promptly notify the Purchaser in writing of such condition and the cause thereof. Unless otherwise directed by the Purchaser in writing, the Supplier shall continue to perform its obligations under the Contract as far as is reasonably practical, and shall seek all reasonable alternative means for performance not prevented by Force Majeure event.

13. Required Technical Specifications:

(i) General Description (ii) Specific details and technical standards (iii) Performance Parameters

Supplier confirms compliance with above specifications [Note: In case of deviations

supplier to list all such deviations.]


14. Failure to Perform: The Purchaser may cancel the Agreement if the Supplier fails to deliver the Goods, in accordance with the above terms and conditions, in spite of a 21-day notice given by the Purchaser, without incurring any liability to the Supplier.

NAME OF SUPPLIER: ________________________________________

Authorized Signature : ________________________________________

Place: ___________________

Date : ___________________


FORM OF QUOTATION

To:_______________________________ (Purchaser’s Name) _______________________________ (Purchaser’s Address) _______________________________ We offer to execute the___________________________________________(name and number of Contract) in accordance with the Conditions of Contract accompanying this Quotation for the Contract Price of _________________________(amount in words and numbers) (______________) (name of currency)_____________. We propose to complete the delivery of Goods described in the Contract within the following Delivery Time from the Date of Signing of the Contract. Prices and Schedules for Supply S. No. Item No. Quantity Unit Price Total Price Delivery Time 1. 2.

[Note: In case of discrepancy between Unit Price and Total derived from unit price, unit price shall prevail.]

Spare Parts } Tools and Accessories }

Manuals } Specify, if applicable. Maintenance Requirements }

This Quotation and your written acceptance will constitute a binding Contract between us. We understand that you are not bound to accept the lowest or any Quotation you receive. We hereby confirm that this Quotation complies with the Validity of the Quotation required by the Request for Quotation document. Authorized Signature: _____________________________________

Name and Title of Signatory ________________________________

Name of Supplier: _______________________________________

Address : _______________________________________

_______________________________________

Phone Number : ___________________

Fax Number, if any ___________________

Appendix 8 1

PROCUREMENT METHODS FOR GOODS/SUPPLY CONTRACTS 1. As indicated in Tables 1 and 3 of Appendix 7 (Procurement Plan), the Project is likely to use 3 of ADB’s procurement methods, namely limited international bidding, shopping procedures, and procurement procedures in loans to financial intermediaries (see also Chapter III, paragraphs 3.2, 3.5 and 3.12, respectively, of the ADB’s Procurement Guidelines). No international competitive bidding is envisaged under the Project since each contract package for goods/supply contract is expected to be below $500,000 equivalent in value. The following, therefore, provides details of each of the procurement methods prescribed for the Project. Deviations from the prescribed procurement methods and/or threshold values require ADB’s prior approval, and modifications should be appended to the Procurement Plan as an addendum. A. Limited International Bidding (LIB) 2. LIB is employed where there is only a limited number of potential bidders, or other exceptional circumstances exist that justify a departure from the full open tendering process provided for under international competitive (ICB) procedures (including where the estimated contract amount is not large enough to interest foreign suppliers and contractors through the ICB process). The use of standard bidding document (SBD) is not required, although using SBD as a model to develop simplified documents is recommended (invitation to bid, instructions to bidders, and conditions of contract from the ADB’s ICB SBD, for example, can be used with little modification). Domestic preference cannot be applied under LIB procedures. Figure 1 presents the flow chart showing the main steps for procurement under LIB. For LIB procurement, the EA:

• issues written invitations to bid (providing clear technical specifications for the required goods and related services or works, and the terms and conditions of purchase) to all bidders judged able to provide the goods, preferably a minimum of three bidders, with a minimum bidding period of 3 weeks;

• where it is thought additional suppliers might be interested in the procurement,

advertises the notice inviting bids in English (on web site, in local newspaper, through notice to embassies, etc) with a minimum bidding period of 4 weeks;

• adopts the procedures for public bid opening (i.e. bids are opened in public on the date

and at the time and place stipulated in the bid documents; the name of each bidder and, the total amount of its bid, discounts, bid security (if required), and other important information are read aloud and recorded; and all the aforementioned information is included in the record of the opening of bids, together with the names of the representatives present);1

• evaluates the bids in the same way as for ICB (see paragraphs 2.46 to 2.59 of ADB’s

Procurement Guidelines); and • no later than the date of contract award, publish the results in an English language

newspaper or well-known and freely accessible website the results identifying the bid and lot numbers, and the following information: (a) name of each bidder who submitted a bid; (b) bid prices as read out at bid opening; (c) name and evaluated prices of each bid

1 After the public opening of bids, information relating to the examination, clarification, and evaluation of bids and

recommendations concerning awards must not be disclosed to bidders or other persons not officially concerned with this process until the publication of contract award.

2 Appendix 8

that was evaluated; (d) name of bidders whose bids were rejected and the reasons for their rejection; and (e) name of the winning bidder, and the price it offered, as well as the duration and summary scope of the contract awarded.

3. As indicated in the Procurement Plan and the Grant Agreement, ADB's review will occur after the award of the contract (but before authorizing disbursement) when the EA sends:

• the withdrawal application; • copies of the signed contract; • the bidding documents; • details of bid opening procedures, including minutes of bid opening; • the bid evaluation report; • the results of the evaluation; and • a certificate of eligibility of the contract where required by ADB.

4. The above steps ensure fairness and transparency. ADB, however, reserves the right to refuse to finance the contract in case of misprocurement. In this context, ADB finances expenditures for goods and works that are procured in accordance with the provisions of the Grant Agreement and the Procurement Guidelines. If procurement is not carried out as agreed, ADB will declare misprocurement, and will normally cancel that portion of the financing allocated to the goods and works that have been misprocured. In appropriate cases, ADB may permit rebidding after declaring misprocurement. It should, however, be noted that even if a contract is awarded after obtaining a “no objection” from ADB, ADB reserves the right to declare misprocurement if it concludes that the “no objection” was issued on the basis of incomplete, inaccurate, or misleading information or the terms and conditions of the contract had been substantially modified without ADB’s approval. 5. To avoid such a situation, the EA may prefer to obtain ADB’s approval prior to awarding a contract. For this purpose, promptly after the bid evaluation but at least 30 days prior to expiration of bid validity, ADB must be given three copies of:

• an account of the public opening of the bids (together with the minutes of bid opening), • a summary and detailed evaluation of the bids, • the proposal for award (together with the consultants' recommendations, where

applicable), • a draft contract if such a draft differs from the draft previously approved by ADB, and • an appropriate certificate of eligibility for the proposed contract.

The EA publishes the information on the contract award (see para. 2 above) within 2 weeks of receiving ADB’s approval. If any substantial amendment to the contract is proposed after its execution, the proposed changes shall be submitted to ADB for prior approval.

Appendix 8 3

Figure 1 Procurement under Limited International Bidding1

Executing Agency ADB Suppliers

Loan/advance contracting Review list of goods to bid (from

procurement plan) approved

Prepare draft bidding documents

Advertise notice inviting bids locally in

English and make bidding EA informs ADB of the documents available Advertisement if done

(optional) Purchase bidding documents from the EA

EA issues written invitations to bid preferably to 3 bidders Prepare and submit bids

(3 week min preparation, 4 if advertised)

Public opening of bids; prepare minutes of public opening of bids

Evaluation of bids in same manner as Return signed contract to the EA

ICB process and award contract Provide performance security

Send ADB withdrawal application with - copies of the signed contract - bidding documents ADB review and approval of - details of bid opening plus minutes contract award before processing - bid evaluation report The withdrawal application.2 - results of the bid evaluation If approved prepare PCSS - a certificate of eligibility of the contract where required by ADB

Supervise and moni tor contract Execute contract _________________________________________ 1 LIB is primarily used for procurement where there are a limited number of suppliers and full ICB is not practical, in

accordance with criteria in ADB’s Procurement Guidelines. 2 ADB prior approval is strongly recommended in the case of an inexperienced EA, or where the EA cannot demonstrate

sufficient funds to finance the contract, in case of ADB’s refusal to approve the contract award.

4 Appendix 8

B. Shopping 6. Shopping is a procurement method based on comparing price quotations obtained from several suppliers, with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods or standard specification commodities of small value. Requests for quotations shall indicate the description and quantity of the goods or specifications of works, as well as desired delivery (or completion) time and place. A sample request for quotation is in Annex A. Quotations may be submitted by letter, facsimile or by electronic means. The evaluation of quotations shall follow the same principles as of open bidding. The terms of the accepted offer shall be incorporated in a purchase order or brief contract. C. Procurement in Loans to Financial Intermediaries 7. Where funds are provided to an intermediary institution to be re-lent to beneficiaries, procurement is usually undertaken by the respective beneficiaries in accordance with established private sector or commercial practices that enable sufficient competition and which are acceptable to ADB. 8. ADB does not insist on ICB procedures for loans/grants for relending to subborrowers. It will request the intermediary institution, as a project administration function (including approval of individual subloans), to satisfy ADB that procurement procedures applied by them to individual subborrowers are appropriate. This includes:

• reasonable prices being paid, • procurement from eligible source countries, and • fair canvassing when selecting suppliers.

However, ADB encourages intermediaries to require their subborrowers to adopt ICB when the amount of investment is unusually large and use of ICB is economical.

Appendix 10

EXECUTING AGENCY’S PROJECT PROGRESS REPORT

1. Grant regulations and grant and project agreements require the Government and executing agency (EA) to provide ADB with reports and information it reasonably requests. These include the EA’s periodic progress reports that enable the Government, EA, and ADB to monitor project progress, become aware of problems during implementation, and assess whether the immediate project objectives will be met. Generally, the Government or EA submits the progress reports quarterly, regardless of progress achieved during the period. When little or no progress is achieved, the progress reports inform ADB of the reasons and problems delaying implementation or that may result in the immediate objectives not being met. 2. Content and Format. The content of the progress report includes sufficient information in summary form to be useful to ADB. More detailed reports are prepared by consultants or contractors for the project management office (PMO) or project implementation unit (PIU), and by the PMO or PIU for the EA’s management. These reports are held at the PMO or PIU and are made available for ADB review, midterm review, and project completion review missions. 3. The progress report sent to ADB is an executive summary of the detailed reports; with format and content permitting ADB staff to readily capture key information for inputting into ADB’s project performance report (PPR)1 as suggested in Annex A. When ADB requires detailed information (such as background to a particular problem), this is included as an appendix. Simple charts such as a bar or milestone charts to illustrate implementation progress, a chart showing actual versus planned expenditures, and the relationship between physical and financial performance are included. A framework and guidelines for calculating project progress and a sample implementation schedule are shown in Annex B. 4. Timeframe for Submission. Progress reports are normally submitted to ADB within 4 weeks after the related quarter under review. If a progress report is not received within two weeks of the scheduled date of receipt, the ADB staff responsible for implementing the project sends a reminder immediately to the Government or EA. Repeated delays in sending progress reports are recorded in the PPR and discussed with the Government or EA by ADB’s project review missions.

1 Project Performance Reports (PPRs) are part of ADB’s overall project performance management system (PPMS),

which encompasses all stages of the project cycle. PPRs provide information on project implementation and progress in achieving development objectives. Because of the cause-effect relationship between the two aspects of project performance, PPRs present explicit and verifiable performance targets that reflect progress toward achieving project objectives. They highlight performance assessments for project supervision, key assumptions and risks, major problems encountered, actual or proposed remedial actions, and the project ratings for implementation progress and the likelihood of achieving development objectives. The PPR generated for the CADP is in Annex C of this Appendix.


Pro Forma of the Executing Agency’s Project Progress Report

A. Introduction and Basic Data Provide the following:

• ADB grant number, project title, Government, executing agency (EA), implementing agencies (IAs);

• total estimated project cost and financing plan; • status of project financing including availability of counterpart funds and beneficiary

contributions; • dates of approval, signing, and effectiveness of ADB grant; • original and revised (if applicable) ADB grant closing date and elapsed project period based

on original and revised (if applicable) grant closing dates; and • date of last ADB review mission.

B. Utilization of Funds (ADB Grant, Counterpart Funds, and Beneficiary Contributions, if

applicable) Provide the following:

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

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

• reestimated costs to completion, need for reallocation within ADB grant categories, and whether an overall project cost overrun is likely.

C. Project Purpose Provide the following:

• status of project scope/implementation arrangements compared with those in the Project’s design and monitoring framework, and whether major changes have occurred or will need to be made;

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

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

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

D. Implementation Progress Provide the following:


• assessment of project implementation arrangements such as establishment, staffing, and funding of the PMU and CAA;

• information relating to other aspects of the EA’s and IA’s internal operations that may impact on the implementation arrangements or project progress;

• progress or achievements in implementation since the last progress report;

• assessment of the progress of each project component, such as, - recruitment of consultants, NGOs, service providers and their performance; - procurement of goods and services (from preparation of detailed designs and bidding

documents to contract awards); and - the performance of suppliers, manufacturers, and contractors for goods and works

contracts (if applicable);

• assessment of progress in implementing the overall project to date in comparison with the original implementation schedule—quantifiable and monitorable target(s), (include simple charts such as bar or milestone to illustrate progress, a chart showing actual versus planned expenditure, S-curve graph showing the relationship between physical and financial performance, and actual progress in comparison with the original schedules and budgets, the reference framework or guidelines in calculating the project progress including examples are shown in Annex B); and

• an assessment of the validity of key assumptions and risks in achieving the quantifiable implementation targets.

E. Compliance with Covenants Provide the following:

• the Government/EA/IA's compliance with policy grant covenants such as sector reform initiatives and EA reforms, and the reasons for any noncompliance or delay in compliance (if applicable);

• the Government/EA/IAs’ compliance with financial grant covenants including the EA’s/IA’s financial management, and the provision of audited project accounts and/or audited agency financial statements; and

• the Government/EA/IAs’ compliance with project-specific grant covenants associated with implementation, environment, and social dimensions.

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


Framework and Guidelines in Calculating Project Progress A. Introduction Physical and pre-commencement activities are considered in calculating project implementation progress. These activities, which may include recruitment of consultants, capacity building, detailed design, preparation of bid and prequalification documents, etc., could constitute a significant proportion of overall implementation and therefore should be counted. Each activity in the implementation schedule will be weighted according to its overall contribution (using time as a reference) to progress of project implementation. These weights will then be used to calculate the percentage of project progress along the entire time span of the project. This is to provide a holistic view of the pace of implementation. B. Framework for Compiling Activity List and Assigning Weights ADB and the EA should agree on major implementation activities and their corresponding weights. The actual project implementation progress of these activities should be reported regularly through the EA’s quarterly project progress report. To ensure ADB-wide consistency, the following framework has been established; its application will be monitored through the PPR. 1. Compilation of Activity List ADB and the EA should identify and agree on the major implementation activities. Appendix 5 of this PAM, Implementation Schedule) may be used as reference in determining major activities. The implementation plan should follow the critical path of the project’s major activities in project implementation taking account of project constraints. 2. Assignment of Weights Corresponding weights for each activity should be assigned to ensure that “project progress" measures the percentage of achievement (nonfinancial except when the project has credit components) for all events during the entire duration of the implementation schedule. To avoid disproportionate assignment of weights, to the extent possible these should be evenly distributed along the implementation schedule. When activities are concurrent, avoid “double counting.” 3. Computation of Project Progress Once all activities are identified and corresponding weights assigned, project progress should be calculated using the following steps:

(i) Determine the actual percentage progress (nonfinancial) of each activity. (ii) Multiply these percentages by the assigned weight of each activity to arrive at the

weighted progress. (iii) Add up the resulting weighted progress of all activities to determine the project

progress. Following pages provides an illustration of this calculation using a generic sample implementation schedule and a specific example in the education sector.


Implementation Schedule with Activities and Weights

Yr1 Yr2 Yr3 Yr4 Yr5

A

a

B

b

Cd

c

De f

E

A C

T I

V I T

I E

S

1. Sum of all weights should equal 100 percent (a+b+c+d+e+f+g = 100%)2. When calculating the percentage of “project progress,” all completed activities should be counted as accomplished, regardless of when they

were scheduled to be completed. For example, when calculating the percentage of “project progress” after year 3, if activity D is completed inyear 3 rather than in year 2, it should still be included in the computation.

3. Total weight of each activity is as follows: Activity A–a; Activity B–b; Activity C–c; Activity D–d; and Activity E–e + f +g4. Project progress of a project is the summation of the actual percentage of progress for each activity multiplied by the total weight of each

activity.


Sample Implementation Schedule

Activities Year 1 Year 2 Year 3 Year 4(a)

AssignedWeight

(b)Actual

Progress

(a) x (b)WeightedProgress

Establish PIU 5% 100% 6%

Establish Accreditation Board, etc. 5% 0% 0%

Appoint Staff and Budget 4% 75% 3%

Adopt Architecture Plans 2% 100% 2%

Shortlist Consulting Firms 6% 100% 6%

Prepare Fellowship Program 6% 76% 4%

Prepare Civil Works Tendering 30% 0% 0%

Civil Works: Classrooms, Dorms, etc. 6% 0% 0%

Procurement of Furniture and Equipment 16% 10% 2%

Field Work of Consultants 7% 0% 0%

Provide Fellowships 6% 0% 0%

Conduct Study Tours 6% 0% 0%

Provide Curriculum Standards 6% 0% 0%Total Weight 100%

Imp. Progress 24%

(a) Assigned weight for each activity(b) Actual progress of each activity(a) x (b) weighted progress for each activityProject progress = sum of all weighted progress for each activity

Appendix 11 1

Project Completion Report General Guidelines for Preparing Project Completion Reports

(project, multiproject, sector, program, sector development program, and technical assistance loans)

CONTENTS

BASIC DATA MAP1 (Title) I. PROJECT DESCRIPTION II. EVALUATION OF DESIGN AND IMPLEMENTATION A. Relevance of Design and Formulation

B. Project Outputs C. Project Costs D. Disbursements E. Project Schedule F. Implementation Arrangements G. Conditions and Covenants H. Related Technical Assistance

I. Consultant Recruitment and Procurement J. Performance of Consultants, Contractors, and Suppliers K. Performance of the Government and the Executing Agency L. Performance of the Asian Development Bank III. EVALUATION OF PERFORMANCE A. Relevance B. Effectiveness in Achieving Outcome C. Efficiency in Achieving Outcome and Outputs D. Preliminary Assessment of Sustainability E. Impact

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS A. Overall Assessment B. Lessons C. Recommendations

1 A revised map showing the impact of the project is to be included.

2 Appendix 11

BASIC DATA A. Loan Identification 1. Country _________________________ 2. Loan/Grant Number _________________________ 3. Project Title _________________________ 4. Borrower/Recipient _________________________ 5. Executing Agency _________________________ 6. Amount of Grant _________________________ 7. Project Completion Report Number _________________________ B. Grant Data 1. Appraisal – Date Started _________________________ – Date Completed _________________________ 2. Loan/Grant Negotiations – Date Started _________________________

– Date Completed _________________________ 3. Date of Board Approval _________________________ 4. Date of Loan/Grant Agreement _________________________ 5. Date of Loan/Grant Effectiveness – In Loan/Grant Agreement _________________________ – Actual _________________________ – Number of Extensions _________________________ 6. Closing Date – In Loan/Grant Agreement _________________________ – Actual _________________________ – Number of Extensions _________________________ 7. Terms of Relending (if any) – Interest Rate _________________________ – Maturity (number of years) _________________________ – Grace Period (number of years) _________________________ – Second-Step Borrower _________________________

8. Disbursements a. Dates _______________________________________________________________________ Initial Disbursement Final Disbursement Time Interval xxx xxx xxx Effective Date Original Closing Date Time Interval xxx xxx xxx _______________________________________________________________________

Appendix 11 3

b. Amount ($_______)

Category or Subloan

Original Allocation

Last

Revised Allocation

Amount Canceled

Net Amount

Available

Amount Disbursed

Undisbursed

Balance

Total

C. Project Data

1. Project Cost ($________)

Cost Appraisal Estimate

Actual

Total

2. Financing Plan ($______)

Cost Appraisal Estimate Actual

Implementation Costs

Borrower-/Recipient-Financed ADB-Financed Other External Financing

Total

ADB = Asian Development Bank

3. Cost Breakdown by Project Components ($________)

Component Appraisal Estimate Actual

4 Appendix 11

Total

4. Project Schedule

Item Appraisal Estimate Actual

Date of Contract with Consultantsa

Completion of Engineering Designs

Civil Works Contract

Date of Award

Completion of Work

Equipment and Supplies

Dates

First Procurement

Last Procurement

Completion of Equipment Installation

Start of Operations

Completion of Tests and Commissioning

Beginning of Start-Up

Other Milestonesb

a If more than one, show dates for each contract. b Show key events not listed above, particularly for projects with elements not involving construction or supply of materials

and equipment.

5. Project (Program) Performance Report Ratings

Ratings

Implementation Period Development

Implementation Objectives

Progress

(i) From to

(ii) From to

(iii) From to

Appendix 11 5

(iv) From to

(v) From to

(vi) From to

D. Data on Asian Development Bank Missions

Name of Missiona

Date

No. of

Persons

No. of

Person-days

Specialization of Membersb

Project/(Program) Completion Reviewc

a Include identificaiton, fact-finding, preappraisal, project (program) inception, project review, special project administration, loan disbursement, and project (program) review mission. If more than one of each type of mission, number consecutively as review mission 1, 2, etc.

b May use reference letters in table, e.g., a-engineer, b-financial analyst, c-counsel, d-economist, e-procurement or consultant specialist, f-control officer, g-program officer, h-onward for other categories.

c The PCR is prepared by [name] , [designation] .

6 Appendix 11

Project Completion Report

(project, multiproject, sector, program, sector development program, and technical assistance loans)

I. PROJECT DESCRIPTION

1. Briefly describe the project’s objectives, components, and outputs; and the rationale for undertaking the project. Cross-reference the report and recommendation of the President (RRP), and use tables to present information concisely.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

2. Deal selectively with the topics discussed in paras. 3–20. Cross-reference to the RRP (or/ and appraisal report). Utilize the results of the project performance management system and project performance report as appropriate. Include a description of remedial actions in response to any “at risk” assessments. A. Relevance of Design and Formulation 3. Discuss the relevance of the project in terms of consistency with ADB’s country strategy and program, the country’s development objectives, soundness of the design, and adequacy of the formulation process (including the extent of stakeholder participation and level of ownership generated). Assess relevance at appraisal and at completion. Discuss how changes made during implementation, if any, enhanced relevance. Discuss quality of project preparatory technical assistance (TA), if any. B. Project Outputs 4. List the outputs by components as anticipated during appraisal. Assess the extent to which the expected outputs were achieved. Give reasons for any deviations and indicate whether these affected project costs, time schedules, expected benefits, or other measures of efficiency. C. Project Costs 5. Discuss project costs and explain significant overruns or underruns (in a tabular form, by year, currency, and major components or categories) and any major shifts between foreign and local costs. State the reasons for cost changes (design inadequacy, external factors, delays, etc.) and their likely effect on the project’s economic and financial rates of return. D. Disbursements 6. Assess whether the appraisal disbursement schedule was realistic. Assess any delays and corrective actions taken by the Government, executing agency (EA), and ADB if disbursements did not follow the schedule made at appraisal. Where imprest fund and/or statement of expenditure dispensation was used, evaluate the impact (negative or positive) of these procedures on implementation and the experience of the EA or ADB. E. Project Schedule

Appendix 11 7

7. Explain the causes of significant delays, referring to discussions in other paragraphs (e.g., those dealing with procurement or performance of contractors). F. Implementation Arrangements 8. Discuss the project’s implementation as designed at appraisal and any major changes in the arrangements caused by changes in the project. Assess the adequacy of implementation arrangements to deliver project outputs and achieve the project purpose. G. Conditions and Covenants 9. Explain causes of significant delays in meeting the conditions of effectiveness with attention to procedural problems in the Government's country that may affect other projects. 10. Assess the relevance of covenants. Indicate the status of compliance with all general and special covenants. If covenant compliance was delayed or breached, discuss the reasons and impact, and whether the covenant was realistic. Discuss the impact of partial or noncompliance of covenants on project performance. Recommend actions for achieving compliance. 11. Indicate if any covenant has been modified, suspended, or waived, and the justification for such actions. Where relevant, undertake a financial analysis of the EA and compare the financial ratios to check compliance with financial covenants. Review the Government’s and EA’s compliance with reporting requirements. Discuss any relevant changes in amortization between the Government and EA, and conversion of the loan to equity. H. Related Technical Assistance 12. A TCR is not required for a project preparatory TA that results in a loan/grant. A project preparatory TA resulting in a loan/grant should be evaluated in the PCR for the loan/grant project. 13. A separate TA completion report (TCR) should be prepared for any advisory TA processed in conjunction with a loan/grant. When preparing the project completion report (PCR), an assessment of the advisory TA performance should be reported and incorporated in the overall assessment of the project.

(i) If the TCR is prepared and circulated before the PCR, the PCR should discuss the salient features of the TCR, including any variations from appraisal, in its text; note the TA rating; and provide a complete citation for the TCR in a footnote.

(ii) If the TCR is prepared concurrently with the PCR, the TCR should be appended to the

PCR and salient features, including any variations from appraisal, should be noted in the PCR text. When PCR Board circulation is requested, the Office of the Secretary (OSEC) should also be informed that a TCR is appended to the PCR. This will ensure that the TCR is recorded in OSEC's database and that it is noted in OSEC's circulation memo to the Board.

I. Consultant Recruitment and Procurement 14. Discuss arrangements for consultant recruitment, any deviations from agreed procedures, and the causes of disagreements between the Government or EA and ADB on consultant selection (state how the differences were resolved). Describe any significant problems encountered with

8 Appendix 11

packaging contracts, preparing tender documents, and evaluating bids. State how they were resolved. J. Performance of Consultants, Contractors, and Suppliers 15. If any of the consultants, contractors, or suppliers used by the Government or EA failed to perform well, or vice versa, describe these instances and estimate their negative or positive effects on the quality of the project outputs, schedule, or costs. K. Performance of the Government and the Executing Agency 16. Summarize the performance of the Government and EA in meeting the responsibilities assigned in the implementation plan, and discuss any weaknesses in performance. Indicate whether the assessment of the EA's capabilities at appraisal was reasonably accurate. 17. Assess the present institutional capacity and development of the EA, including specific strengths and weaknesses, and whether institutional development measures envisaged at appraisal were adequate or successful. Assess how the project and advisory TA, if any, assisted in improving institutional capacity. 18. Rate the performance of the Government and EA as highly satisfactory, satisfactory, partly satisfactory, or unsatisfactory. L. Performance of the Asian Development Bank 19. Review ADB’s part in project implementation (e.g., approvals, disbursements, and monitoring) to determine whether any ADB failure to act promptly, or disagreements with the Government or EA on terms of reference, bid documents, awards, or other matters affected the implementa-tion procedures, project costs, or implementation schedule. If the effects are insignificant or do not permit generalized conclusions, note such instances but do not include the analysis. 20. State the type of advisory services (including training) provided by ADB and whether the assistance was adequate and timely. 21. Rate the performance of ADB as highly satisfactory, satisfactory, partly satisfactory, or unsatisfactory.

III. EVALUATION OF PERFORMANCE A. Relevance 22. Assess the relevance of design (para. 3) and the impacts of changes made at midterm review or any other point that aimed to improve relevance. B. Effectiveness in Achieving Outcome 23. Assess the extent to which the project achieved its outcome. C. Efficiency in Achieving Outcome and Outputs

Appendix 11 9

24. Assess the efficiency of investment (wherever possible, by financial and economic reevaluation or other cost-effectiveness measures) and efficiency of process. For program loans, efficiency of investment is not usually assessed (see program performance evaluation report guidelines). D. Preliminary Assessment of Sustainability 25. Assess requirements for, and likelihood of, project sustainability. Provide the rationale for recommended follow-up actions to enhance the likelihood of sustainability. E. Impact 26. Provide a general assessment of significant poverty, institutional, economic, environmental, social, and other impacts (positive and negative whether intended or not) generated during project implementation. If the project included environmental control and other safeguard measures, evaluate their implementation and effectiveness.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS A. Overall Assessment 28. Describe briefly (in one or two short paragraphs) whether the project was implemented as conceived and, if not, explain the difficulties and remedial measures undertaken. Analyze the design and monitoring framework and the project performance monitoring and evaluation system, and provide an overall project performance rating. The project should be rated as highly successful, successful, partly successful, or unsuccessful, in accordance with the definitions and guidelines provided by the ADB’s Operations Evaluation Department. 29. The calculations for deriving the ratings and the summary table do not need to be included in the PCR, but should be retained on file for reference during preparation of the PPER. B. Lessons Learned 30. Clearly describe all major lessons learned. Support identified lessons learned using the results of the project and provide the basis for drawing such lessons in relevant sections of the PCR. C. Recommendations 31. Include project-specific and general recommendations that may affect projects or may be generally applicable to ADB practices. Recommendations should be specific and within the power of the nominated entity and person responsible to carry them out. Include the name of the entity or person responsible for taking action, time frame, and responsibility for monitoring and reporting compliance. 1. Project-Related 32. Recommendations should include the following:

• Future monitoring. Describe aspects of project operation (technical, financial, personnel, management, etc.) that require monitoring, and recommend monitoring tools

10 Appendix 11

(specific reports by the Government or EA, missions, consultants, etc.) and, at least initially, time intervals for project review.

• Covenants. Recommend whether the covenants in the loan and project agreements

should be maintained in their existing form. Indicate the specific period to maintain such covenants or whether any should be changed or waived, identifying covenants to be changed or waived and the substance or wording of any change recommended.

• Further action or Follow-up. Indicate actions that may be needed to complete project

implementation (including action needed to complete disbursements and close the loan account), support its initial operation, achieve project benefits, or ensure its sustainability.

• Additional assistance. Indicate any additional assistance under new financing

arrangements (TA or loan assistance) required to substantially improve the project's performance and sustainability.

• Timing of PPER preparation. Indicate the appropriate timing for preparing the PPER.

In exceptional cases (e.g., where some works have still to be completed or where supplemental assistance may be proposed, or to allow some time for operations to settle down), the PPER is not to be undertaken before a certain date. Give reasons for proposing deferment.

2. General 33. For project appraisal, the recommendation could focus on

• ensuring the design and monitoring framework is complete and comprehensive; • assessing the EA’s capacity; • estimating costs, including allowance for contingencies; • preparing financing plans; • planning implementation; and • project scheduling.

34. For project implementation, review

• ADB’s identification and discussion of design and monitoring framework performance

targets with the EA; • the Government's and EA's contracting procedures; and ADB approval of

procure-ment documentation, including shortlists, prequalification documents, contract documents, awards, and contracts;

• disbursement procedures; • monitoring and reporting; and • special assistance provided.

Commercial Agriculture Development Project

MAJOR COVENANTS

A. GRANT AGREEMENT

Project Specific Covenants

Reference in the Agreement

Due Date

Status/Remarks

Particular Covenants The Government shall (i) maintain, or cause to be maintained, and shall cause the Commercial Agriculture Alliance (CAA) to maintain separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; (iii) furnish to ADB, as soon as available but in any event not later than 6 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors' opinion on the use of the Grant proceeds and compliance with the financial covenants of this Grant Agreement as well as on the use of the procedures for imprest account/statement of expenditures), all in the English language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request.

Article IV, Section 4.02 (a)

Submission of audit report due within 6 months after the end of the related fiscal year.

The Government shall enable ADB, upon ADB's request, to discuss the Government’s and CAA’s financial statements for the Project and its financial affairs related to the Project from time to time with the Recipient’s and CAA’s auditors, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Government unless the Government shall otherwise agree.

Article IV, Section 4.02 (b)

The Government shall enable ADB's representatives to inspect

Article IV, Section 4.03

Appendix 12 1



Due Date

Status/Remarks

2 Appendix 12

the Project, the Goods financed out of the proceeds of the Grant, and any relevant records and documents. Imprest Accounts; Statement of Expenditures Except as ADB may otherwise agree, the Government shall establish immediately after the Effective Date, two imprest accounts at Nepal Rastra Bank for the Project Management Unit (PMU) and CAA. The imprest accounts shall be established, managed, replenished and liquidated by PMU and CAA respectively, in accordance with ADB's Loan Disbursement Handbook and detailed arrangements agreed upon between the Government and ADB. The currency to be used under both imprest accounts shall be United States Dollar. The initial cumulative amount to be deposited into the imprest accounts shall not exceed the lower of (i) the estimated expenditure for the first six months of Project implementation; or (ii) the equivalent of ten (10) percent of the Grant amount.

Schedule 2, para. 5 (a)

Immediately after the Effective Date.

Project Executing Agency The Ministry of Agriculture and Cooperatives (MOAC) shall be the Project Executing Agency and responsible for overall Project coordination and monitoring.

Schedule 4, para. 1

Project Implementing Agencies The CAA shall be responsible for the implementation of Component 1, and the Department of Agriculture (DOA) shall be responsible for the implementation of Components 2, 3, 4 and 5.

Schedule 4, para. 2

Project Management Unit (PMU) The Recipient shall establish a PMU to be located at Biratnagar to be responsible for (i) preparing annual work plans and Project progress reports; (ii) recruiting consultants and award procurement contracts; (iii) supervising activities under Components 2, 3, 4 and 5 and the performance of partner NGOs and service providers under these components; and (iv) carrying out monitoring and evaluation of the activities, outputs, and expected impacts of Components 2, 3, 4 and 5.

Schedule 4, para. 3



Due Date

Status/Remarks

Appendix 12 3

The PMU shall be headed by a Project manager who shall oversee the day-to-day implementation of Components 2, 3, 4 and 5. The Project manager shall be jointly selected by MOAC and ADB from among the officers of the Government with the necessary core competence and experience and assisted by the following staff: (i) social equity officer; (ii) results-based monitoring officer; (iii) accounts and financial officer; (iv) two planning and implementation officers; (v) procurement and contract officer; (vi) two technical officers; and (vii) the necessary support staff. One of these officers shall be responsible for the management of a complaint cell to be created as part of the complaint redressal mechanism to be established under the Project. Within three months of the Effective Date, the Recipient shall ensure that the PMU shall have been fully staffed and with adequate representation of women staff.

Schedule 4, para. 4

Staffing of PMU to be completed within 3 months of the Effective Date.

Project Steering Committee (PSC) The Government shall establish a PSC chaired by secretary, MOAC with the Project manager as the member-secretary. The other members of the PSC shall comprise the director general of the Department of Agriculture (DOA), senior officials at the joint-secretary level from MOAC, Ministry of Finance, Ministry of Industries, Commerce and Supplies, Ministry of Local Development, Ministry of Women, Children and Social Welfare, and the National Planning Commission, the executive director of the Agro Enterprise Center and the General Manager. The PSC shall convene its meeting at least on semi-annual basis.

Schedule 4, para. 5

PSC to convene meetings yearly at least on semi-annual basis.

The functions of the PSC shall be to (i) oversee the entire implementation of the Project; (ii) review progress of the Project; and (iii) resolve policy issues related to the Project.

Schedule 4, para. 6

Commercial Agriculture Alliance (CAA) The responsibilities of the CAA under the Project shall be to (i) manage and disburse the Commercial Agriculture Fund (CAF); (ii) facilitate subproject linkages; and (iii) facilitate the networking of the agricultural stakeholders within the Project Area. The management of CAA shall be headed by the General Manager,

Schedule 4, para. 7



Due Date

Status/Remarks

4 Appendix 12

who shall be selected through open and competitive selection process. The General Manager shall be assisted by a company secretary, a compliance officer, a chief accountant and other support staff. The CAA shall have adopted (i) business plan; (ii) standard operating procedures which shall incorporate the principles of equitable participation of women and include provisions to prohibit any discriminatory or prejudicial measures against the minority and/or disadvantaged groups; and (iii) code of conduct which shall incorporate the conflict of interest rules for staff and members of the Board. Each of these documents must be formulated to the satisfaction of ADB.

Schedule 4, para. 8

Within 2 months of the Effective Date

The CAA shall recruit a compliance officer to undertake all necessary measures to prevent and address any financial irregularities and/or abuse of authority in the operations of CAA, including in its management of CAF. In the conduct of its duties, the compliance officer shall also be required to liase with the relevant government agencies or commissions responsible for the efforts to combat corruption and abuse of authority.

Schedule 4, para. 9

The CAA headquarters shall have been fully staffed to the satisfaction of ADB.

Schedule 4, para. 10


CAA shall have established a district branch in each of the Project districts and appoint a branch manager to head each of the district branches. The branch manager shall be recruited through open and competitive selection process. The branch manager shall be assisted by a finance and administration officer, a monitoring and evaluation officer and other support staff.

Section 4, para. 11


Each of the CAA district branches shall have been fully staffed to the satisfaction of ADB.

Section 4, para. 12


The CAA shall have formed an appraisal panel which shall make the final review and approval of the investments proposals to be financed under the CAF. The appraisal panel shall consist of five members, which includes (i) the General Manager; (ii) two Board members; and (ii) two external experts to be appointed by the

Section 4, para. 13




Due Date

Status/Remarks

Appendix 12 5

Board from the list of experts to be prepared by the General Manager. The chair of the appraisal panel shall be selected by its members. The tenure of the Board members and the external experts as appraisal panel members shall be for a period not to exceed two years. The branch manager shall have constituted a district review committee in each Project district. The tasks of the district review committee shall be to perform the initial screening of the proposals to be financed under CAF. The district review committee shall consist of (i) the branch manager; (ii) two CAA General Member representatives; (iii) one representative from the district agriculture development office; (iv) one representative from the DDC; (v) the women development officer from the district women development office; and (v) one external technical expert to be appointed by the General Manager from the list of experts prepared by the branch manager. There should be at least one female member in the district review committee. The district review committee may seek technical advice from external parties to facilitate initial screening of CAF applications. The tenure of the CAA members and the technical expert as district review committee members shall be for a period not to exceed two years.



Commercial Agriculture Fund (CAF) The CAF shall only be utilized to finance community-based market infrastructure investments and non-infrastructure investments that fulfill the following general criteria: (i) the investment must add value to agricultural products; (ii) the investment must benefit other agricultural stakeholders and the community as a whole; (iii) the investment must improve the market chain efficiency; (iv) the investment must demonstrate public good content; and (v) the investment must have strong demonstration effects on the rest of the community.


The applicants for the community-based market infrastructure investments shall be limited only to DDCs and the applicants for the non-infrastructure investments shall be limited only to the General Members of CAA. The maximum amount to be financed under CAF for each community-based market infrastructure




Due Date

Status/Remarks

6 Appendix 12

investment shall be $80,000, and for each noninfrastructure investment, the limit shall be $20,000. The maximum amount that each General Member can obtain on cumulative basis from CAF shall be $40,000, whereas, the maximum amount that each DDC can obtain on cumulative basis from CAF shall be $320,000. In the event that any appraisal panel member or his/her immediate family members shall have fifty percent (50%) or more financial interests in an entity, such entity shall not be allowed to submit financing proposals under CAF.


The specific criteria for the community-based market infrastructure investments shall have been formulated by the Recipient to the satisfaction of ADB.


Within five months of the Effective Date

The specific criteria for the non-infrastructure investments shall have been formulated by the Recipient to the satisfaction of ADB.


Within five months of the Effective Date

Governance Measures All information related to the application process and the investments approved under the CAF shall be made available to the communities within the Project Area. The applicants whose applications have been rejected shall be informed on the reasons for such rejection.


The Government shall have established a complaint redressal mechanism, to the satisfaction of ADB, to allow the intended beneficiaries of the Project to file their complaints related to the implementation of the Project and ensure that these complaints are addressed accordingly.


Within four months of the Effective Date

The Government shall ensure that the performance audit of the CAF shall be undertaken on annual basis. The audit shall include a review of all disbursements made by the CAA to the intended recipients of the CAF and evaluate the extent to which proper and timely disbursements were made. This audit shall be conducted by an independent and external auditor having at least five years of working experience as a qualified accountant.


Yearly



Due Date

Status/Remarks

Appendix 12 7

The audit report produced by the auditor should include recommendations of measures to improve the timely and effective disbursement of CAF. The CAA shall be required to fully implement these measures within one month of its receipt of the report. The General Manager, the CAA appraisal panel members and CAA compliance officer shall be required to disclose their wealth prior to undertaking and upon completion of their assignments. The disclosure must be made in a manner which would allow the public, in particular the local Project stakeholders, to have access to such information.


In order to enhance transparency and accountability in the implementation of the Project, the Government shall establish a Project website which will allow the public to track procurement contract awards, including its amount, and the list of Goods, Works and consulting services procured. In addition, the website shall also provide other relevant information related to the Project implementation including information related to Component 1.


Within six months of the Effective Date

Counterpart Funds Without limiting the generality of Section 6.05 of the Grant Regulations, the Government shall ensure that throughout the implementation of the Project, adequate budgetary allocations of the required counterpart funds are made, approved and released in a timely manner in order to ensure proper implementation of the Project.


Project Performance Management System The Project shall be monitored and evaluated to determine its efficiency (delivery of inputs against specified implementation targets and time frame) and effectiveness (outputs, outcomes, and short-term impacts) as measured against baseline pocket area and product-chain data. The baseline and product-chain studies shall be undertaken in each district and shall involve quantitative and qualitative assessments in order to provide a clear understanding of the socioeconomic characteristics of the




Due Date

Status/Remarks

8 Appendix 12

beneficiaries, including ethnicity, gender, and economic status, and an assessment of the value chain that shall serve as a benchmark against which Project progress can be measured. The Project shall solicit monitoring and evaluation feedback on the Project activities from (i) producer groups; (ii) marketing groups, associations and cooperatives; (iii) partnering NGOs and training service providers; (iv) CAA and its branch offices; (v) Project studies and reports; (vi) the Project-supported market information system; and (vii) any other relevant sources. The collected information will be analyzed, evaluated and aggregated to be utilized for (i) guidance into Project planning and implementation decision making; (ii) inclusion into the Project’s reporting framework; and (iii) utilization by institutional partners such as DOA and FNCCI.


Project Review The Government and ADB shall undertake semi-annual review of the Project, which shall cover the review of (i) the performance of PMU, CAA, and partner NGOs and service providers; (ii) physical progress of Project implementation; (iii) the extent of the inclusion of poor and excluded groups in Project implementation; (iv) compliance with the covenants under this Grant Agreement; (v) implementation of the Gender Action Plan, and (vi) other relevant matters that may arise during Project implementation.


The Government and ADB shall also undertake a comprehensive midterm review of the Project in the beginning of the fourth year to identify problems and constraints encountered during Project implementation and suggest measures to address identified constraints.


Year 4 of the Project

Project Reports The PMU shall submit quarterly and annual progress reports to ADB on Project implementation and such other reports and information related to the Project as ADB may reasonably request. Within three months of its submission to ADB, the annual progress reports shall be made available to the public, in


• Annual progress

reports to be published within 3 months of



Due Date

Status/Remarks

Appendix 12 9

particular the local stakeholders, in Nepali language. The PMU shall also submit a Project completion report (PCR) to the PSC and ADB within three months of physical completion of the Project.

submission to ADB.

• PCR to be sumitted within 3 months of physical completion of the Project.

Environment The Government shall ensure that the entire implementation of the Project, including the interventions to be financed under CAF, shall be carried out in compliance with all applicable environmental laws and regulations of the Government and ADB’s Environmental Policy (2002).


Resettlement The Government shall ensure that the implementation of the Project, including the interventions made under CAF, shall not entail land acquisition, resettlement or land donation and that no persons shall be adversely affected in terms of ADB’s Policy on Involuntary Resettlement (1995) and the prevailing laws and regulations of the Recipient.


Gender The Recipient shall take all necessary and appropriate measures to implement the Gender Action Plan to ensure that due consideration will be provided to women in the implementation of the Project, both as the beneficiaries of Project and staff in the PMU and CAA.


B. PROJECT AGREEMENT

(Between ADB and CAA) CAA shall maintain, or cause to be maintained, records and accounts adequate to identify the Goods, Works and consulting

Article II, Section 2.06



Due Date

Status/Remarks

10 Appendix 12

services and other items of expenditure financed out of the proceeds of the Grant, to disclose the use thereof in the Project, to record the progress of the Project and to reflect, in accordance with consistently maintained sound accounting principles, its operations and financial condition. CAA shall furnish to ADB all such reports and information as ADB shall reasonably request concerning (i) the Grant and the expenditure of the proceeds thereof; (ii) the Goods, Works and consulting services and other items of expenditure financed out of such proceeds; (iii) the Project; (iv) the administration, operations and financial condition of CAA; and (v) any other matters relating to the purposes of the Grant.

Article II, Section 2.08(a)

Without limiting the generality of the foregoing, CAA shall furnish to ADB quarterly and annual reports on the execution of the Project and on the operation and management of the Project facilities. Such reports shall be submitted in such form and in such detail and within such a period as ADB shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the period under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following review period.

Article II, Section 2.08(b)

Reports to be submitted to ADB within 4 weeks after the period under review

Promptly after physical completion of the Project, but in any event not later than three (3) months thereafter or such later date as ADB may agree for this purpose, CAA shall prepare and furnish to ADB a report, in such form and in such detail as ADB shall reasonably request, on the execution and initial operation of the Project, including its cost, the performance by CAA of its obligations under this Project Agreement and the accomplishment of the purposes of the Grant.

Article II, Section 2.08(c)

Not later than 3 months after physical completion of the Project

CAA shall (i) maintain separate accounts for the Project and for its overall operations; (ii) have such accounts and related financial statements (balance sheet, statement of income and expenses, and related statements) audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; and

Article II, Section 2.09(a)

Audit reports and audited financial statements to be submitted to ADB within 6 months after the related fiscal year



Due Date

Status/Remarks

Appendix 12 11

(iii) furnish to ADB, promptly after their preparation but in any event not later than 6 months after the close of the fiscal year to which they relate, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors' opinion on the use of the Grant proceeds and compliance with the financial covenants of the Grant Agreement as well as on the use of the procedures for imprest account/statement of expenditures), all in the English language. CAA shall furnish to ADB such further information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request. CAA shall enable ADB, upon ADB's request, to discuss CAA’s financial statements and its financial affairs from time to time with the auditors appointed by CAA pursuant to Section 2.09(a) hereabove, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of CAA unless CAA shall otherwise agree.

Article II, Section 2.09(b)

CAA shall enable ADB's representatives to inspect the Project, the Goods financed out of the proceeds of the Grant, properties and equipment of the CAA and any relevant records and documents.

Article II, Section 2.10

Appendix 13 1

GENDER ACTION PLAN 1. In the project area, women represent 48.5% of the population; 59.1% are illiterate (33.5% of males are illiterate). Women and men participate equally in agricultural production, but the participation of women in commercial agriculture is limited. In addition to farm activities, women perform most of the routine domestic tasks. Women are generally paid less than men for the same farm or processing work and for the same number of hours. Women have lower access than men to credit, information, and technology. Commercial agriculture development needs to increase opportunities for women, not only as unskilled laborers but also as increasingly skilled laborers and more confident decision makers. 2. Women’s Livelihood Opportunities. Due to the male-oriented inheritance distribution system, traditional gender labor allocation in households, and traditional local norms on gender access to social services, women are less prepared than men to utilize evolving economic opportunities. While men are engaged in permanent jobs, international and urban migration, business, and trade, women tend to remain at home to maintain house and farm, and ensure children’s education. Women are usually not well paid because they are unskilled, as a consequence of their low level of education. Without additional awareness, training programs, group organization, and access to credit, improving the livelihoods of rural women will be difficult. 3. Conflict-Related Gender Issues. Several districts of the Eastern Development Region are affected by violence, insecurity, extortion, and looting of banks. Women’s involvement in the Maoist army and political cadres has brought a major break in the social fabric of rural areas. Women’s household and farm-related work burden has increased dramatically because many male family members have left the villages. Women must now deal with both security forces and Maoists. Brahmin and Chhetri women who were traditionally forbidden to plough fields or repair the roofs of houses are taking on these tasks, both out of necessity and because of the evolving egalitarian value system. The number of women employed in agriculture, as farm laborers, and as workers in agro-industry decreased during the conflict. However, positive impacts may be expected as the ban on (i) uncontrolled production, sale, and public abuse of alcohol; and (ii) gambling is reportedly being implemented in Maoist-influenced areas. 4. Strategy to Redress Gender Imbalance. The problems of gender imbalance and inequity in accessing resources will be addressed by simultaneously (i) understanding the traditional linear and customary systems that define the nature of intrahousehold relationships; (ii) seeking economic opportunities along with commercial agriculture activities; (iii) reducing vulnerability and identifying mitigation measures arising from commercial agriculture; (iv) enhancing skills of women to engage directly in or benefit indirectly from commercial agriculture; (v) integrating women into effective value chains and increasing representation of women in decision-making in commercial agriculture; and (vi) increasing awareness, information, and networking. Specific activities for empowering women through project activities are presented in the following table.

2 Appendix 13

Table 1: Activities to Redress Gender Imbalance

Activity Design Features, Measures and Monitoring Indicators 1. Commercial Agriculture Investment and Management Information through the commercial agriculture alliance (CAA) about women entrepreneurs to facilitate their applications for CAA membership

• At least 30% of CAA members are women.

Special section on women and commercial agriculture in all workshops, seminars, and public relations activities, including CAA trade fairs

• Innovations and partnerships formed as a result of the workshops, seminars, and public relations activities, including trade fairs

• Attendance of meeting, and impact efficiency in changes • Contribution to proceedings of workshops • Number of developed innovations and partnerships

Subprojects in the area of community-based market infrastructure

• In the selection of the market infrastructure subprojects not less than 30% of women are involved in the decision-making process and in the operation and maintenance of the subprojects. Target is 50% female involvement

Subprojects in commercial production, processing, and marketing

• Evidence of active women’s participation in subprojects and gradual increase to 50% participation over the course of the Project

2. Inclusive Development of Stakeholders Gender disaggregated baseline survey and monitoring

Project awareness campaign and social mobilization

Group formation and basic technical skills training To reinforce female entrepreneurship in commercial agriculture, the Project will conduct female entrepreneurship training courses targeted to women trainers, nongovernment organization (NGO) staff, and women entrepreneurs.

• Quantitative and qualitative household gender data (including lineal system, residential pattern, inheritance practices, decision-making power, labor division, need and demand assessment) are included in the baseline survey and monitoring process, as well as impact indicators relevant to participation in the Project. The monitoring indicators will be specifically linked to the actions listed below to measure attitude and behavior changes, and the impacts on social and economic assets. The process of change and the impact effectiveness will be compared to the gender quantitative targets mentioned below

• 50% of beneficiaries reached are women

• Groups formed are gender sensitive and involve a target of 50% women. Where more appropriate, separate groups for women will be formed. Basic technical skills training programs have gender sensitive curriculum and involve a target of 50% women.

• 200 new women entrepreneurs trained by the end of the Project and at least 80% using their new skills in commercial agriculture

• Target of 50% of trainees are women

Appendix 13 3

Activity Design Features, Measures and Monitoring Indicators Through the preparatory phase and social inclusive component, an awareness program will inform women about commercial agriculture opportunities and constraints, expected benefits, and implications in term of participation and investment.

• 50% of the women involved in some commercial agriculture in the project area are aware of the project objectives and opportunities after 12 months of implementation, and 80% after 2 years

• Target of 50% women participation in project activities, and monitoring of their participation

Participation of the district women’s development offices and NGOs experienced in gender-related issues to improve women’s participation in the value chain.

• Integration into value chain • More representation and decisions from women • All Eastern Development Region women’s development officers

and relevant NGOs actively participating • Attendance at meetings, and impact efficiency

3. Market Information Dissemination Development of an integrated market information system

• All the information will be accessible by women

Training in market information collection, management, analysis, and dissemination

• At least 25% trainees are women

Dissemination of market information, notification of market trends and events

• At least 40% direct information recipients are women

4. Project Partners Capacity Enhancement Development of NGO capacity • The Project will set a target to ensure that 50% of NGO staff

trained are women

Development of Department of Agriculture district staff capacity

• Government agencies should encourage that female District Agriculture Development Office staff are involved in project activities

5. Project Implementation Support Participation of women on the CAA board of directors will encourage them to share their concerns and ensure balanced access to resources. The board will establish and guarantee a minimum amount of total investment for women.

• Target of 20% women representation in CAA management with important roles in deliberations

• Women on the board represent the concerns of the different socioeconomic groups

• Minutes of meeting

A professional social inclusion specialist, with experience in gender and development, will be part of the project management unit to ensure technical proposals consider gender balance

• Recruitment at the beginning of the Project • Adequate female staff in the project management unit • Social and gender inputs pragmatic enough to facilitate and

motivate the participation of women in the Project, with attached social and economic benefits

The Ministry of Women, Children, and Social Welfare will be a member of the project steering committee and will provide guidance to the Project in promoting gender balance during implementation

• Steering committee mobilized at the beginning of the Project • Effective contribution of the members • Synergies with other Ministry of Women, Children, and Social

Welfare programs in the region

Appendix 14, page 1

ADB Documents and Publications Relevant to Project Administration

Document Title Source

A. General

Anticorruption Policy (2 July 1998) http://www.adb.org/Documents/Policies/Anticorruption/default.asp

Guidelines for the Financial Governance and Management of Investment Projects Financed by ADB (revised October 2005)

http://www.adb.org/Documents/Guidelines/Financial/default.asp

e-Handbook on Project Implementation http://www.adb.org/Documents/Handbooks/Project-Implementation/default.asp

Special Operations Grant Regulations (revised 7 February 2005)

http://www.adb.org/Documents/Reports/Special-Operations-Grant-Regulations/default.asp

B. Consultants

Guidelines on the Use of Consultants by the Asian Development Bank and Its Borrowers (February 2007)

http://www.adb.org/Documents/Guidelines/Consulting/default.asp?p=cnsltng

Handbook for Users of Consulting Services (Volumes I, III and IV only)

http://www.adb.org/Consulting/Handbooks/ucsvol1.pdfhttp://www.adb.org/Consulting/Handbooks/ucsvol3.pdfhttp://www.adb.org/Consulting/Handbooks/ucsvol4.pdf

C. Procurement

Procurement Guidelines (February 2007) http://www.adb.org/Procurement/default.aspGuide on Bid Evaluation (August 2005) http://www.adb.org/Documents/Guidelines/Bid-Evaluation/guide-

bid-aug00.pdfHandbook on Problems in Procurement for Projects Financed by the Asian Development Bank (Revised November 1987, reprinted October 1995)

Hard copy to be provided on request.

Standard Bidding Documents – Procurement of Goods (including related services)

http://www.adb.org/Procurement/bidding-procedures.asp(can be downloaded as:

Single-Stage: One-Envelope Single-Stage: Two-Envelope Two-Stage: Two-Envelope Two Stage Bidding Document User’s Guide)

D. Disbursement

Loan Disbursement Handbook (January 2007)

http://www.adb.org/Documents/Handbooks/Loan_Disbursement/default.asp

http://www.adb.org/Documents/Policies/Anticorruption/default.asp

http://www.adb.org/Documents/Guidelines/Financial/default.asp

http://www.adb.org/Documents/Handbooks/Project-Implementation/default.asp

http://www.adb.org/Documents/Handbooks/Project-Implementation/default.asp



http://www.adb.org/Documents/Guidelines/Consulting/

http://www.adb.org/Consulting/Handbooks/ucsvol1.pdf



http://www.adb.org/Procurement/default.asp

http://www.adb.org/Documents/Guidelines/Bid-Evaluation/guide-bid-aug00.pdf

http://www.adb.org/Documents/Guidelines/Bid-Evaluation/guide-bid-aug00.pdf

http://www.adb.org/Procurement/bidding-procedures.asp

http://www.adb.org/Documents/Handbooks/

Appendix 14, page 2

E. Environment and Social Dimensions

Environmental Policy (2002) http://www.adb.org/documents/policies/environment/default.asp?p=policies

Environmental Assessment Requirements and Environmental Review Procedures of the Asian Development Bank (updated March 1999)

http://www.adb.org/Publications/product.asp?sku=0133NP

Environmental Guidelines for Selected Agricultural and Natural Resources Development Projects (1993)


Environmental Loan Covenant Handbook (December 1993)

Hard copy to be provided on request

Guidelines for Incorporation of Social Dimensions in Bank Operations (October 1993)

Hard copy to be provided on request

Handbook on Poverty & Social Analysis (December 2001 – working document)

http://www.adb.org/Documents/Handbooks/Poverty_Social/default.asp

Handbook on Resettlement (1998)

http://www.adb.org/Documents/Handbooks/Resettlement/Handbook_on_Resettlement.pdf

Gender Checklist – Agriculture http://www.adb.org/Documents/Manuals/Gender_Checklists/Agriculture/default.asp

F. Others

Executing Agency Progress Report (PAI 5.01)

• Appended to this PAM as Appendix 10 http://www.adb.org/Documents/Manuals/PAI/pai-5.01-dec01.pdf

Project Performance Management System

http://www.adb.org/Documents/Slideshows/PPMS/default.asp

http://www.adb.org/documents/policies/environment/default.asp?p=policies



http://www.adb.org/Documents/Handbooks/Poverty_Social/default.asp

http://www.adb.org/Documents/Handbooks/

http://www.adb.org/Documents/Manuals/Gender_Checklists/

http://www.adb.org/Documents/Manuals/PAI/pai-5.01-dec01.pdf

http://www.adb.org/Documents/Slideshows/PPMS/default.asp