Government of Nepal Ministry of Physical Infrastructure and Transport Department of Roads Nepal Strategic Roads Connectivity and Trade Improvement Project Project Procurement Strategy for Development (PPSD) May 2020, Updated July 2024 Contents Acronyms...............................................................................................................2 1. Project Overview: ......................................................................................3 2. Strategic Assessment of Operating Context and Borrower Capability.......7 2.1. Operational Context ..................................................................................7 2.2. Assessment of Borrower Capability and Project Implementing Agencies 10 2.3. Market Research and Analysis ................................................................18 2.3.1. Market Dynamics: ...................................................................................18 2.3.2. Procurement trends ................................................................................21 2.3.3. Supply Positioning ...................................................................................22 2.3.4. Supplier Preferencing ..............................................................................22 2.3.5. Analysis and Action .................................................................................24 3. Procurement Risk Analysis ......................................................................31 4. Stakeholders’ Analysis ............................................................................37 5. Procurement Objective............................................................................39 6. Summary of PPSD to support the preparation of PAD by the Bank .........46 7. RECOMMENDED PROCUREMENT APPROACH FOR THE PROJECT..............47 List of Tables Table 1: Project Overview ......................................................................................3 Table 2: Experience of DOR in Bank-funded projects ..........................................11 Table 3: SWOT Analysis of PCU............................................................................17 Table 4: SWOT Analysis of Road Contractors in Nepal .........................................19 Table 5: SWOT Analysis of Banks in Nepal...........................................................20 Table 6: Supply Positioning..................................................................................22 Table 7: Supplier Preferencing.............................................................................23 Table 8: Comparison of Item Rate Contract and New Contracting Method (HAM)24 Table 9: Conclusion by category wise intervention..............................................27 Table 10: Proposed Packaging Approach .............................................................29 Table 11: Proposed Contract Packages for NMM Road.........................................30 Table 12: Proposed Contract Packages for KDP Road ..........................................30 Table 13: Procurement Risk Analysis ...................................................................32 Table 14: Stakeholder's Analysis .........................................................................37 Table 15: Proposed Contract Approach................................................................39 List of Figures Figure 1: HAM project Awarded by NHAI ..........................Error! Bookmark not defined. Figure 2: Analysis of recent road contracts (value of works vs. no. of participating bidders) 22 Figure 3: Analysis of recent road contracts (length of road vs. no. of participating bidders) .........................................................................................Error! Bookmark not defined. 1 Acronyms ADB Asian Development Bank BOT Build Operate Transfer Development Cooperation and Implementation DCID Division DLI Disbursement Linked Indicators DoR Department of Roads, Government of Nepal ESCP Environmental and Social Commitment Plan ESIA Environment and Social Impact Assessment ESMF Environmental and Social Management Framework EXIM Export Import FY Financial Year GDP Gross Domestic Product GoN Government of Nepal HAM Hybrid Annuity Model - synonymous to MAM International Bank for Reconstruction and IBRD Development ICP Integrated Check Post IPF Investment Project Financing JICA Japan International Cooperation Agency JV Joint Venture KDP Kamala-Dhalkebar-Pathlaiya MoICS Ministry of Industry Commerce and Supplies MAM Modified Annuity Model – synonymous to HAM NHAI National Highways Authority of India NNM Nagdhunga-Naubise-Mugling NR Nepalese Rupee O&M Operation and Maintenance PCU Project Coordination Unit PDO Project Development Objectives PIU Project Implementation Unit PMU Project Management Unit PPA Public Procurement Act PPP Public Private Partnership PPPI Public Private Partnership and Investment PPR Public Procurement Rules RfP Request for Proposal RfQ Request for Qualification ROW Right of Way SBD Standard Bidding Document SRN Strategic Road Network SWOT Strength Weakness Opportunity and Threat USD United State Dollar 2 1. Project Overview: Table 1: Project Overview Country: NEPAL Full Project Name: Nepal Strategic Roads Connectivity and Trade Improvement Project Total Finance (US US$ 450 (WB) + US$351.5mn (GoN)= US$ 801.5 mn $): Project Number: P170409 A. Project Description The Project Development Objective is to improve the efficiency and safety of select transport infrastructure, improve the efficiency of cross-border trade, and strengthen capacity for strategic road network management in Nepal. In line with the PDO, the proposed project would support the Government of Nepal’s (GoN) strategy of increasing its competitiveness and growth through better transport connectivity and trade facilitation, through the following four components. Component 1: Trade Facilitation (Estimated Cost US$ 42 million; IDA financing: US$ 29.4 million): The objective of this component is three-fold: (i) reduce the time taken for goods transit at selected border crossing points; (ii) improve capacity and efficiency for sanitary and phyto-sanitary (SPS) management at selected locations and for targeted products; and (iii) enhance capacity for managing trade. The support will consist of three sub-components: (a) Augmentation of physical infrastructure, equipment, inspection, and related border transit management systems that are required to absorb increasing traffic and trade volumes at key border crossing points at Birgunj, Bhairahawa and Biratnagar. (b) Augmentation of equipment and training, and construction and/or renovation of lab buildings at key border locations; and (c) Knowledge and capacity building for: continuous improvement of the trade policy environment; monitoring of trade performance; and development and implementation, and monitoring and evaluation, of targeted trade promotion measures. Component 2: Regional Road Connectivity (Estimated Cost US$ 659 million; IDA financing: US$ 350.1 million): The objective of this component is to improve efficiency, climate resilience and safety of movement of goods and people across two roads within two transport corridors that are key for Nepal’s connectivity and trade with India and other countries. The support will consist of three sub-components: 3 (a) Improvement of the existing Nagdhunga-Naubise-Mugling road to 2-lane with 1 m paved shoulders; (b) Upgrading of the Kamala-Dhalkebar-Pathlaiya road from 2-lane to 4-lane; and, and (c) A safe corridor demonstration program (SCDP), covering a length of about 250 km. Component 3: Institutional Strengthening (Estimated Cost US$ 100.1 million; IDA financing: US$ 70.1 million): The objective of this component is to improve the capacity for management of the strategic road network in Nepal, with focus on road safety, road asset management, training and periodic maintenance, and also support training to local women to find skilled employment and livelihood opportunities. The support will consist of three sub- components: (a) Support for the National Road Safety Council through, inter alia: (i) establishment of an interim secretariat with seed funding for staffing and equipment; and (ii) support for prioritized activities from the National Road Safety Action Plan (RSAP), including coordinating, monitoring and evaluating measures under the SCDP; monitoring the working of Management Information Systems and equipment service providers; supporting nation-wide roll- out of the web-based Road Accident Information Management System (RAIMS); and supporting training and peer-exchange programs. (b) Capacity enhancement of DoR for improved management of SRN through: (i) development and mainstreaming of road asset management system; (ii) support for training facilities and training in selected priority areas, including network-level safety assessments, quality, Advanced procurement including certification, design of advanced structures, and management of environmental and social risks and impacts; and (iii)support for training to local women to find skilled employment and livelihood opportunities. (c) Support for periodic maintenance of the Core Raod Network (CRN). Component 4: Contingency Emergency Response (Estimated Cost US$ 0 million; IDA financing: US$ 0 million): Following an adverse natural event that causes a major natural disaster, the government may request the Bank to re-allocate project funds to support response and reconstruction. This component would draw resources from the unallocated expenditure category and/or allow the Government of Nepal to request the Bank to re- categorize and reallocate financing from other project components to partially cover emergency response and recovery costs. This component could also be used to channel additional funds should they become available as a result of an emergency. B. Project Development Objectives The project development objective (PDO) is to improve the efficiency and safety of selected transport infrastructure, improve the efficiency of cross-border trade, and strengthen capacity for strategic road network management in Nepal. C. Result Indicators PDO level key results indicators for the project are a) reduction in travel time, vehicle operating costs and annual fatalities related to road crashes and fatalities on the roads being improved or upgraded; 4 b) reduction in the time taken for goods transit at a major border crossing point; c) reduction in time taken for sanitary and phyto-sanitary clearances in export of selected agricultural commodities; d) increase in the percentage of Core Road Network (within the SRN) in “good” condition. D. Proposed Procurement Contract Summary The Department of Roads (DoR), Government of Nepal is the implementing agency for Component 2 and Component 3 of the project. Several rounds of stakeholder consultation with contractors and national commercial banks have been carried out in seeking contracting approaches that deliver better value-for-money for the Government while harnessing the potential of private sector efficiency. In this regard, it is proposed to undertake proposed road project component through the mix of traditional and new contracting methods as follows: 1. Item Rate Contract + 5 years of Performance based Maintenance including 1st year of Defects Liability Correction. 2. Design & Build Contract + 5 years of O&M including 1st year of DLP. 3. Modified Annuity Model (MAM) or Hybrid Annuity Model (HAM) + 6-8 years of O&M. Words – HAM and MAM are used interchangeably in the document. Note: Contracting method under D-3 above (i.e. MAM/HAM) will be taken as one of the options if the ongoing study/due diligence determines that this contracting model is feasible for Nepal. A Transaction Advisory is in place to carry out market sounding, feasibility, financial analysis and viability assessment, value for money and affordability analysis for the proposed HAM contract. The results of Transaction Advisory are awaited. Under the new contracting method, i.e., HAM model, the contractor will design, build, and maintain for 6 to 8 years. The implementing agency would contribute about 60% - 70% of construction cost while the remaining would be mobilized by the selected contractor/concessionaire through debt and/or equity and recovered through quarterly/semi-annual payments (annuities) after the completion of construction and during the operation and maintenance period of 6-8 years. Based on the discussion with stakeholders and considering the complex topography of the site, which creates many uncertainties, HAM or D&B model does not suit for NNM Road, therefore the Item Rate Contract is proposed to be adopted for the procurement of Improvement of the existing Nagdhunga-Naubise-Mugling (NNM) Road. DoR is opting to have discussion regarding the use of Hybrid Annuity Model/ Design and Build for the procurement of Upgrading of the Bagmati – Pathalaiya (53 Km) section of the Kamala-Dhalkebar-Pathlaiya Road (KDP) Road as a pilot project. For the remaining Kamala – Bagmati (77 Km) section of KDP road, item rate contract is considered. Department of Road is using Single Stage – two envelope system in the contract of estimated value more than NRs 20 million. For Nagdhunga Naubise Mugling Road works bidding after pre-qualification (with e-bidding) has been adopted. 5 For the Item Rate contracts, Standard Procurement Documents of World Bank is used. This involves two sets of Bank SPDs: (i) Prequalification Document – Works [Feb 2020]; and (ii) Request for Bids - Works (after prequalification) December 2019. This is the WB SPD with FIDIC GCC for traditional Item-rate contracts designed by the Employer + some additional provisions to take care of 5years of Performance based maintenance including one year of Defects Liability Period. To improve Competition and avoid collusion it is also proposed to have the option of using e-procurement process of Government of Nepal (https://bolpatra.gov.np/egp/) and hard copy submission. Regarding Design & Build Contract, DoR would use World Bank Standard Procurement Document (SPD) of Design and Build with Rated Criteria. Since there is no SPD for HAM, it is proposed to use the service of Transaction Advisory to prepare the bidding document in consultation with all stakeholders. Regarding Periodic Maintenance, annually 5 to 6 works contracts with Open- National approach (US$ 1 to 2 million) are envisaged. E. Legal / Policy Requirement The Bank’s Procurement Regulations for IPF Borrowers, July 2016 (Revised November 2017 and August 2018) and the provisions stipulated in the Financing Agreement will be applicable for procurement of Goods, Works, Non- Consulting and Consulting Services. The PCU within the DCID in the DoR will be responsible for overall procurement management of the Project. Procurement of goods, works, consulting and non-consulting services, may be carried out using international and /or national procurement procedures. Further, amendments or clarity would be sought to enable commercial bank financing to private sector for HAM type new contracting approach. There is no provision of HAM type contracting model in existing Public Procurement Act and Regulation. Hence, prior to its adoption, either this model should be included in Government’s policy and Public Procurement Act / regulation or an exception for the same need to be secured from the government. 6 2. Strategic Assessment of Operating Context and Borrower Capability 2.1. Operational Context A. Governance aspects Nepal, officially the Federal Democratic Republic of Nepal, is a parliamentary republic with a multi-party system. The Constitution of Nepal, adopted in 2015, affirms Nepal as a secular federal parliamentary republic divided into seven provinces. A new government, backed by an unprecedented majority in Parliament, took office on February 15, 2018. This follows successful elections for all three tiers (local, state and federal) of the new state architecture defined by the 2015 constitution. State governments largely mirror the coalition at the centre. At the sub-national level, funds, functions and functionaries hitherto managed by the central, district and village authorities are moving to the seven new provinces and 753 local governments for which new legislation, institutions and administrative procedures are being formalized as constitutionally prescribed. Meanwhile, the central level authority is being streamlined with a focus on national policies and oversight. Nepal has adopted public-private partnership approach especially for infrastructure development in the country through evolving legal and policy framework since 1992. Though it has seen success in hydropower sector, it is yet to achieve success in roads and other infrastructure sector. However, with the stable governance and need to enhance infrastructure spending, legislature is more adaptable to newer contracting mechanism which can enhance private sector participation while creating value for money for the government. B. Geographical Aspects Nepal, officially the Federal Democratic Republic of Nepal, is a landlocked country in South Asia. Country borders China in north and India in south, east and west. Other nearest countries are Bangladesh (located within 27 km of Nepal’s southeastern tip) and Bhutan, separated by the Indian state of Sikkim. It has an area of 147,181 km2. The city of Kathmandu is the capital city and also the largest city of the country. Nepal has a diverse geography, including fertile plains, subalpine forested hills, and eight of the world's ten tallest mountains, including Mount Everest, the highest point on Earth. This may pose environment risks especially because of sensitive locations of the proposed corridors. C. Economic aspects Over the past decade, Nepal’s economy growth averaged 4.7 percent (at market prices) over 2008-18 and in the recent past two years over 6.5%. Agriculture continues to play a large role, contributing over 30 percent of 7 value-added. Over a period, the service sector has grown in importance, accounting for half of value-added in recent years. Industry and manufacturing have grown more slowly and their relative share in the economy has averaged 16 percent of GDP over the past decade. Inflation was in single digits for most of the past decade, with the peg of the Nepalese rupee to the Indian rupee providing a nominal anchor. Inflation slowed to 4.2 percent (y-o-y) in December 2017 but increased to 6 percent (y-o-y) in March 2018 owing to a sharp uptick in vegetable prices. Meanwhile, credit growth slowed to 16.7 percent (y/y) in early 2018 compared to its peak of 31.9 percent in 2017; but growth in savings deposits continued to decline, pushing up interest rates. On the external side, the cumulative effect of a sharp trade balance deterioration and a slow growth of remittances is putting significant pressure on the current account. Economic activity, impacted by the worst floods in decades, affected agriculture output. This contributed to the slowdown in growth from its peak of 7.9 percent in FY2017 to an estimated 6.3 percent in FY2018. Fiscal balances remained sustainable owing to strong revenue growth and modest spending, although recent reforms and transition to federalism has increased spending by 4 percentage points between FY2017 and FY2018 during which fiscal transfers to subnational governments came into effect. The poverty headcount ratio (at the international $1.90 / day line) is estimated to have fallen to 10 percent in 2017 (from 15 percent in 2010). According to the 2018 Multidimension Poverty Index (MPI), about 29 percent of Nepal's population is multi-dimensionally poor. Despite the gloom and doom over the last two decades, Nepal in general has endorsed democracy, political stability, and a wave of economic reforms. Government of Nepal had organized Nepal Investment Summit 2019 on March 29-30 in Kathmandu. The summit was attended by about 1400 participants including 700 foreign delegates from various companies. In two-day summit, there was highest participation from China, which was followed by India, the two immediate neighbours. The Summit is likely to make a positive impact by creating an interface between the policymakers of Nepal with the international business players. D. Sustainability aspects Nepal has a diverse geography, including fertile plains, subalpine forested hills, and eight of the world's ten tallest mountains, including Mount Everest, the highest point on Earth. The terrain is prone to earth quacks, floods, and other natural calamities. This may pose a risk environment risks especially because of sensitive locations of the proposed corridors. Due to its environmentally sensitive geography, sector faces challenges in sourcing of aggregates required for construction of roads. Currently, bitumen is imported, mainly from India, but aggregates are met from riverbeds and/or identified mountains after following department’s 8 Environmental and Social Management Framework (ESMF), as mandated by Environment Protection Act and Regulations. Of the two roads, NNM road is vulnerable to landslides and KDP road is vulnerable to flooding given it spans multiple rivers/streams (around 75 numbers in a length of 130 km), and both are highly prone to accidents. Accordingly, appropriate climate resilient and road safety features are being sought to be incorporated in their designs. Retrofitting of Environmental and Social Impact Assessment (ESIA) for the NMM road is completed and is also in compliance with the Bank’s Environmental and Social Framework. Similarly, Project’s Environmental and Social Management Framework (ESMF) and Environmental and Social Commitment Plan (ESCP) in compliance with the Bank’s safeguards’ requirements is prepared for KDP road. With respect to labour, the country has well defined labour laws and a project specific labour management plan will be adopted. E. Technological aspects Technological aspects: While the use of technology is bit limited in construction and operation & maintenance of a road project, it is expected that the contractors would explore the area of technology intervention to optimise the time and costs for the projects. F. Regulatory & Legal aspects of Procurement The Public Procurement Act 2007 (2063) (“PPA”) and Public Procurement Regulations 2007 (2064) ("PPR") deal with the requirements and procedures relating to public procurement in Nepal. It has been amended from time to time to help expand the procurement approaches, for instance, the First Amendment to the PPA has been introduced on July 14, 2016 (2073-03-30 B.S). Subsequent to the First Amendment, certain provisions of the PPR have also been amended notably by (a) Fourth Amendment dated December 19, 2016 (2073-09-04), (b) Fifth Amendment dated 09 March 2017 (2073-11-26) (c) Sixth amendment dated May 13, 2019 ( 2076-01-30) (d) Seventh amendment dated June 06, 2019 ( 2076-02-23) (e) Eighth amendment dated August 01, 2019 (2076-04-16). Recently Ninth amendment also took place on December 30, 2019 (2076-09-14 B.S.). The First Amendment has included additional routes that the public entities can utilize for the public procurement. The key methods of procurement under the PPA prior to the First Amendment include the following: (i) through competitive bidding at national or international level, (ii) through direct procurement, and (iii) through participation of users' committee or beneficiary group, etc. The First Amendment has provided following additional four (4) procurement methods: (a) Lump sum piece rate; (b) catalogue shopping; (c) 9 limited tendering; and (d) buy back method. However, HAM is not included up to the recent amendments. Nepal has also enacted PPP Act and relevant regulations, evolved over two (2) decades since 1992. Since 2011 onwards, enactment of Investment Board Act, PPP Policy, Foreign Investment and One-Window Policy etc. has helped evolve legal framework for PPP in the country. Recent pro-investment legislation such as Public-Private Partnership and Investment (PPPI) Act, the Special Economic Zone Act, and the Foreign Investment and Technology Transfer Act, would streamline regulatory clearances and increase the ease of doing business to attract domestic and foreign direct investment. Environment Protection Act and Regulations mandate preparation of Environmental and Social Study for every infrastructure project and approval of Environmental Impact assessment before start of the Project. The department follows Environmental and Social Management Framework (ESMF) under the above Act as well as the Bank’s safeguards’ requirements. Amendments – 6th through 9th of PPR have included certain provisions related to contract implementation, which will have severe implications on contract execution, particularly when extension of contract duration for completion of work is required due to delays arising from the Employer’s default or force majeures. The new provision does not allow extension of contract beyond 50 percent of original contract duration irrespective of the delays caused by the Employer’s default or force majeure. And, further, additional administrative layer of authority for making decision on extension of time has been added if extension is 25% or more of the original contract duration. Restrictions on extension of time, for which the Contractor is not responsible, and likely delay in making decision due to additional layers of authority could potentially lead to serious challenges in contract execution resulting delays, disputes and heavy claims by Contractors and litigations. This could risk the success of the project. Recently 13th amendment took place in PPR in which is related to extension of time of contract. Contracts under this project would be procured as per the World Bank’s Procurement Regulations for IPF Borrowers (Procurement Regulations). Conclusions on Operational context • Nepal is a landlocked country with the average economy growth of around 4.7% during the last decade, and over 6.5% in last two years. • Nepal has adopted public-private partnership approach especially for infrastructure development in the country through evolving legal and policy framework since 1992. • Private Sector investment has seen some amount of success in hydro power sector, but private sector interest has been absent in road sector till now. 10 • Due to location of proposed road projects, climate resilience would be an important element in design of these projects. 2.2. Assessment of Borrower Capability and Project Implementing Agencies The implementation would be carried out as follows: • Project Coordination Unit (PCU) under MoICS will implement Component 1 (Trade Facilitation) through the Nepal Intermodal Transport Development Board (NITDB), DoC. • Development Cooperation and Implementation Division (DCID), Department of Roads (DoR) will be the implementing agency for Components 2 and 3. A Project Coordination Unit (PCU) will be formed within DCID for the implementation of the project. DCID will be headed by the Deputy Director General and will work as the Program Coordinator. Senior Divisional Engineer of DCID will work as the Project Coordinator of the Project and will work in PCU. A Separate Project office will be established in the site of NNM and KDP roads for smooth implementation of the project. DCID will also coordinate with the Maintenance Branch, Planning Branch of DOR, NRSC, and DoTM for the implementation of Component 3 for institutional strengthening activities. These agencies would be responsible for satisfactory implementation of the project activities under their purview, including compliance with fiduciary and safeguard requirements. For this, the agencies will engage Project Management and Supervision Consultants for regular supervision, monitoring and reporting of project activities. As for the periodic maintenance, DoR would have the primary responsibility of implementation, quality assurance, monitoring and reporting. The progress and performance of the project would be monitored and evaluated annually against the outcome and output indicators established and agreed as part of the Results Framework. A robust group of monitoring indicators will be put in place to track the progress of the project – (i) information on results indicators (ii) information on monitoring indicators - additional data on project progress across various functional areas such as environment, social, technical as well as financial indicators that will be collected and tracked on a periodic basis. Such monitoring and evaluation shall also include qualitative assessment of project’s performance with respect to the quality of works, governance and transparency in procurement and contract management, compliance with the commitments related to fiduciary, environmental and social safeguards agreed, as for example, through the Environmental and Social Management Framework (ESMF) and Environmental and Social Commitment Plan (ESCP). The DoR has about 2200 qualified staff as superintending engineers, senior divisional engineers, engineers, sub-engineers, finance officers, administrative officers and supporting personnel. Similarly, DOR is managing about70 projects and 19 road maintenance divisions. The department has good in-house procurement experience for Item Rate contracts and road maintenance. The total capital expenditure of DOR in last three years is as follows: 11 Fiscal Expenditure Year 2022-23 84 Billion NPR (0.67 Billion USD) 2021-22 73 Billion NPR (0.62 Billion USD) 2020-21 82 Billion NPR (0.72 billion USD) (A) Experience in Bank and other Donor financed projects DoR is a long-time partner of the World Bank and is quite familiar with Bank safeguard policies and Bank processes. It currently implements IPF operations such as the Road Sector Development Project and the Nepal-India Regional Trade and Transport Project (NIRTTP) and the hybrid Program for Results and IPF Bridge Improvement and Management Program (BIMP). DoR also implements many ADB-funded projects and is also very familiar with ADB's safeguard policies. It has a good experience and decent track record in implementing the ESMP and RAP for the Narayanghat-Mugling (NM) Road financed under NIRTTP and RSDP particularly on bioengineering for slope protection and stabilization and recently the wildlife passages implemented in NM Road. In addition to the Bank and ADB, DoR also implements JICA funded projects. Recently a contract is concluded for the construction of Nagdhunga Tunnel at the contract value of More than US$ 136 million. DoR is also implementing EXIM Bank of India financed projects of total contract value US$ 219 million in different road projects. Department of Roads (DoR), the primary implementation agency for the Project, has implemented several IDA financed projects successfully and has gained experience in implementing bank-financed projects however, of lower order of project size, complexity and innovativeness. With few large value contracts in recent past, the DoR has gained experience in procurement and implementing large value contracts. Some of such projects are listed below: Table 2: Experience of DOR in Bank-funded projects S. Name of the Length Project Funding Implementation No. Project (km) Cost Agency Model (USD mn) (contracting method) 1 Improvement of 10.45 8.65 WB Item Rate 12 S. Name of the Length Project Funding Implementation No. Project (km) Cost Agency Model (USD mn) (contracting method) Narayanghat- Mugling Road (Km 2+400 - 12+850) 2 Improvement of 10.69 11.80 WB Item Rate Narayanghat- Mugling Road (Km 12+850 - 23+540) 3 Improvement of 12.113 14.06 WB Item Rate Narayanghat– Mugling Road (Km23+540 - 35+653) 4 SASEC Road 64.425 111.51 ADB Item Rate Improvement Project (Narayanghat Butwal Road Project Section-1) 5 SASEC Road 48.535 90.09 ADB Item Rate Improvement Project (Narayanghat Butwal Road Project Section-2) 6 SASEC Road 41.13 22.60 ADB Item Rate Improvement Project (Bhairahawa- Lumbini-Taulihawa Road) 7 Construction of 2.68 Km 136 JICA Item Rate Nagdhunga Tunnel Tunnel with Bridges and and 2.8 Access Road Km approach Road It may also be noted that all projects above received good response from the bidders and each project received 5-7 bids showing good competition. 13 (B) Experience in use of Alternative Procurement Arrangements The First Amendment to PPA Act and subsequent amendments to PPR enable procurement under additional contracting methods. However, the experience in Public-Private Partnership model for the agency has not been successful in the road sector. Further, Hybrid Annuity Model is under consideration as it has been implemented with reasonable success in the neighbouring country, i.e. India, but since it is a new model for Nepal, study to determine its feasibility is ongoing. Experience of India has been presented below. Experience of HAM in India Private Sector investment has played an important role in national highways development in India and since the year 2000, when mega highway development was launched, different models of PPP has been adopted depending upon needs of the market and to bring private sector efficiency. Following are the different type of PPP Models adopted until 2013-14: • Build Operate Transfer (BOT)- Toll • BOT- Toll with Grant • Annuity Model (MAM/HAM) There was significant slowdown in sector during the year 2012 to year 2014 due to stress on private capital and developers were finding it difficult to infuse capital in projects. In order to overcome that situation, a Hybrid Annuity Model (HAM) of PPP was introduced in FY 2015-16. The main feature of the HAM structure in the transport sector was to reduce the investment size from private sector on one hand and to continue to harness the efficiency of private sector on other hand. HAM found acceptance amongst not only developers but also amongst bankers which financed the projects. Ministry of Road Transport and Highways (MORTH), has awarded 119 projects (as on 30 Sept 19) covering the length of 6,670 km. (C) The need for hands-on support to undertake a fit for purpose procurement planning, contractor/consultant selection, and contract award. It is proposed to opt for public financing but with a small variation, that is, to pay only a portion, say 70%, of the capital expenditure on stage wise completion of capital works and pay the balance, along with the payments for maintenance, during the Operation & Maintenance phase of the contracts through semi-annuity payments. This method is commonly referred to as “Hybrid Annuity Model”, especially in India. Through this approach, the contractors are expected to mobilize the balance capital expenditure through equity and/or debt financing. To that extent, the Project seeks to harness private sector efficiencies and financing. Given that country decides to adopt such new contracting approach, the support for Sector Reform and Institutional Strengthening would be required to (a) better monitor and manage the project (b) expand the sector resource 14 base through mobilization of additional revenues, through direct and/or indirect user charges; (c) effectively deploy the same through contracting structures that can better harness private sector participation, efficiencies and financing; and (d) Familiarity of Resolving Disputes with International bidder using ICC Rules or UNCITRAL. (D) Contract management capacity and capability The legal framework (i.e., PPA and PPR as well as PPP Policy) require implementing entity: (a) To monitor progress in the implementation of procurement contract according to the contract administration work plan and inspect and examine quality aspects. (b) To manage financial aspects of contract implementation including budgetary and cost accounting aspects. The experience of implementing agency in similar projects was largely based on Item Rate contracts. For the newer contracting methods such as HAM, additional capacity building measures including competent specialist services would be necessary to strengthen the contract management capability, particularly in (i) legal capability in execution of well-defined contract, (ii) enable timely completion of project award and execution, (iii) achieve desired quality of works, (iv) managing consultants and various stakeholders, (v) contract monitoring, and (vi) claims and disputes. The PPP training and exposure to its counterparts would be required to help build inhouse capacity and capability. (E)Complaints management and dispute resolution systems: The regulatory framework (including standard contractual clauses) allows for administrative and/or contractual complaint review mechanisms to address disputes arising from the implementation of works contracts.1 For instance, the PPA/ PPR provides for amicable dispute settlement through dialogues and discussion between the disputing parties and if not resolved the same shall be resolved through Arbitration Acts, 1999. In case the party is foreign investor or company established with foreign investment, ICC RULES or UNCITRAL dispute resolution work procedure may be adopted while mentioning in arbitration related working procedure in project agreement. Such provision shall be clearly stated in project agreement. Similarly, other relevant acts such as PFBOT Act, PPA Act and PPR Act provides for adequate provisions for complaints management and dispute resolution mechanism. The project agreement draft would include methods and processes of resolving conflicts arising due to matters such as, force majeure, termination 1Procuring Infrastructure Public-Private Partnerships – Nepal (https://bpp.worldbank.org/en/data/exploreeconomies/nepal/2018) 15 of contract, changes in legal provisions and scope of work and methods of compensation. Clear complaints handling mechanism are provided in the PPA/PPR for contract award, with provision of requirement to issue Letter of Intent to award giving 7 days period for lodging complaints against intended contract award, and further complaint review by the Review Committee. Complaints handling at other stages of bidding are not addressed in the PPA/ PPR. These provisions are applicable for procurements using national procurement procedures. For high value procurements, requiring use of the World Bank’s SPDs, standard standstill period explained in the procurement regulations for borrowers shall be used. (F)Procurement capacity (previous experience, availability of resources and track record) to undertake successful fit for purpose procurement planning, procurement process, bid/proposal evaluation, supplier selection and contract award. The current procurement experience of the Departments of Roads is limited to traditional contracting approach. Therefore, for piloting HAM model the DoR would need support in the form of transaction advisory support (Consultant) in better procurement planning, stakeholder consultation, conducting and managing procurement process, bid evaluation, supplier selection, contract award and during financial closure period. (G) The reliance on, criticality of and use of professional advisors such as consultants to augment DoR capability. Experience of DoR is largely in Item Rate type contracts with very limited experience of PPPs in road sector as well as newer contracting methods like HAM. Further, very limited number of large value contracts (up to maximum of US$ 150 million) has been carried out in the road sector in past. Accordingly, capacity building support through professional advisors would be very important for augmenting the capability of the implementing agency in managing newer contracting approaches as well as higher order of project sizes and complexities. The support would be required during the process of tender and also for few years after the award of tender so that PCU and other related agencies can build their capacity in these areas of project. Further, the experts team required to support shall comprise of experts of international repute having experience in developing and developed economics on similar type of projects. Experts team shall include International Procurement & Contract Experts of such background given the size and complexity of the projects and required institutional strengthening / capacity building of DoR. (H) Lessons learned from the implementation of other similar Projects. Most of the projects were of smaller size and were implemented on Item Rate contract basis till date, with very limited exposure for Design & Build 16 type contract. However, experience of similar size contracts under Item Rate is given below. Name of Contra Agreemen Agreemen Initial Estimated Progres Reason Cost Project ct Type t date t amount Completion s till end for time overrun (NR.) Date Completion of run Date March 2020 Hetauda- Item 2016-Nov- 7126 mn 2019-Nov-06 2021-Mar-06 75% Land 10% Sindhuli Rate 07 Acquisitio Road contract n Problem Project-1 Hetauda- Design 2016-Nov- 3382 mn 2019-Nov- 2020-Aug- 92% Alignme 0% Sindhuli and 09 08 08 nt Bridge Build dispute contract Project-1 Galchi- Item 2016-Nov- 4112 mn 2018-Sep- 2021-Jun- 65% RoW not 20% Rate 07 cleared, Trisuli- 06 05 contract Compensati Mailung on dispute Hetauda- Item 2016-Nov- 7190 mn 2019-Nov- 27-Jan- 76% RoW 6.5% Sindhuli Rate 07 06 2021 clearanc Road contract e Project-2 problem, VO, Alignme nt change etc. Hetauda Design 2016-Nov- 3730 mn 2019-Nov- 2020-Jul- 94% Alignme 0% Sindhuli and 09 08 08 nt and Bridge Build location contract Project-2 dispute etc. Karnali Design 2010-Jun- 981 mn 2015-Jul-15 2014-Sep- Complet Complet 0% Bridge at and 16 09 ed ed Kothiyag build before hat, schedule Bardiya d time (1015m length) It can be seen from the above table that the Design and Build (D&B) contracts have better progress than item rate contract and moreover there is no cost overrun in D&B contract. There is time overrun in the most of above contracts which is generally due to alignment dispute and problem in land acquisition. Cost overrun is due to the requirement of more slope protection measures and some other quantities which could not be foreseen during estimate. Under the current project (SRCTIP), Right of Way for both the project roads are already under possession and is not expected to cause any problem with respect to timely completion of the contract. However, land acquisition is 17 required at few places for improving the alignment with new bridge. Detailed cost assessment has also been done for the contracts under this project, to minimize the risk in this regard. New contracting method like HAM requires contractors to commit a part of project cost and recover through annuity during O&M period, which is so far found to be implemented in India. The DoR would need to develop its capability through hands-on support as well as interactions with counterpart in India and elsewhere. From recent large value bids under ADB and JICA funded projects, it was learnt that too small projects won’t attract international players while local players lack capabilities. So stricter qualifying criteria with appropriate project size attractive for international bidders to participate is critical. Proposed Resourcing Plan:  Environmental Management Specialists  Social Safeguards Expert  PPP Expert  International Procurement Expert  Contract Management specialists  Financial Management Specialist  Other administrative staff  Consulting firms and experts with the requisite skills for delivering the Road Asset Management System and training and capacity building activities.  Project management and supervision consultants 18 SWOT analysis of PCU: Table 3: SWOT Analysis of PCU STRENGTH WEAKNESS • Domain experience and insight • Unfamiliarity with new gained by DoR in procuring procurement / contracting bank financed large road method such as Hybrid Annuity projects recently. Model Interna Interna • Competent team within DoR • Inadequate project preparation l l with adequate technical may result in delay in award capacity. • Staff may not be fully familiar • Established efficient process by with New Contracting way of on-going and completed Framework projects for item rate contracts • Experience of DoR has been and bank-funded projects. limited to managing contracts under item rate and largely limited to relatively small contract sizes (NR 5 bn). • OPPORTUNITIES THREATS • Reasonably good number of • Any constraints in budgetary contractors are participating allocation by GoN could Extern and bidding for the projects in negatively impact the project. al Nepal’s road sector (mainly for Extern • Also, none of the domestic size of contracts in the range of al contractors have experience in NR 1 to 5 bn) HAM/MAM or PPP projects in • Opportunity to develop design road sector. and build as well as public- • Contractors for large value private partnership capability. contracts are mainly foreign • More opportunities to emerge contractors (mainly Chinese and in this sector for the private Indian) with no avenues for local players especially in road contractors to directly construction technologies, participate in bid. operations and management • Banks do not get adequate which will bring in value for securities for project financing of money to the government. road projects under new contracting methods. 19 Conclusions on DoR Capability and PCU Assessment:  Develop capacity building plan with resources and impart training as per plan on the applicable Procurement Framework  Training on Public-Private Partnership, HAM Model and learning from India’s experience and other countries.  Advance Training on Procurement and International certification on Procurement like CIPS, CPSM  Adequacy of Delegation of Power and changes required  Procurement Manual and Contract Management Manual  Use of external consultants  Develop Complaint Management and Grievance Redressal System 2.3. Market Research and Analysis 2.3.1. Market Dynamics: The market research was carried out through similar experience, desktop research, stakeholder consultation workshops as well as meeting few samples stakeholders. There are two type of market players, viz., contractors and banks / financial institutions. An Interaction Program was carried out on July 19, 2019, at the office of Contractor’s association of Nepal with presence of 12 contractors, employers, and World Bank representative. Similarly, interactions with Local banks were conducted on August 23, 2019, at the World bank office with the presence of 11 Bank representatives. Joint Interaction with contractors, Bankers, DoR and World Bank representative was held on December 2, 2019, with presence of contractors’ representatives and Bank’s representatives. Details of all the 3 interaction programs are given in Annex-I. (A) Contractors Nepal is an emerging market with good potential for construction industry. Discussions were held with the representatives of contractors and associations in the consultative workshops held with the assistance of the World Bank. There are around 25+ local contractors having experience of executing road works of about US$ 5 to 10 mn and 6 to 7 contractors for up to US$ 20 mn. Market also has seen participation from mainly Chinese and Indian contractors. As per PPR, only local contractors are permitted to bid for contract value up to NRs 1 billion, and for NRs 1 to 5 billion an international contractor has to 20 form JV with domestic contractors. For large value contract, local contractors are unable to participate due to their inability to meet qualifying criteria which requires high experience and large turnovers. Capability of local contractors is largely restricted to item rate contracts, with very few bidders having limited exposure to Design & Build type contracts. In workshop organised with help of World Bank, Contractors have highlighted the following with respect to proposed contracting approaches for road projects under Component-1.  Risk of utility shifting, tree cutting, etc are best managed by the government.  Contract should be awarded only after completion of at least 80% of land acquisition as well as all clearances and approvals are in place.  More time should be allowed to bidders to carry out necessary engineering and design to assess quantities and estimate project costs compared to the timeline allowed under item rate contract. Contractors also suggested that the department may take up KDP project for new contracting approaches as KDP is relatively in plain areas unlike NMM road which is in hilly region. This will enable better private sector contribution as well as less risk of quantity variation at later stages. Since local contractor lack capability and ability to qualify large value contracts, international bidding is envisaged. However, given the opportunities from long term perspective, all stakeholders opine that there is need to capacity building of private sector, especially local contractors to take up large projects in future. Therefore, procurement may be structured in such a way that local contractor can also associate. Contractors’ ability to undertake an efficient road design is currently limited in Nepal but they are ready to take those risks if transferred to them. They believe that they would be able to manage that risk efficiently. Table 4: SWOT Analysis of Road Contractors in Nepal Strengths Weaknesses There are around 10+ local No experience of HAM type contractors having experience of models and limited experience of executing road works of NRs 1 billion Design & Build as well as large and above. For contracts of above NRs value contracts. None of 2 billion, 5-6 contractors are eligible, contractors have done PPP in and market also has seen participation road projects involving their from mainly Chinese and Indian financing commitment for the contractors. project. 21 Strengths Weaknesses Opportunities Threats Nepal has large number of road Availability of construction development projects in pipeline with material, especially aggregates. the developing economy status. Contractors spreading their resources among many Contracts thus likelihood of delays in completion. (B) Financial Institutions (Commercial Banks) Country has presence of government owned Local Banks and many private banks. There are few specialised banks such as Nepal Infrastructure Bank with primary focus on infrastructure sector. Most of the banks have experience of project finance lending to hydro power sector and tourism sector. However, in such projects, they retain charge of cash flows as well as project assets. So far, maximum term loan lending by the consortium of local banks was about US$ 20 million based on discussion during consultative workshop. With respect to road sector, banks have experience in working capital finance only. Given the current practice of secured lending, banks would not be comfortable for financing roads under HAM model due to lack of physical assets as collaterals. Central Bank of Nepal may need to introduce regulations/ Guidelines specific for sector to enable financing based of project cash flows for HAM projects so as the loans can be termed as secured loans. The ongoing study for feasibility of HAM model will consider this aspect as well. In additional to collaterals requirement, there are two type of major risks which may affect ability of banks to lend to the sector  Contractor’s performance risk (especially for operations & maintenance for 6-8 years, during which annuity payment is linked to achievement of key performance indicators)  Government payment risk (i.e. for grant during construction and annuity in timely manner) The above contractor risks can be mitigated by way of incorporating such qualification criteria in the RfP document which would enable the selection of technically and financially capable road sector developer. As regards Government Risks, there are relatively less chances for payment delays in the donor funded projects due to sufficient budget allocation. 22 Based on discussion with commercial banks, it was observed that they are keen to explore HAM type new contracting approach (Refer to Annex-I). Since this is new financing model for banks as well, they would need to enhance capability through exposure to their counterparts in India and elsewhere having experience of financing HAM projects. Therefore, it is proposed to have exposure visit to India and other countries for contractors, bankers and officials of DoR. With the World Bank initiation, DoR officials have an exposer visit to India in 2022 AD. A detailed market analysis will be done during the feasibility study of applying new approach including HAM/Design Build. Table 5: SWOT Analysis of Banks in Nepal Strengths Weaknesses Strong loan recovery laws in Lack of physical assets as collaterals for favour of banks, experience in HAM Road projects. Lack of PPP projects infrastructure project finance for in road sector. Hydro Power sector. Opportunities Threats There are number of financing Lack of adequate local players with opportunities in PPP model in strong financial strengths. infrastructure sector, as the Contractors’ inability to complete many sector grows. projects in time. Delays in dispute resolution, so delay in receiving the award amount. There is nothing mentioned in the monetary policy of Central Bank to enable project financing to infrastructure sector with project cash flows as security. 2.3.2. Procurement trends Recently JICA and ADB have funded large value road construction contracts on traditions as well as slightly modified contracting approaches. Nepal has limited local contractors (about 6 to 7) having experience of road projects of about US$ 20 mn or so. Recent large value tenders supported by JICA and ADB saw large number of participations from Chinese contractors, Indians and few local contractors in JV with International contractors. ADB has financed two contracts recently on Item Rate with 5 years of Performance based Maintenance including 1-year of DLP period and is currently in the process of awarding two more contracts on similar model. ADB is more 23 active in road sector, and with recent experience, is now following stringent qualification criteria, especially with respect to financial criteria. The experience of ADB funded projects suggest that bidders/ investors in other countries are interested to bid for large value projects in Nepal. In many of the large value contracts, it was found that the foreign bidder is not interested in carrying out on ground mobilization and has given the whole work to local contractors. This aspect would be taken up appropriately in this project. Experience shows that domestic contractors are not qualified for contracts in the range of US$ 20 to 40 million and foreign contractors are not interested in such low value contracts. To address this issue, slicing and packaging arrangement will be designed in such a way that the contract packages are large enough to attract foreign bidders and at the same time Nepali bidders can also meet 25% of the capacity to participate as a JV partner with the foreign bidders. And, qualification criteria will be set accordingly. Small value contracts market is relatively crowded with 15+ bidders with ability to carry out NRs 750 million worth contracts. For large value contracts, one of the main restricting criteria for local bidders is the project experience which is typically set as 80% of the project value and construction turnover. The following chart prepared from analysis of about 52 road contracts awarded in past 5 years shows no. of participating bidders is relatively skewed for projects with size up to US$ 25 million, with most of these bidders being local contractors. 24 Figure 1: Analysis of recent road contracts (value of works vs. no. of participating bidders) 2.3.3. Supply Positioning Moving goods and people within the borders of Nepal is a complex endeavour mainly because of its unique topography. Consequently, providing transport connectivity is a challenging and high cost endeavour, with the added increase in vulnerability to climate risks like floods and landslides. Within Nepal’s transport system, the Strategic Road Network (SRN) is the backbone for the physical and economic integration of the country and with its neighbours. The project includes mainly construction of identified roads under SRN. Supply positioning for the project includes the key procurement activities as below: Table 6: Supply Positioning High Strategic Security Strategic Critical Risk or Vulnerability (a) Transaction Advisors Road Construction and O&M (b) Independent Engineers Tactical Acquisition Tactical Advantage Low Training / Capacity Building of DoR Low High Cost Since the cost of Road Construction is higher and the risks associated with that is also high, that is placed under Strategic Critical box above which means that work contract for road construction is critical for DOR. It is believed that transaction advisor and independent engineers’ contract would be of Strategic Security because the cost would be lower, but the impact of those works is expected to be high. On the other hand, training and capacity building related contract would be considered as Tactical Acquisition because the cost and risks associated with that contract are expected to be low. 25 2.3.4. Supplier Preferencing In order to assess the supplier preference, 2X2 matrix has been prepared with one dimension as value of business to the supplier and another dimension as overall attractiveness of the business to the supplier. Considering the size of proposed contract, it is felt that contract size would result in high value of business to the supplier. It is also believed that a supplier would find DOR to be attractive for the business due to following: • In-country security • Stable government • Provides scope/ opportunities to manage risks • Support from World Bank • Opportunities for additional business This can further be observed from recent past response to tenders floated by DOR as shown in Figure 1: Analysis of recent road contracts (value of works vs. no. of participating bidders) Figure 1 and Error! Reference source not found. above. Therefore, a supplier would rate the attractiveness of business as “High”. Further value of business for road construction is “High” while transaction advisory services and related consultancy projects is estimated to be relatively “Low”. As a result, the supplier is likely to view these opportunities as “CORE” and “DEVELOPMENT” respectively. Also, for high value opportunities of road construction projects, high proportion of government contribution during construction (60-70% in case of HAM model) would add to the attractiveness of the project which is believed to be positioned as CORE supplier preference. Table 7: Supplier Preferencing Attractive Low High Development Account Core of Consultants for Transaction Advisory Road construction work Institutional Strengthening 26 Nuisance Exploitable Low High Relative value of Account Further, since the suppliers is expected to finance part of project costs, which will be recovered during O&M as annuity payment, suppliers and DOR both shall be locked-in to a long term contract (2 to 3 years of construction period (road upgrading) plus 6 to 8 years of O&M) which will enable a strategic alliance approach between the two, ensure high level of service, timely & effective response, increase profitability and build capability of the supplier. The new contracting method shall ensure supplier to deliver good quality roads in time and reliable availability of roads during O&M phase. This shall further open more opportunities for suppliers in similar and other PPP models in Nepal’s road sector in future. 2.3.5. Analysis and Action Based on market research (contracting data from ADB and JICA financed projects in Nepal, DOR data on contracting based on traditional item rate contracts, and consultation with the industry through interaction programs as discussed earlier), the following procurement approach/ options could be adopted:  Nagdhunga-Naubise-Mugling (NNM) Road NMM road passes through hilly terrain and is more prone to landslides. The project is a 96 km on the pivotal north-south trade corridor connecting Kathmandu to Birgunj and rest of the country. This road serves as the lifeline for capital city Kathmandu. This road lies in hilly geographic territory which makes difficult to predict the design and cost estimate to bidder. Considering these facts DoR feels high risk to go for new contracting approach like HAM for this road. So traditional item rate contract is suitable for this road. To keep it attractive for international bidders to participate at the same time to allow local bidder to participate as JV partner, project can be bundled into 3 packages on traditional method (Item Rate).  Kamala-Dhalkebar-Patalaiya (KDP) Road KDP road (130 Km), on the other hand, is part of the East-West Highway, the longest highway in Nepal running across Terai (low/ plain land region that lies south of the outer foothills of the Himalayas). The traffic volumes along the different segments of the East-West Highway vary significantly, from a low of ~4,000 PCUs to a high of ~18,000 PCUs (2016-17 survey). 27 Since the project is in plain terrain with secured right of way available with the DOR, it is felt by the industry that a section of this stretch (Bagmati – Pathalaiya, 53 Km) can be considered for new contracting method as a pilot project and remaining 77 Km Kamala – Bagmati section is considered as item rate contract. (A) Comparison of Item Rate and Hybrid Annuity Model (New Contracting Method) contracts Table 8: Comparison of Item Rate Contract and New Contracting Method (HAM) Key Risks Item Rate Contract New Contracting Approach (HAM) I. Development Period Risks 1. Statutory clearances Government Government (Environmental Protection and Conservation of Site) 2. Availability of Land free from Government Government encumbrances (Land acquisition, encroachments, utility shifting and R&R) 3. Financing and financial closure Government 60-70% to be funded by Government and balance to be financed by Private II. Construction Period Risks 5. Design risk Government Private 6. Quantity and price variation Government Private 7. Quality Government Private 8. Local permits / clearances Government Government 9. Delays Government Private 10. EPC risks Private Private 11. Completion risks Government Private (Government design approvals, tests, completion certificates, 28 Key Risks Item Rate Contract New Contracting Approach (HAM) other procedural issues) III. Operation Period Risks 12. Traffic and revenue risks Government Government 13. Operating risks Government Private 14. Maintenance risks Government Private 15. Cost overruns Government Private 16. Road availability Government Private 17. Quality of service Government Private 18. Road safety Government Private IV. Project Life Cycle Risks 22. Regulatory risks Government Government / Private 23. Legal risks Government Government 24. Commercial / Financial risks Government Private 25. Debt repayment Government Private 26. Force Majeure Events Government Government / Private 27. Termination NA Private The option of traditional small, item-rate contracts was considered and eschewed in view of the following limitations: a. Prone to time and cost overruns b. Lack of incentives for pursuit of efficiency’ c. Numerous small contracts are not amenable for harnessing economies of size, scope and technologies and are prone to administrative complexity and burden d. Lack of provision for maintenance The Government is keen to adopt contracting approaches that address the above limitations and deliver better Value-for-Money (VFM) for the government. Hence, the focus on identifying contracting models that club construction and maintenance, provide stronger incentives for efficiency and optimization of life-cycle costs, shift the 29 focus from construction to provision of better road service, and harness private sector efficiencies and, if possible, financing as well. As part of this, the Hybrid/Modified Annuity Model (HAM/MAM) was considered a possible option in keeping with its track record in addressing the aforementioned limitations, and its amenability for introducing private sector participation in a context where user-fee or toll-based PPPs are not a feasible option. At the same time, since the model is new to Nepal, market sounding, and analysis has been carried out which revealed that the need for (a) more intensive assessment of private players interest and appetite to follow this model in the Nepal context and (b) additional upstream work need to create an enabling policy and regulatory environment. Also, the market feedback indicated that the potential bidders are less interested in use of this model in the case of NNM road, in view of the complexity underpinning its design. Hence, it has been decided to: a. Adopt in the case of NNM road and section of KDB road, the item-rate contract with the provision for including 5-year Maintenance Period including 1 year Defect Liability Period, a model recently being adopted in other contracts of similar size in ADB-funded project(s). b. Use Design and Build contracting approach for the construction of two major bridges (Kamala and Bagmati) in KDB road section. c. Continue the market assessment to ascertain the adoption of HAM model of contracting in Bagmati – Pathalaiya section of KDP road through Transaction Advisory, and pilot HAM contracting approach. If found not feasible or successful, this section will adopt either Design and Build or item-rate contract with the provision for including 5-year Maintenance Period including 1 year Defect Liability Period. (B) Market Engagement Plan • In line with the ongoing market study on feasibility of new contracting model, the DoR will prepare a detailed draft concession agreement for HAM type contracts / Design Build type contracts with the assistance of Bank and transaction advisory (Consultant). This draft concession agreement will be shared for wider industry consultation for HAM and Design Build type contracts. The mode of market engagement plan would be road shows, market conference, contractors’ consultation, communication with potential bidders, informative publications, etc to name a few. (C) Conclusions on the Market Analysis: • Key points can be categorised under the following heads: o Policy Related o Contractors Related o Bankers Related Table 9: Conclusion by category wise intervention Policy Related Contractors Related Bankers Related Central Bank of Nepal Local contractors would Banks have concern that should look at allowing not be able to develop they would not have 30 Policy Related Contractors Related Bankers Related banks to treat loan to road under PPP Contract. charge on physical asset HAM project as secured International Players and therefore the loan one on the basis of need to take lead but in could be treated as charge on cash flow. JV with local contractors. unsecured loan which That would result in That would help build would result in higher lesser provisioning capacity of local players. provisioning and interest requirement for banks rate which could be and economical interest detrimental to the sector. rate. Local players don’t have design capacity, but they are keen to take this risk Banks are keen to play FDI in road project as a part of PPP. active role in financing should be under the HAM projects. automatic approval Banks are not ready to which would help They are capable to finance without foreign investors handle utility shifting as collateral. However, they long as that expense is would be comfortable if reimbursed project achieves 40-50% of progress which would A program would be demand the restructuring initiated for enhancing of construction support the knowledge of fund/ grant. However, contractors in PPP DOR would discuss this domain. DOR would work further with some banks. with World Bank in this regard. One possible Bankers’ knowledge on option could be that road PPP need to be contractors’ association enhanced. Banks can visit India and other visit India and other countries and see some countries to meet PPP road projects. They bankers to understand can also meet National their experience in PPP in Highway Authority of road sector. India (NHAI) • Project size should be large enough to be able to attract international bidders to participate – Each package of having estimated contract value of US$70-80 million which can enable enough size to enable international bidders to participate while enabling local contractors to participate as well. • Local contractors’ capability to be enhanced for such projects. Appropriate provisions would be incorporated in bidding document to enable the 31 participation of local contractors but at the same time, scope for compromise in quality of delivery would be minimised. Here, it is noteworthy that, regardless of the type of contract modalities, the size of contracts is likely to be in the range of US$60-110 million in order to optimize economies of scale and minimize the transaction cost for the implementing agency of managing numerous contracts. Hence, given the size of these contract packages, the prospective bidders are likely to be mainly from foreign countries, as was seen in the case of recent procurements of similar sized contracts in the works financed by ADB. In such a scenario, Nepali contractors can still participate as JV partner in contracts sizes up to US$110 million, wherein they could meet the minimum average annual turnover requirement of up to USD20 million. The primary (foreign) contractor too may benefit from such a partnership as the Nepali JV partner could be helpful in dealing with local conditions during bidding and contract implementation. Through this arrangement, it is expected that Nepali contractors can also participate in the bidding and can learn from the primary contractors in managing large contracts. Further, considering the difficult economic situation evolved globally due to the recent outbreak of COVID-19, engaging local players in contracts has become even more relevant. (D) Proposed Packaging for various contracts The Packaging approach followed by other bank financed project is discussed in market analysis section. The key inferences with respect to packaging approach is proposed as follows: a) By value of contract: o Each package of having estimated contract value of US$ 60-110 million: Sufficient size to attract international bidders to participate while enabling local contractors to get opportunity to participate as joint venture. b) By contracting approach: o Traditional contracting approach (i.e.) Item Rate Contract with 5-year of Performance based Maintenance period including 1-yearof DLP period for NNM road and KDB section. o Exploring the possibility of adopting Hybrid Annuity Model (HAM) with 6 to 8 years of O&M or Design & Build model with 5 years DLP for Bagmati- Pathlaiya section of KDP road. This is under consideration as an option given its potential to harness private sector efficiencies and financing and the strong intent of the Government to adopt better contracting approach. Even so, to avoid the risks of trial and error, the final decision on adoption of this model will be based on the determination of its feasibility through the ongoing market study and due diligence through Transaction Advisory. 32 o Design and Build contract with 5 years operation and maintenance for 2 major bridges: Kamala and Bagmati of KDP road. To enable participation of local bidders, appropriate provisions to be incorporated in bidding document in consultation with bank based on the type of contract and value of contract. Further, to ensure active participation of international bidders on ground, tender document can mandate each member of the consortium to submit statement of work share and proportionate performance security. Proposed packaging approach for identified various contracts would be as follows: Table 10: Proposed Packaging Approach Sr. Activity Packaging Strategy Method of Special No procurement methods of procurement 1 Road Bidding Documents as International Contracts per the discussion with Competitive Bidding World Bank: (ICB) for both road (i) World Bank’s SPDs stretches: for Item rate (i) Item Rate contract contracts with PQ, for NNM Road with PQ International /open competition/ most advantageous bid. ii) Item Rate contract (ii) World Bank’s for Kamala- SPDs for Dhalkebar-Bagmati Item rate section (KDB) without contracts PQ without International /open PQ. competition/ most advantageous bid. (iii)HAM Procurement (iii) New Contracting Documents to the Method (HAM) will be satisfaction of the adopted for Bagmati- World Bank Pathlaiya section of KDP Road, if HAM is determined to be feasible. If found not feasible, this section will adopt either Design and Build or item-rate contract with the provision for including 5- year Maintenance Period (iv) World Bank’s including 1 year Defect 33 Sr. Activity Packaging Strategy Method of Special No procurement methods of procurement SPD (RFP) Liability Period. for Design and Build (iv) Design and Build contracts for two Bridges (Kamala and Bagmati) in Kamala- Bagmati section of KDP road through open international competition; most advantageous bid. 2 Various World Bank standard QCBS/ QBS/CQS/ IND Consultancie Procurement documents s for consulting services 3 Training Training Calendars for Operating Expenses/ Procurement and Non-Consulting Services Certifications are to be approved for nature and duration of each training and participant details (D) Proposed Roads Packages (A) NMM Road: Table 11: Proposed Contract Packages for NMM Road Contract NR , US$ Package Name Method No. Million Million Item Rate + 5-year Maintenance Period SRCTIP- Nagdhunga including one year DOR-W- 2500 20 Naubise Defect Liability 1 NNM-ICB-1 Period (DLP) contract. SRCTIP- Ditto Naubise DOR-W- 10260 84 Malekhu NNM-ICB-2 SRCTIP- Ditto Malekhu 3 DOR-W- 8812 72 Mugling NNM-ICB-3 (B) KDP Road: 34 Table 12: Proposed Contract Packages for KDP Road Sl US$ Contracts Name NR Crores Method No Million If HAM is determined to be feasible for Nepal as mentioned in earlier sections, HAM + 6-8 years O&M will be contract adopted. Bagmati- Pathlaiya section size of If HAM is not Estimated 1 feasible, this 1 (53 km) of Kamala 100 Contract section will adopt – Dhalkebar – to120 Pathlaiya Road million either Design and Build or Item Rate + 5-year Maintenance Period including one year Defect Liability Period (DLP) contract. Item Rate + 5- SRCTIP- year Maintenance DOR-W- Kamala- Bagmati Period including 2 KDP-ICB-4 section of KDP 250 one year Defect (Lots 1, 2 road (77 km) and 3) Liability Period (DLP) contract. One Design and Build Kamala and using Bank’s SPD Contract 3 Bagmati bridges 40 (Lots 1 (RFP) for Design in KDP road and 2) and Build. For Bagmati-Pathalaiya road section, HAM would be a preferred method of procurement, if found feasible through current market sounding and feasibility study through Transaction Advisory, but alternatively Design and Build or Item Rate + 5- year Maintenance Period including one year Defect Liability Period (DLP) contract will be adopted. 3. Procurement Risk Analysis From the above analysis, it can be seen that the risk in procurement is unavoidable. This section includes the analysis and the priority order of solving potential foreseen risks as described in section 3, from the following aspects: 35 operational context, market research and assessing capability of implementing agencies. The following table uses 4-points scale (very high risk- 5, high risk – 4, substantial – 3, Moderate – 2 and Low -1). 36 Table 13: Procurement Risk Analysis No. Risk Description Likelihoo Impact Overa Mitigation Measure Risk Owner Procurement d Rating Rating ll Risk Process Stage (A) (B) (A*B) 1. Governance Aspects • Establish 1.1 Corruption and collusion 2 4 8 Implementing Procurement effective the complaint management system Agency Lifecycle • Internal and external audits • Technical audits through PMC / Independent Engineers • Disclosure of information • Proper monitoring and control by the upper management. • Additional due diligence when red flags of collusion/ corruption are suspected. • Engage Procurement Evaluation Panel consisting of international procurement and sector experts • DoR to follow the 1.2 Difference in Government’s 2 1 2 Implementing Planning procurement process of procurement policy and Bank World Bank Procurement Agency procurement framework Regulations for IPF Borrowers. • For contracts 37 No. Risk Description Likelihoo Impact Overa Mitigation Measure Risk Owner Procurement d Rating Rating ll Risk Process Stage (A) (B) (A*B) subject to National Procurement Procedures, as defined in procurement plan, national procurement documents with caveats defined in this PPSD may be used. • Engage Procurement Support Consultant / Transaction Advisor 2. Economic Aspects • Price variation 2.1 Impact of unpredictable 2 2 4 Implementing Procurement clause has been incorporated inflation Agency (Item Lifecycle for all Item Rate contracts. Rate Contract) • Price variation is Shared – largely in the scope of Implementing bidders in case of HAM Agency & contracts, with limited Contractors inflation risk retained by DoR (HAM/ Design Built contracts) 3. Sustainability Aspects • Qualification 3.1 Capability of contractor to 2 2 4 Implementing Procurement criteria during pre- deliver the project qualification stage would be Agency Lifecycle determined in such a way that only capable bidders (technical and financially capable) with good experience are prequalified for the next stage to bid for 38 No. Risk Description Likelihoo Impact Overa Mitigation Measure Risk Owner Procurement d Rating Rating ll Risk Process Stage (A) (B) (A*B) the contract. • Detailed measurable KPIs would be prepared to monitor the performance of contractor • Termination 3.2 Private Party walking away 2 2 4 Implementing Procurement clause would be prepared from the contract before the after careful examination of Agency Lifecycle end of full O&M term clauses in another similar contract. • Termination payment in case of non- performance by private party should balance the guarantees requirements to lenders and represent a big enough penalty to deter private party to walk away from contract before its term. • Provision in the 3.1 Operation and Maintenance of 2 3 6 Contractors Planning Contract Agreement Assets created under the regarding O&M of the assets O&M Stage project with the contractors • O&M / Annuity Payment linked to key performance indicators incl. road lane availability. • Strengthening of capacity regarding O&M of the assets particularly for technically innovation 4. Client Capacity 4.1 Adequacy in number of 2 3 6 • Adequate Implementing Planning Technical and procurement Technical Capability Agency 39 No. Risk Description Likelihoo Impact Overa Mitigation Measure Risk Owner Procurement d Rating Rating ll Risk Process Stage (A) (B) (A*B) staff especially for Item Rate Type Contracts. • Certification in Procurement will be required. • Need to enhance technical expertise for HAM type contracts, through training and external consultancy support. 4.2 Exposure to World Bank 1 1 1 • Implementing Implementing Planning procedures Agency has experience of Agency Bank financed projects. Advance Procurement Training will be required. • Project 4.3 Contract management capacity 2 3 6 Implementing Planning Management Consultant can be used. Agency • Set-up internal contract management teams for large contracts • Training on Advanced Contract Management to the staff 4.4 Complaint Management 2 3 6 • Set-up internal Implementing Planning System systems as well as link on Agency website to receive and resolve complaints in line with applicable Procurement Framework. 40 No. Risk Description Likelihoo Impact Overa Mitigation Measure Risk Owner Procurement d Rating Rating ll Risk Process Stage (A) (B) (A*B) 5. Market Analysis • Provide adequate 5.1 Supply Positioning 2 3 6 Implementing Planning publicity, slicing and (With Large number of similar packaging of the works to Agency works in the country, the maximize the interest of bidder’s participation may be a bidders. threat). • Carefully designing bidding document and qualification requirements for such packages • Conduct bidders meet to understand their concerns and suggestions 5.2 Joint Venture related issues 2 2 4 • This challenge Implementing Planning covered in Procurement Trend has been properly addressed Agency in WB SPD. Both the party to execute a Joint Venture Agreement in the event of a successful bid shall be signed by all partners and submitted with the bid together with a copy of the proposed Agreement, clearly indicating the objectives of the joint venture, the proposed management structure, the contribution of each participant to the joint venture operations, the commitment of the 41 No. Risk Description Likelihoo Impact Overa Mitigation Measure Risk Owner Procurement d Rating Rating ll Risk Process Stage (A) (B) (A*B) participants to joint and several liability for performance of the contract, recourse or sanctions within the joint venture in the event of default or withdrawal of any participant, and arrangements for providing the required indemnities. 42 4. Stakeholders’ Analysis Table 14: Stakeholder's Analysis Stakeholder Interest Stakeholders’ Objectives from the Procurement Stakeholder Management Approach Department of Responsible • Selecting capable and qualified contractors / suppliers who are able to • Keep Close Road complete the contracts in timely manner within reasonable cost. • Enhancing efficiency of use of World Bank as well as counterpart funding • Promoting wide publicity and better competition • Capacity building of the Department for new contracting approaches • Evolve industry for public private partnership and new contracting methods Contractors Responsibl • Fair chances for winning a Contract. • Keep e, • Appropriate handling of complaints. Informed Consulted, Informed Commercial Responsibl • Adequate security / collaterals • Keep Banks e, Informed • Appropriate recovery mechanism from financing of projects under Consulted, new contracting methods Informed • Ensuring that funds are used for intended purpose with due care for World Bank Accountable • Keep Close economy and efficiency. (to its • Project development objectives are achieved in timely manner. shareholders) • Procurement processes are transparent and fair opportunity is provided to all the parties • Citizen involvement during identification and implementation of Beneficiaries / Consulted, • Keep project 43 Citizens Informed • To be actively consulted during project implementation Informed • Getting timely information Civil Society / Informed • Keep • No fraud and corruption Social Media Informed 44 5. Procurement Objective • To achieve the PDO together with Value for Money (VFM) by way of bringing competitiveness in the participation. • To operationalize the assets developed for the benefit of the communities. • To ensure timely selection of contractors. • To ensure quality of works. • To achieve good practices for O&M, service standards for maintenance of schedules along with efficient management of technical and financial aspects of O&M. • To ensure efficient contract management as per terms and conditions in responsive manner. • To demonstrate high transparency with no scope for dispute. • To enhance capability of DoR Staff in advance Procurement by training and certification. Procurement Result Indicators • Selection of Consultants: Should not take more than 270days for competitive selection. • Procurement of Works / Goods / Non-Consulting Services: Time from opening of bids to award of contracts should not take more than the bid validity period in normal condition. Verification of records may take some time. Recommended Procurement Approach for the project • This Project is likely to have about 7-9 procurement packages for works and three consulting services with cumulative value of US$ 600 Million for Project Component-2 (IBRD and GoN) • Overall Procurement Risk for the Project: Overall risk is substantial. • Contract Approach Table 15: Proposed Contract Approach S. Attribute Selected Approach Justification No . 1 Requirement 1.1 Specification Both Conformance (for In HAM / DB/ OPBRC . traditional approach) & contract, design quality & 45 S. Attribute Selected Approach Justification No . Performance (new quantity risk as well as O&M contracting approach) performance risk is with the contractors. In traditional approach, these risks are with the Implementing Agency. 1.2 Sustainability Yes Government’s . Requirement Environmental act and Regulation, Department’s ESMF and Bank’s guidelines to be followed. 2. Contract Strategy 2.1 Contract Type A. Item Rate + 5-year Traditional approach is . Maintenance Period recommended for NNM road including one year and KDB section of KDP Defect Liability Period road. For Bagmati- Pathlaiya (DLP) contract. stretch of KDP road, B. Hybrid Annuity Model possibility of new (HAM) with 6-8 years contracting approach (HAM) of O&M. is proposed is the ongoing C. Design and Build study supports this. contract with 5 years For bridges, DoR have a of O&M. good experience of Design and Build contract which is found economical, less dispute and timely completion. So, major bridge at Kamala and Bagmati rivers will adopt Design and Build contract. 2.2 Pricing & Costing A. Item Rate in case of . Mechanism Traditional contract B. Semi-Annual / Quarterly Annuity Payment in case of HAM contract. Grant during construction 46 S. Attribute Selected Approach Justification No . shall be fixed as per estimated project cost. C. Instalment based on schedule of price in case of Design and Build contract. 2.3 Selection of Cost Traditional approach- all Value for Money Analysis: . and Price risks are with the For Bagmati – Pathlaiya Mechanism Implementing Agency. Road stretch of the KDP road section, if the HAM doesn’t In case of HAM – Design, meet the VfM criteria, there Quality & Quantity risk as would not be much time lost well as financing (other to initiate bidding adopting than Grant) & O&M risks Item Rate or D&B are with the contractors. contracting approach. In case of bids received Considering this, DOR has failed to meet the Value prepared DPR for the entire for Money (VfM) criteria, KDP Road section (130 km) the Implementing including for the stretch Agency shall undertake proposed for HAM approach. the contract under DOR intends to use the traditional approach as generally accepted VfM mentioned above. approach wherein cost Value for Money analysis under Public Sector would be made part of Comparator would be Transaction Advisor’s compared with cost of PPP scope of work. and accordingly VfM would In case of D&B contract – be calculated. Procurement Design, Quality & features such as efficiency, Quantity risk and transparency, and fairness operation and etc., would also be ensured. maintenance (for 5 It may be mentioned that years) risk are with the Govt capability with respect Contractor. to PPP is currently limited, but Govt would require the expertise of relevant professionals/ experts to 47 S. Attribute Selected Approach Justification No . successfully implement the project under HAM and develop capacity of the Govt. 2.4 Supplier Collaborative Strategically critical roads . Relationship and new contracting method for industry requires collaborative approach 2.5 Price Adjustments (i) Applicable for Price increase is not in . Item rate control of contractor and contracts for should be provided risk contract duration mitigation measures in the above 18 months; contract. (ii) Fixed Price / Negotiated price basis Value for Money analysis. (ii) Applicable for D&B contract 2.6 Form of Contract In case of HAM/ design There should be value for . (Terms and Build, the Agency reserve money to government Conditions) the right to award contract under traditional 48 S. Attribute Selected Approach Justification No . approach following re- bidding procedures, if bids received fails the test of Value for Money. 3. Selection Method 3.1 Selection Method Request for Proposal That helps in better . (RFP), Invitation for Bids selection of contractor and consultant. 3.2 Selection International, Open This is expected to provide . Arrangement Competition value for money and the bid should be substantially responsive Most Advantageous bid for Goods, Works and Non-consulting services/ Highest ranked firm in the combined technical and financial proposals for Consulting Services 3.3 Market Approach Open Competition . That will help attract an National open approach international player which for contract value up to may provide better value for US$ 5million money. Pre-qualification And procedures will be adopted International open for high value works approach for contract contracts. value above US$ 5million 3.4 Qualification Request for Bids (after This would help . Pre-qualification, in the prequalification of case of NNM Road, and capable bidders. without pre-qualification (post-qualification) for other contracts) will be adopted. Qualification 49 S. Attribute Selected Approach Justification No . requirements will be set in line with the Evaluation and Qualification Criteria set out in the Bank’s SPDs. Technical Capacity of the bidders would be assessed based on similar type of work executed. Financial capacity of the bidder would also be assessed based on project cost to be financed by the private sector in the case of HAM model 4. Evaluation Methods 4.1 Evaluation Substantial Responsive Standard evaluation . Selection Method Most Advantageous bid approach i.e. Substantial Based Selection subject Responsive Most to meeting VfM test Advantageous bids. (especially in case of HAM contracts) 4.2 Evaluation of Life-cycle costs for HAM Minimisation of lifecycle cost . Costs is important 4.3 Domestic Domestic preference Need international . Preference would be provided for experience as well. International Competitive Technology transfer to local Bidding for contract industry. value above US$ 5million. Domestic preference was used initially for NNM road contracts. However, domestic preference is 50 S. Attribute Selected Approach Justification No . not applicable for other contracts. 4.4 Criteria Technical Criteria would Criteria would help to identify the Qualified . have Pass/Fail system bidders. which would help prequalify the Qualified bidders based on their experience, turnover, equipment, and Manpower. Procurement Evaluation Panel (PEP) with two international experts in the sector and procurement would be engaged for independent evaluation of bids, especially for NNM road. In case of contracts using HAM approach, Transaction Advisor would be selected for advising DOR and their scope would be to advise DOR in selecting the qualified bidders. . 4.5 Contract DoR has sufficient To get the delivery of . Management experience in the project as envisaged and Approach Contract management of also to get Value of Money. Unit Rate contracts. Success of HAM/DB project would depend on robust Contract Management by DOR. Since the experience of DOR is limited in PPP, Advisory support would be required in this respect. The objective of 51 S. Attribute Selected Approach Justification No . contract management would be to enable the concessionaire to complete the scope efficiently at the same time enforce the penal provisions if work is not performed as per the provisions of contract. Technology would be adopted to manage the contract efficiently and advisor would help DOR in this regard. 4.6 Key Performance Key performance KPI would help DOR . Indicators (KPIs) – indicators would be measure the performance Measures included as a schedule to and pay to concessionaire the contract and would according to its performance largely cover the following: Identification of defects. Rectification of Defects Defects Rectification period 52 6. Summary of PPSD to support the preparation of PAD by the Bank (This chapter is kept unchanged as it is in original PPSD Document) The project development objective (PDO) is to assist Government of Nepal through Department of Roads (DoR) to improve transport efficiency on selected project corridors and strengthen institutional capacity to improve connectivity and facilitate trade. Procurement Strategy : Based on details presented in the PPSD • Nepal, officially the Federal Democratic Republic of Nepal, is a landlocked country in South Asia, and surrounded by China in North and India in south, east and west. It has a stable democratic government and its economy growth averaged 4.7 percent (at market prices) over 2008-18 and in the recent past two years over 6.5%. • DoR has been seeking contracting approaches that deliver better value-for- money for the Government while harnessing the potential of private sector efficiency as compared to conventional Item Rate contract. As per assessment and criticality, NMM road is proposed to be carried out on conventional approach with one year DLP and 4 year Maintenance while KDP road to be assessed for new contracting approach (HAM) with 6-8 years of O&M or Design and Built with 5 years of O&M including 1 year of DLP, subject to Value -for-Money for the government. • Nepal’s road sector has seen large value contracts and participation of selected domestic and foreign contractors for strategically important road stretches supported with bank finance. Analysis of recent contract awards suggest that project size of about US$ 60 – 110 million can attract enough competition comprising mix contractors as well as provide value for money. • DoR (or any agency in GoN) has not carried out any contracts on proposed new contracting method of Hybrid Annuity Model (HAM) and design build in road sector. Therefore, training, certification, like CIPS and capacity building program would continue to be required to strengthen their capabilities. • DoR need to undertake more market engagements to market the new contracting approach and provide confidence to the potential domestic contractors as well as banks who shall be participating as financiers. Based on detailed project condition and market assessment including experience and capacity of the client, this PPSD recommends the following procurement approaches and strategy • NMM Road: Item Rate contract approach with prequalification is proposed with 5 years of Performance based Maintenance period including 1 year of DLP period. The market approach would be open international market approach, prequalification, RFB selection method with Most Advantageous Bid/Substantially responsive lowest evaluated bid is recommended. • KDP Road: New contract approach of HAM with 6-8 years of O&M period or Design and Build mode with 5 years of O&M will be explored if the ongoing study/ due diligence determines that this model (HAM) is feasible for Nepal. 53 Otherwise, traditional contracting approach as for NNM road will be adopted. The market approach would be open international market approach, pre- qualification, RFB selection method with Most Advantageous /Value for Money Selection is recommended. • Selection of Consultants for Procurement and Firm for Supervision Work: Competitive selection methods through request for EoI followed by RFP are recommended. Supervision work for construction and Performance based maintenace work are basically time based contracts and the selection, in general, will follow Quality and Cost Based Selection (QCBS) method through open international market approach using request for EoI. While the project procurement risk is “Substantial”, risk mitigation strategy and procurement approach will help reduce the procurement risks to a large extent. 7. RECOMMENDED PROCUREMENT APPROACH FOR THE PROJECT 7.1 The Bank’s Procurement Process: Bank’s Regulations for IPF Borrowers, July 2016 (Revised November 2017 and August 2018) and the provisions stipulated in the Financing Agreement will be applicable for procurement of Goods, Works, Non- Consulting and Consulting Services. The PCU within the DCID in the DoR and PCU within MoCIS will be responsible for overall procurement management of their respective components under the Project. Procurement of goods, works, consulting and non-consulting services, may be carried out using international and /or national procurement procedures. 7.2 National Procurement Arrangements: In accordance with paragraph 5.3 of the Bank’s Procurement Regulations, when approaching the national market (as specified in the Procurement Plan tables in STEP), the Country’s own procurement procedures may be used with applicable caveats as follows: National Procurement Procedures: These procedures are applicable for the procurement of goods, works and non-consulting services only. In accordance with paragraph 5.3 of the Bank’s Procurement Regulations, when approaching the national market, as agreed in the Procurement Plan tables in STEP, the country’s own procurement procedures may be used. When the Borrower uses its own national open competitive procurement arrangements as set forth in Nepal’s Public Procurement Act, 2007, as amended by Amendment 2073 (2016) – (1st Amendment) and the Public Procurement Regulation, 2007, as amended by Amendment 2076 (2019) – (9th Amendment), such arrangements shall be subject to paragraph 5.4 of the Bank’s Procurement Regulations and the following conditions: 1) Model bidding documents, including contract conditions agreed with the Bank (as amended from time to time), shall be used. Bidding documents shall be made available, by mail or in person, or through e-GP portal to all who are willing to pay the required fee. 54 2) The eligibility of bidders shall be as defined under Section III of the Procurement Regulations. Accordingly, no bidder or potential bidder shall be declared ineligible for contracts financed by the Bank for reasons other than those provided in Section III of the Procurement Regulations. 3) The request for bids/request for proposals document shall require that Bidders/Proposers submitting Bids/Proposals present a signed acceptance (in the form attached) at the time of bidding, to be incorporated in any resulting contracts, confirming application of, and compliance with, the Bank’s Anti-Corruption Guidelines, including without limitation the Bank’s right to sanction and the Bank’s inspection and audit rights. 4) Qualification criteria (in case pre-qualifications were not carried out) shall be stated in the bidding documents for all contracts, irrespective of the value, and if a registration process is required, a foreign firm declared as the lowest evaluated bidder shall be given a reasonable opportunity to register, without let or hindrance. 5) Procurement Documents include provisions, as agreed with the Bank, intended to adequately mitigate against environmental, social (including sexual exploitation and abuse and gender-based violence), health and safety (“ESHS”) risks and impacts. 6) Performance security should be an amount of five (5) to ten (10) percent of the contract price and shall not be increased merely based on comparison of the bid price of awarded bidders with the pre-bid cost estimate. 7) If a contract is terminated because of fundamental breach of contract by the contractor, the amount to be recovered from the contractor representing the employer’s additional costs for completing the contract shall be provisioned as agreed with the Bank in model bidding documents. When other national procurement arrangements (other than national open competitive procurement – e.g. procurement of NGO for IEC activities)) are applied by the Borrower, such arrangements shall be subject to paragraph 5.5 of the Procurement Regulations. Domestic preference as specified under paragraph 5.51 of the Procurement Regulations (Goods and Works): • Goods: is applicable for those contracts identified in the Procurement Plan tables. • Works: is applicable for those contracts identified in the Procurement Plan tables. 55 Annex-I Bidding Modality Discussion for the Upgradation of Kathmandu- Nagdhunga-Naubise-Mungling Road Among the Representatives of FCAN (contractors), Consulting Firms, DOR and the Bank 19 July 2019 1 MahadevKhimtiNirmanSewaPvt. Ltd. Mr. Rabi Singh 2 Kalika Construction Pvt. Ltd. Mr. Nicolas Pandey Mr.Bishnu Prasad 3 Lumbini Builders Pvt. Ltd. Sharma 4 P.S. Construction Company Pvt. Ltd. Mr.AngDorje Lama 5 Nepal Adarsha Nirman Company Pvt. Ltd. Mr.Birendra Raj Pandey 6 Ashish Nirman SewaPvt. Ltd. Mr.NirmanGauli Mr.Sushil Kumar 7 Kumar Shrestha Construction Pvt. Ltd. Shrestha Mr.Dhirendra Kumar 8 Rautaha Construction Pvt. Ltd. Dahal 9 Khadka Krishna Construction Pvt. Ltd. Mr.RatnaBahadurKhadka 10 R.D. Nirman Company Mr.RoshanDahal 56 11 Bandan Bhagwati NirwanSewa Mr. Ram Ji Pant(Mukesh) 12 K.S. Construction Pvt. Ltd. Mr.Bheem Pal Department of Road, Quality Investigation 13 Development Board Mr. Shiva Prasad Nepal 14 Department of Road Mr. Shiva Raj Adhikari 15 Fulbright Consultancy Mr.Pawan Man Shrestha 16 ICT/FBC Mr.Rohit Malik 17 DCID, Department of Roads Mr.TrilokNathGhimire 18 DCID, Department of Roads Mr.ChhabiLalPaudel 19 DCID, Department of Roads Mr.Prem Prakash Khatri 20 Department of Roads Mr.Rupak Raj Bhandari 21 Department of Roads Mr.Rohit Kumar Bisural 22 Department of Roads Mr. Arjun Jung Thapa 23 World Bank Mr. Sri Kumar Tadimalla 24 World Bank Mr. Kamal Pande 25 World Bank Mr. Ramesh Raj Bista Interactive session on a new contracting structure for improvement/upgradation and Operation & Maintenance (O&M) of roads Among Representatives of Commercial banks, Contractors, DOR/ GoN Agencies and the Bank 23 August2019, World Bank Office SN Name of the o. Organization Contact Person 1 Nabil Bank Ltd. Mr. Mohan Raj Joshi, Manager Infrastructure 2 Global IME Bank Ltd. Mr.AshimKarmacharya (Deputy Manager) 3 Global IME Bank Ltd. Mr. Harish Bohara (Assistant Manager) 57 4 NMB Bank Ltd. Ms.Pranisha Shrestha, Head Corporate Nepal Infrastructure Mr. Surya BahadurTamang, Deputy General Manager, 5 Bank Ltd. Business Nepal Infrastructure Mr. Ashish Dhakal, Officer, Project identification, appraisal 6 Bank Ltd. and development) Nepal Infrastructure 7 Bank Ltd. Mr.Saurav Tiwari (Senior Officer- Infrastructure Financing) Standard Chartered Mr.GorakhRana, Head of Global Banking & Commercial 8 Bank Nepal Banking 9 Sanima Bank Ltd. Mr.Nischal Raj Pandey, Chief Risk Officer 10 Sunrise Bank Ltd Mr.BinodGajurel, Project Finance Department 11 Vrock& Company Mr.Ajaya Kumar Shrestha, Partner 12 Department of Roads Mr. Arjun Jung Thapa 13 Department of Roads Mr.Rupak Raj Bhandari 14 Department of Roads Mr.ChabbiLalPaudyal 15 Department of Roads Mr.Prem Khatri 16 Department of Roads Mr.TrilokGhimire 17 Department of Roads Mr.Dron Pun 18 Department of Roads Ms. Rama Shrestha 19 World Bank Mr. Sri Kumar Tadimalla 20 World Bank Mr. Deepak Man Singh Shrestha 21 Mr.DhrubaRegmi 22 World Bank Mr. Vishnu Shrestha 23 World Bank Mr. Ramesh Raj Bista 24 World Bank Ms.ShubuThapa 25 World Bank Ms.Suvekshya Bhandari Subedi Nepal: Proposed Strategic Road Connectivity and Trade Improvement Project (SRCTIP) New Contracting Approach Among Representatives of Contractors, Commercial Banks, DOR and the Bank 2 December 2019, World Bank Office SN o. Name of the Organization Contact Person 1 Hazama And Corp Mr. D. P. Bashyal 2 Hazama And Corp Ms. Jeena Munankarmi 3 Hazama And Corp Mr. Mrigendra Raj Kfale 58 4 Hazama And Corp Mr. M. Ohya 5 Nabil Bank Ltd. Mr. Pushkar Raj Bhattarai 6 Agricultural Development Bank Ltd. Mr. Arun Sigdel 7 Agricultural Development Bank Ltd. Mr. Min Raj Pokharel 8 Nepal Bank Ltd. Mr. Arjun Bahadur Karki 9 Nepal Bank Ltd. Mr. Pradeep K. Pathak 10 Sanima Bank Mr. Saroj Guragain 11 Nepal Adarsha Nirman Sewa Pvt. Ltd. Ms. Jypti Subedi 12 Nepal Adarsha Nirman Sewa Pvt. Ltd. Mr. Mahesh Kumar Thapaliya 13 Nepal Adarsha Nirman Sewa Pvt. Ltd. Mr. Birendra Kumar Pandey 14 Sunrise Bank Mr. Binod Gajurel 15 Lama Construction Pvt. Ltd. Mr. Pitamber Badu 16 Standard Chartered Bank Mr. Gorakh Rana 17 Tundi Construction Pvt. Ltd. Mr. Suman Subedi 18 Sharma and Company Pvt. Ltd. Mr. Ramesh Sharma 19 Department of Roads Mr. Shiva Raj Adhikari 20 Department of Roads Mr. Hari ram Acharya 21 Department of Roads Mr. Chhabi Lal Paudel 22 Department of Roads Mr. Mukti Gautam 23 Department of Roads Mr. Saroj Kumar Pradhan 24 Department of Roads Mr. Arjun Bahadur Karki 25 Department of Roads Mr. Prem Prakash Khatri 26 Department of Roads Mr. Trilok Nath Ghimire 28 Ministry of Physical Infrastructure and Transport Mr. Ajay Kumar Mull 29 GIBL Mr. Ashim Karmacharya 30 Nepal infrastructure Bank Ltd. Mr. Surya Tamang 31 FCAN Mr. Rabi Singh 32 Rastriya Banijya Bank Ltd. Mr. Devendra Khanal 33 World Bank Mr. Sri Kumar Tadimalla 34 World Bank Mr. Shambhu Prasad Uprety Mr. Deepak Man Singh 35 World Bank Shrestha 36 World Bank Ms. Shubu Thapa 37 World Bank Mr. Ramesh Raj Bista 38 World Bank Mr. Bibash Shrestha 39 World Bank Mr. Kamal Pande 40 World Bank Mr. Chandra Kishor Mishra 41 World Bank Ms. Sunita Yadav 42 World Bank Mr. Vikash Sharda 43 World Bank Ms. Suvekshya Bhandari 59 PROCUREMENT Nepal : Nepal Strategic Road Connectivity and Trade Improvement Project PLAN General Information Country: Nepal 2020-04-24 Bank’s Approval Date of the Original Procurement Plan: 2025-03-10 Revised Plan Date(s): (comma delineated, leave blank if none) Project ID: P170409 GPN Date: 2020-06-01 Project Name: Nepal Strategic Road Connectivity and Trade Improvement Project Loan / Credit No: / , IDA / 66730 Ministry of Industry, Commerce and Supplies Executing Agency(ies): WORKS Activity Reference No. / Estimated Actual Am Bid Evaluation Report Loan / Credit N Market Approac Procurement Pro Prequalification High SEA/SH R Procurement D Process St Draft Pre-qualification Prequalification Evalu Draft Bidding Docum Specific Procurement Bidding Documents a Proposal Submission / Contract Complet Description Component Review Type Method Amount (U ount (US$ and Recommendation Signed Contract o. h cess (Y/N) isk ocument Type atus Documents ation Report ent / Justification Notice / Invitation s Issued Opening / Minutes ion S$) ) for Award Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned National Procure SRCTIP/PCU/DOLS/W/NCB-2- ment Document - Single Stage - One E Pending Imp 2023-12-0 2078/79 / Construction of Hol IDA / 66730 Trade Facilitation Post Request for Bids Open - National 1 Envelope proce 125,000.00 0.00 2022-04-01 2022-04-06 2022-05-18 2022-06-17 2022-07-22 nvelope lementation 4 ding Yard at Nepalganj quara ss (Non Bank-SPD ntine checkpost ) SRCTIP/PCU/DOLS/W/ SHOPP Request for Quota ING-01/2078/79 / Laboratory Request for Quota Single Stage - One E Pending Imp 2022-05-1 IDA / 66730 Trade Facilitation Post Limited tions (Non Bank-S 5,000.00 0.00 2021-12-06 2022-01-31 Refurbishment of Krishnanag tions nvelope lementation 1 PD) ar quarantine checkpost SRCTIP/PCU/DOLS/W/SHOPPI Request for Quota NG-02/2078/79 / Laboratory Request for Quota Single Stage - One E Pending Imp 2022-05-0 IDA / 66730 Trade Facilitation Post Limited tions (Non Bank-S 5,000.00 0.00 2021-12-01 2022-01-26 Refurbishment of Bhadrapur tions nvelope lementation 6 PD) Quarantine checkpost SRCTIP/PCU/DOLS/W/SHOPPI Request for Quota NG-03/2078/79 / Laboratory Request for Quota Single Stage - One E Pending Imp 2022-05-1 IDA / 66730 Trade Facilitation Post Limited tions (Non Bank-S 6,000.00 0.00 2021-12-06 2022-01-31 Refurbishment of Bhairahaw tions nvelope lementation 1 PD) a Quarantine checkpost SRCTIP/PCO/PQPMC/W/RFQ- Request for Quota Single Stage - One E Other (with field f Pending Imp 2022-12-2 IDA / 66730 Trade Facilitation Post Limited 4,165.00 0.00 2022-05-03 2022-06-28 1 / Lab refurbishment at Birat tions nvelope or explanation) lementation 5 nagar National Procure SRCTIP/PCO/PQPMC/W/RFB-1 ment Document - Single Stage - Two E Under Imple 2024-07-0 / Construction of SPS Laborat IDA / 66730 Trade Facilitation Post Request for Bids Open - National 2 Envelope proce 251,251.00 0.00 2022-12-09 2022-12-14 2022-12-16 2023-01-13 2023-01-17 2023-01-17 2023-02-22 2023-04-05 nvelope mentation 8 ory building cum Office in Ka ss (Non Bank-SPD karbhitta ) National Procure SRCTIP/PCU/DOLS/W/NCB-03 ment Document - -2078/79 / Construction of Ho Single Stage - One E 2023-12-0 IDA / 66730 Trade Facilitation Post Request for Bids Open - National 1 Envelope proce 125,000.00 0.00 Canceled 2022-04-01 2022-04-06 2022-05-18 2022-06-17 2022-07-22 lding Yard and office building nvelope 4 ss (Non Bank-SPD at Biratnagar Qurantine ) National Procure SRCTIP/PCU/DOLS/W/NCB-01 ment Document - Single Stage - One E 2023-12-0 /078/79 / Construction of Hol IDA / 66730 Trade Facilitation Post Request for Bids Open - National 1 Envelope proce 165,000.00 0.00 Canceled 2022-04-01 2022-04-06 2022-05-18 2022-06-17 2022-07-22 nvelope 4 ding Yard at Matiarwa quaran ss (Non Bank-SPD tine check Post ) SRCTIP/PCO/DOLS/W/NCB-01 National Procure /2079/80 / Construction of An ment Document - Single Stage - Two E Under Imple 2024-12-0 imal Holding Yards for the De IDA / 66730 Trade Facilitation Post Request for Bids Open - National 1 Envelope proce 550,300.00 0.00 2023-02-17 2023-03-21 2023-02-22 2023-03-26 2023-05-02 2023-06-06 nvelope mentation 7 partment of Livestock Servic ss (Non Bank-SPD es at Motiarhawa (Bara) ) SRCTIP/PQPMC/W/RFQ-01/20 Request for Quota 79/80 / Minor Repair and mai Request for Quota Single Stage - One E Pending Imp 2023-07-1 IDA / 66730 Trade Facilitation Post Limited tions (Non Bank-S 3,900.00 0.00 2023-06-29 2023-07-16 ntenance works of the Fumig tions nvelope lementation 9 PD) ation Facility at Kritipur, Kath mandu SRCTIP/NITDB/W/NCB-01/20 81-82 / Construction of ware Single Stage - Two E Other (with field f Under Imple 2026-09-1 IDA / 66730 Trade Facilitation Post Request for Bids Open - National 4,962,700.00 0.00 2024-11-22 2025-02-03 2024-11-27 2025-01-01 2025-02-03 2025-02-21 2025-03-21 house, parking yard and othe nvelope or explanation) mentation 2 r ancillary facilities in Birgunj ICP SRCTIP/NITDB/W/NCB-02/20 81-82 / Construction of ware Single Stage - Two E Other (with field f Under Imple 2026-09-2 IDA / 66730 Trade Facilitation Post Request for Bids Open - National 4,962,700.00 0.00 2024-12-06 2025-02-11 2024-12-11 2025-01-15 2025-03-07 2025-04-04 house, parking yard and othe nvelope or explanation) mentation 6 r ancillary facilities in Biratna gar ICP SRCTIP/DOLS/W/RFQ-01/208 Request for Quota 1-82 / Animal quarantine che Request for Quota Single Stage - One E Under Imple 2025-06-1 IDA / 66730 Trade Facilitation Post Open - National tions (Non Bank-S 10,900.00 0.00 2025-02-02 2025-03-20 ckpost Kakadvitta old laborat tions nvelope mentation 8 PD) ory building refurbishment. SRCTIP/DOLS/W/RFQ-02/208 Request for Quota 1-82 / Repair and refurbishm Request for Quota Single Stage - One E Pending Imp 2025-06-1 IDA / 66730 Trade Facilitation Post Open - National tions (Non Bank-S 10,900.00 0.00 2025-02-02 2025-03-19 ent of animal holding yard of tions nvelope lementation 7 PD) animal quarantine checkpost Jamunaha, Banke. SRCTIP/DOLS/W/RFQ-03/208 Request for Quota 1-82 / Repair and refurbishm Request for Quota Single Stage - One E Pending Imp 2025-06-1 IDA / 66730 Trade Facilitation Post Limited - National tions (Non Bank-S 7,300.00 0.00 2025-02-05 2025-03-19 ent of laboratory in animal q tions nvelope lementation 7 PD) uarantine checkpost Jamuna ha, Banke SRCTIP/DOLS/W/RFQ-04/208 1-82 / Construction of Biologi Request for Quota Request for Quota Single Stage - One E Pending Imp 2025-06-1 cal pit in animal holding yard IDA / 66730 Trade Facilitation Post Limited - National tions (Non Bank-S 5,100.00 0.00 2025-02-03 2025-03-17 tions nvelope lementation 5 of animal quarantine checkp PD) ost Jamunaha, Banke and Gul ariya, Bardiya. SRCTIP/DOLS/W/RFQ-05/208 Request for Quota Request for Quota Single Stage - One E Pending Imp 2025-07-1 1-82 / Remodelling of the lab IDA / 66730 Trade Facilitation Post Open - National tions (Non Bank-S 11,000.00 0.00 2025-03-02 2025-04-18 tions nvelope lementation 7 oratory of Hariharbhawan, La PD) litpur. GOODS Activity Reference No. / Bid Evaluation Report Loan / Credit N Market Approac Procurement Pro Prequalification Estimated Am Actual Amount Process St Draft Pre-qualification Prequalification Evalu Draft Bidding Docum Specific Procurement Bidding Documents a Proposal Submission / Description Component Review Type Method and Recommendation Signed Contract Contract Completion o. h cess (Y/N) ount (US$) (US$) atus Documents ation Report ent / Justification Notice / Invitation s Issued Opening / Minutes for Award Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual SRCTIP/PCU/DOLS/G/SHOPPI Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 9,000.00 0.00 2021-12-01 2022-01-26 2022-03-12 NG-01/2078/79 / Procuremen tions nvelope ementation t of Labtops Page 1 SRCTIP/PCU/DOLS/G/SHOPPI Request for Quota Single Stage - One E Pending Impl NG-02/2078/79 / Procuremen IDA / 66730 Trade Facilitation Post Limited 4,200.00 0.00 2021-12-01 2022-01-26 2022-03-12 tions nvelope ementation t of Airconditioners SRCTIP/PCU/DOLS/G/SHOPPI Request for Quota Single Stage - One E Pending Impl NG-03/2078/79 / Procuremen IDA / 66730 Trade Facilitation Post Limited 4,300.00 0.00 2021-12-05 2022-01-30 2022-03-16 tions nvelope ementation t Rapid Test kits SRCTIP/PCO/PQPMC/G/RFQ-1 Request for Quota Single Stage - One E Pending Impl / Lab equipment for Quaranti IDA / 66730 Trade Facilitation Post Limited 6,700.00 0.00 2022-05-14 2022-07-09 2023-01-05 tions nvelope ementation ne office, Biratnagar and Birj ung SRCTIP/PCO/PQPMC/G/RFQ-2 Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 3,750.00 0.00 2022-05-14 2022-07-09 2023-01-05 / Printer and Laptop for PQPM tions nvelope ementation C SRCTIP/PCO/DFTQC/G/NCB-3 Request for Quota Single Stage - One E Pending Impl / Supply, Installation & Opera IDA / 66730 Trade Facilitation Post Limited 15,450.00 0.00 2022-06-11 2022-07-19 2022-08-18 tions nvelope ementation tion of Cold Storage at Kath mandu Office SRCTIP/PCO/DFTQC/G/RFQ-4 / Supply and Installation of w Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 16,555.00 0.00 2022-06-11 2022-07-07 2023-01-03 ater treatment plant with dei tions nvelope ementation onization unit to Kathmandu SRCTIP/PCO/DFTQC/G/RFQ-5 / Supply and Installation of w Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 12,100.00 0.00 2022-06-11 2022-07-07 2023-01-03 ater treatment plant with dei tions nvelope ementation onization unit to Bhairahawa SRCTIP/PCO/DFTQC/G/RFQ-6 / Supply and Installation of w Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 10,150.00 0.00 2022-06-11 2022-07-07 2023-01-03 ater treatment plant with dei tions nvelope ementation onization unit to Biratnagar SRCTIP/PCO/PQPMC/G/RFQ-3 / Procurement of Laptop ,mul Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 4,375.00 0.00 2022-09-04 2022-10-30 2022-11-05 tifunction networking printer tions nvelope ementation and Desktop Computer SRCTIP/PCO/G/RFQ-1/2079/8 Request for Quota Single Stage - One E Under Imple IDA / 66730 Trade Facilitation Post Limited 3,900.00 0.00 2023-02-19 2022-12-14 2023-03-17 2023-03-27 0 / Laptop and Desktop for P tions nvelope mentation CO SRCTIP/PCO/DFTQC/G/NCB-1 Single Stage - One E Under Imple / Procurement of Laboratory IDA / 66730 Trade Facilitation Post Request for Bids Open - National 152,000.00 0.00 2022-06-06 2023-04-21 2022-06-11 2022-07-16 2022-07-17 2022-08-07 2022-11-05 nvelope mentation Equipment for DFTQC. SRCTIP/DFTQC/G/RFQ-01/20 79/80 / Procurement of Lapto Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 5,100.00 0.00 2023-06-30 2023-08-06 2023-08-12 p, multifunction networking p tions nvelope ementation rinter and Desktop Computer . SRCTIP/DOLS/G/RFQ-01/207 9/80 / Procurement of Laptop Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 2,250.00 0.00 2023-06-29 2023-07-10 2023-07-12 , multifunction networking pri tions nvelope ementation nter and Desktop Computer. SRCTIP/PQPMC/RFQ-01/2080 Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 7,520.00 0.00 2024-02-10 2024-03-12 2024-03-19 /81 / Interactive Display Boar tions nvelope ementation d SRCTIP/PQPMC/RFQ-02/2080 Request for Quota Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Limited 3,800.00 0.00 2024-02-10 2024-03-12 2024-03-19 /81 / Insect Showcase Cabine tions nvelope ementation t SRCTIP/DFTQC/G/NCB-02/20 Single Stage - One E Under Imple IDA / 66730 Trade Facilitation Post Request for Bids Open - National 36,000.00 0.00 2024-06-11 2024-06-13 2024-06-16 2024-06-18 2024-07-21 2024-07-16 2024-08-10 2024-09-13 2025-03-12 80-81 / Server Equipments fo nvelope mentation r LIMS SRCTIP/DOC/G/NCB-01/2080 Single Stage - Two E Pending Impl -81 / Procurement of Laborat IDA / 66730 Trade Facilitation Prior Request for Bids Open - National 1,893,700.00 0.00 2024-07-05 2024-07-08 2024-08-08 2024-09-11 2024-10-02 2025-07-04 nvelope ementation ory Equipment for DoC. SRCTIP/DOLS/G/NBC-01/208 Single Stage - One E Under Imple 1-82 / Procurement of Lab eq IDA / 66730 Trade Facilitation Post Request for Bids Open - National 149,300.00 0.00 2024-12-27 2025-02-04 2024-12-30 2025-02-03 2025-03-05 2025-04-09 2025-08-07 nvelope mentation uipments (AAS & HPLC) for D OLS. SRCTIP/PQPMC/G/RFQ-01/20 Request for Quota Single Stage - One E Pending Impl 81-82 / Procurement of Lapto IDA / 66730 Trade Facilitation Post Limited - National 12,000.00 0.00 2025-01-27 2025-03-04 2025-05-03 tions nvelope ementation p, Desktop, Color Printer and CCTV Camera. SRCTIP/DOLS/G/RFQ-01/208 1-82 / Procurement of an ELI Request for Quota Single Stage - One E Pending Impl SA test kit for vaccines & anti IDA / 66730 Trade Facilitation Post Limited - National 22,400.00 0.00 2025-01-31 2025-03-12 2025-06-10 tions nvelope ementation biotic residue testing, Pharm acopeias and reference stan dards for drug testing. SRCTIP/DFTQC/G/RFQ-01/20 Request for Quota Single Stage - One E Pending Impl 81-82 / Procurement of 3 pha IDA / 66730 Trade Facilitation Post Limited - National 6,450.00 0.00 2025-02-17 2025-03-18 2025-04-17 tions nvelope ementation se UPS - 10KVA & accessorie s SRCTIP/DOLS/G/NCB-02/208 Single Stage - One E Pending Impl IDA / 66730 Trade Facilitation Post Request for Bids Open - National 36,300.00 0.00 2025-02-27 2025-03-04 2025-04-08 2025-04-15 2025-05-06 2025-09-03 1-82 / Procurement of variou nvelope ementation s test kits. NON CONSULTING SERVICES Activity Reference No. / Bid Evaluation Report Loan / Credit N Market Approac Procurement Pro Prequalification Estimated Am Actual Amount Process St Draft Pre-qualification Prequalification Evalu Draft Bidding Docum Specific Procurement Bidding Documents a Proposal Submission / Description Component Review Type Method and Recommendation Signed Contract Contract Completion o. h cess (Y/N) ount (US$) (US$) atus Documents ation Report ent / Justification Notice / Invitation s Issued Opening / Minutes for Award Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual SRCTIP/PCU/NITDB/NCS/02/2 078/79 / Survey and Geo tec Request for Quota Single Stage - One E Under Imple IDA / 66730 Trade Facilitation Post Limited 16,950.00 0.00 2022-02-28 2022-04-25 2022-10-22 hnical Investigation of Parkin tions nvelope mentation g Area for Bhairahawa ICD CONSULTING FIRMS Activity Reference No. / Combined Evaluation Loan / Credit N Market Approac Contract Type Estimated Amo Actual Amount Expression of Interest Short List and Draft R Request for Proposals Opening of Technical Evaluation of Technic Description Component Review Type Method Process Status Terms of Reference Report and Draft Neg Signed Contract Contract Completion o. h unt (US$) (US$) Notice equest for Proposals as Issued Proposals / Minutes al Proposal otiated Contract Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Page 2 SRCTIP/PCU/NITDB/CS/QCBS- 077/078 / Hiring of Consultin g Firm for Preparation of DPR and Supervision for Truck p Quality And Cost- / Trade Facilitation Prior Open - National 1,000,000.00 0.00 Signed 2020-06-01 2021-04-29 2020-07-23 2021-06-06 2020-10-07 2023-01-17 2020-11-04 2022-09-29 2020-12-04 2023-01-25 2021-01-08 2023-02-27 2021-02-12 2023-03-20 2025-02-08 arking Yard,Inspsection Shed Based Selection , Godown (Warehouse), Cont ainer Parking yard and impro vement link road from 2 lane to four lane in Biratnagar and Birganj . SRCTIP/PCO/DFTQC/CS/LIMS/ Consultant Qualifi Under Implement IDA / 66730 Trade Facilitation Post Limited 23,000.00 0.00 2023-05-10 2023-05-04 2023-06-09 2023-07-09 2023-08-13 2023-10-12 079-80 / LIMS For DFTQC cation Selection ation INDIVIDUAL CONSULTANTS Activity Reference No. / Loan / Credit N Market Approac Contract Type Estimated Amo Actual Amount Invitation to Identifie Draft Negotiated Cont Description Component Review Type Method Process Status Terms of Reference Signed Contract Contract Completion o. h unt (US$) (US$) d/Selected Consultant ract Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual SRCTIP/PCU/NITDB/CS/IC-07 7/078 / Procurement of Gantr Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Open 50,000.00 0.00 2021-01-24 2021-01-29 2021-03-23 2021-07-06 2021-04-13 2021-05-18 2021-11-14 y Crane Specialist (Internatio ant Selection ation nal ) for design and supervisi on Gantry Crane. SRCTIP/PCU/PQPMC/CS/D-07 8/79 / Procurement of Consul ting Service to carry out Deta Under Implement iled Design of Office Cum Lab IDA / 66730 Trade Facilitation Post Direct Selection Direct 5,009.00 0.00 2021-11-01 2022-03-25 2021-11-11 2022-01-15 2022-07-14 ation oratory Building For Plant Qu arantine and Pesticide Manag ement Centre(PQPMC) at Kak arbhitta, Jhapa SRCTIP/PCU/DOLS/CS/D-078/ 79 / Procurement of Consulti ng Service to carry out Detail Under Implement ed Design of Animal Holding IDA / 66730 Trade Facilitation Post Direct Selection Direct 12,000.00 0.00 2021-11-01 2022-03-25 2021-11-11 2022-01-15 2022-07-14 ation Yards for Department of Live stock Services at Biratnagar ( Morang), Motiarhawa (Bara) and Piparhawa Nepalgung (B anke) SRCTIP/PCO/CS/IND-01/2078 Individual Consult /79 / Hiring of procurement a IDA / 66730 Trade Facilitation Prior Open 55,000.00 0.00 Canceled 2022-02-20 2022-03-09 2022-04-16 2022-04-20 2022-05-08 2025-02-04 ant Selection nd contract management spe cialist for PCO SRCTIP/PCO/CS/IND-02/2078 Individual Consult Under Implement /79 / Hiring environment safe IDA / 66730 Trade Facilitation Post Open 55,000.00 0.00 2022-02-20 2022-03-06 2022-04-21 2022-04-26 2022-05-14 2025-02-19 ant Selection ation guard specialist for PCO SRCTIP/PCO/CS/IND-03/2078 Individual Consult Under Implement /79 / Hiring of Social Develop IDA / 66730 Trade Facilitation Post Open 55,000.00 0.00 2022-02-20 2022-03-06 2022-04-16 2022-04-21 2022-05-09 2025-02-19 ant Selection ation ment Specialist SRCTIP/PCO/CS/IND-04/2078 Individual Consult /79 / Hiring of occupational H IDA / 66730 Trade Facilitation Post Open 55,000.00 0.00 Canceled 2022-02-20 2022-03-06 2022-04-16 2022-04-21 2022-05-09 2025-02-19 ant Selection ealth and safety specialist for PCO SRCTIP/PCO/CS/IND-05/2078 Individual Consult Under Implement /79 / Hiring of Trade Develop IDA / 66730 Trade Facilitation Post Open 55,000.00 0.00 2022-02-20 2022-03-06 2022-04-16 2022-04-21 2022-05-09 2025-02-19 ant Selection ation ment Advisor SRCTIP-NITDB-BHW-INDV- C Individual Consult Under Implement S -01-2078/79 / Pavement De IDA / 66730 Trade Facilitation Post Limited 4,250.00 0.00 2022-02-23 2022-03-06 2022-02-28 2022-03-07 2022-03-28 2022-06-11 ant Selection ation sign for Parking Area next to Bhairahawa ICD SRCTIP/PCO/DFTQC/CS/IND-1 / Consulting Services to prep are the details technical spec Individual Consult Pending Impleme IDA / 66730 Trade Facilitation Post Limited 2,710.00 0.00 2022-06-06 2022-06-13 2022-06-20 2022-07-02 2022-09-30 ification and cost estimation ant Selection ntation of the Laboratory Information Management System (LIMS) SRCTIP/PCO/CS/IND-06 / Hiri Individual Consult Under Implement ng of Procurement and Contr IDA / 66730 Trade Facilitation Prior Open - National 55,000.00 0.00 2022-07-26 2022-07-26 2022-08-18 2022-09-04 2022-08-23 2022-09-15 2022-08-31 2025-07-15 ant Selection ation act Management Specialist SRCTIP/PQPMC/CS/IND-01/20 79/80 / Supervision Consulta Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Limited 4,660.00 0.00 2023-01-20 2023-01-23 2023-01-27 2023-02-03 2023-02-23 2024-08-26 nt for building SPS cum office ant Selection ation building of Jhapa - PQPMC SRCTIP/PCO/DOC/CS/IND-01 / Consulting Services for asse ssing requirements and finali Individual Consult zing the List of Equipment, S IDA / 66730 Trade Facilitation Post Limited 5,420.00 0.00 Canceled 2023-02-03 2023-02-18 2023-02-08 2023-03-01 2023-04-05 2024-04-04 ant Selection pecification, Cost Estimate, a nd commissioning support fo r the Customs laboratories of Nepal SRCTIP/PQPMC/CS/IND-02/20 79/80 / Environment Toxicolo Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Direct - National 2,600.00 0.00 2023-06-04 2023-06-13 2023-06-08 2023-06-11 2023-06-21 2023-07-06 gist to perform Initial Environ ant Selection ation ment Examination SRCTIP/PQPMC/CS/IND-03/20 Individual Consult Under Implement 79/80 / Fumigation Technicia IDA / 66730 Trade Facilitation Post Direct - National 1,320.00 0.00 2023-06-04 2023-06-13 2023-06-09 2023-06-16 2023-06-26 2023-07-26 ant Selection ation n to support the Fumigation Facility. SRCTIP/DFTQC/CS/IND-01/20 Individual Consult 79/80 / Individual Consultant IDA / 66730 Trade Facilitation Post Limited 3,805.00 0.00 Canceled 2023-06-23 2023-06-22 2023-06-25 2023-06-27 2023-07-07 2023-07-27 ant Selection Laboratory Refurbishment Ex pert. SRCTIP/DFTQC/CS/IND-02/20 Individual Consult 79/80 / Individual Consultant IDA / 66730 Trade Facilitation Post Limited 3,515.00 0.00 Canceled 2023-06-23 2023-06-22 2023-06-25 2023-06-27 2023-07-07 2023-07-27 ant Selection Mechanical Engineer (MEP Ex pert) SRCTIP/DFTQC/CS/IND-03/20 Individual Consult 79/80 / Individual Consultant IDA / 66730 Trade Facilitation Post Limited 3,440.00 0.00 Canceled 2023-06-23 2023-06-22 2023-06-25 2023-06-27 2023-07-07 2023-07-27 ant Selection CIVIL ENGINEER. SRCTIP/DFTQC/CS/IND-01/20 Individual Consult Under Implement 80/81 / Individual Consultant IDA / 66730 Trade Facilitation Post Limited 6,200.00 0.00 2023-09-19 2023-09-21 2023-09-24 2023-10-15 2023-11-08 2024-02-21 ant Selection ation - Laboratory Refurbishment E xpert Page 3 SRCTIP/DFTQC/CS/IND-02/20 Individual Consult Under Implement 80/81 / Individual Consultant IDA / 66730 Trade Facilitation Post Limited 5,100.00 0.00 2023-09-19 2023-09-21 2023-09-24 2023-10-15 2023-11-08 2024-02-21 ant Selection ation - Mechanical Engineer (MEP E xpert) SRCTIP/DFTQC/CS/IND-03/20 Individual Consult Under Implement 80/81 / Individual Consultant IDA / 66730 Trade Facilitation Post Limited 5,100.00 0.00 2023-09-19 2023-09-21 2023-09-24 2023-10-15 2023-11-08 2024-02-21 ant Selection ation - Civil Engineer SRCTIP/DOC/CS/IND-01/2080 Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Open - National 6,100.00 0.00 2023-09-19 2023-09-24 2023-10-31 2023-11-03 2023-11-22 2024-11-21 -18 / Lab Equipment Speciali ant Selection ation st SRCTIP/DOLS/CS/IND-01/208 Individual Consult Under Implement 0-81 / Supervision Consultant IDA / 66730 Trade Facilitation Post Limited 6,200.00 0.00 2023-09-19 2023-09-24 2023-09-26 2023-10-03 2023-10-23 2025-04-25 ant Selection ation (Civil Engineer) SRCTIP/PCO/CS/IND-01/2080 -81 / Study of Nepal-China Tr Individual Consult Under Implement ade and Payment Agreement IDA / 66730 Trade Facilitation Post Limited 3,280.00 0.00 2023-10-10 2023-10-12 2023-10-13 2023-10-27 2023-11-03 2023-11-01 2023-11-20 2024-01-09 ant Selection ation , 1981 and other relevant Ne pal-China trade agreements SRCTIP/PCO/CS/IND-02/2080 Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Limited 7,000.00 0.00 2024-02-08 2024-02-05 2024-02-13 2024-02-27 2024-03-15 2026-01-31 -81 / Environmental Safeguar ant Selection ation ds Expert SRCTIP/PCO/DFTQC/CS/LIMS/ 080-81 / Consultancy firm for Under Implement the upgrading of Web-enable IDA / 66730 Trade Facilitation Post Direct Selection Direct - National 22,800.00 0.00 2024-03-15 2024-03-15 2024-03-19 2024-04-12 2024-07-16 ation d Laboratory Information Ma nagement System (LIMS) - II phase. SRCTIP/PQPMC/CS/IND-01/20 Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Limited - National 4,620.00 0.00 2024-04-19 2024-04-24 2024-04-21 2024-04-26 2024-05-05 2024-06-19 80-81 / Plant Protection Expe ant Selection ation rt - I SRCTIP/PQPMC/CS/IND-02/20 Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Limited - National 3,500.00 0.00 2024-04-19 2024-04-24 2024-04-21 2024-04-26 2024-05-05 2024-06-09 80-81 / Plant Pathologist Exp ant Selection ation ert SRCTIP/PQPMC/CS/IND-03/20 Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Limited - National 1,200.00 0.00 2024-04-19 2024-04-24 2024-04-21 2024-04-26 2024-05-05 2024-05-15 80-81 / Entomologist ant Selection ation SRCTIP/PQPMC/CS/IND-04/20 Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Limited - National 4,620.00 0.00 2024-04-19 2024-04-24 2024-04-21 2024-04-26 2024-05-05 2024-06-19 80-81 / Plant Protection Expe ant Selection ation rt - II SRCTIP/PQPMC/SC/IND-05/20 Individual Consult Under Implement IDA / 66730 Trade Facilitation Post Limited - National 4,620.00 0.00 2024-04-19 2024-04-24 2024-04-21 2024-04-26 2024-05-05 2024-06-19 80-81 / Plant Protection Expe ant Selection ation rt - III SRCTIP/PQPMC/CS/IND-01/08 Individual Consult Under Implement 1-82 / Plant Pathologist Exper IDA / 66730 Trade Facilitation Post Limited - National 3,650.00 0.00 2024-09-15 2024-09-18 2024-09-18 2024-09-25 2024-10-16 2025-08-12 ant Selection ation t to support SPS Lab. Operati on. SRCTIP/PQPMC/CS/IND-02/08 Individual Consult Under Implement 1-82 / Entomologist Expert to IDA / 66730 Trade Facilitation Post Limited - National 3,650.00 0.00 2024-09-15 2024-09-18 2024-09-18 2024-09-25 2024-10-16 2025-08-12 ant Selection ation support SPS Lab. Operation. Page 4