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| MFF-Facility Concept | MFF - Water Supply and Sanitation Services Investment Program (Facility Concept) | |||
| Country | Uzbekistan, Rep. of | |||
| MFF-Facility Concept Number | OO36 | |||
| Project Number | 42489- 01 | |||
| Fund Source/Amount[Proposed] |
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| Thematic Classification |
Economic growth
Social Development Governance |
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| Project Rationale | Water supply and sanitation (WSS) services in Uzbekistan deteriorated sharply since independence, lack of investment and low quality management are main problems. Despite relatively high nominal network coverage (about 82% of the population), the service is generally available only 3-12 hours a day depending on the area.
The government wants to reform the sector. It has already decentralized most operations in 1993, followed by tariff changes, and the gradual removal of subsidies. It increased the responsibility of local administrations for service provision and customer care. In 2002, the government created conditions for private sector involvement in selected WSS companies. The Poverty Reduction and Welfare Improvement Strategy sees access to safe water and sanitation as a means to improve welfare. The government's intention is to reach 100% coverage in urban areas and 85% in rural areas within the next few years. To achieve this, investment needs are estimated at around US$2 billion. In June 2008, the resolution of the President (#890, 2008) further prioritized investment needs and approved an investment plan with external financing of US$622 million for 20082011, including 6 WSS projects for ADB's financing consideration. A sector roadmap is being finalized by the Government with ADB's assistance. The roadmap states that physical investments alone will not be sufficient to fulfill the Government's vision. It emphasizes the need to improve management practices and policies, including tariff setting, fee collection and maintenance. The sector roadmap emphasizes four main principles: > Contractual Relationshipsensure greater company accountability to stakeholders on service quality and performance, through contract law enforcement. > Performance Targetsneed to be integrated in and enforced through contracts. Key targets include service quality, coverage, operating efficiency and financial performance. > Financial Resourcesneed to be available to utilities to achieve their targets, as long as they use these financial resources efficiently. In other words, the utilities will not be given funds to solve problems by throwing money at them. > Capacity Improvementscorporate structure needs to be improved and staff trained in operations, financing, customer service, and project management. The sector roadmap further recommends operationalizing these principles through the implementation of replicable and scalable management models for WSS services. These models will involve the public sector and private sector. Three proposals are made in connection with this: > Performance Contracts for bulk water These contracts will cover Inter-Regional Trunk Mains (IRTMs). The existing management and staff of IRTMs will be put under a performance contract with clear targets. Achievement of these targets will lead to higher salaries and bonuses. Failure to achieve the targets will lead to financial penalties. > Public Private Partnerships (PPP) Contracts for distribution systemsThe operation of distribution systems will be tendered to national and international private sector entities and existing management. The exact nature of the contracts and accompanying risk allocation for these contracts needs further work. The basic principle is that the operator will be responsible for operations and service provision, since this is where the biggest improvement is needed. Operators will not be responsible for funding capital investments. > BenchmarkingIts purpose is to make performance monitoring of contracts easier. Also, it will make PPP and Performance Contract transactions easier to prepare, and more sustainable. The Government has requested ADB financial assistance of US$300 million to support the sector development. A Multitranche Financing Facility (MFF) is proposed for this purpose. |
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| Impact | The proposed program of investments will improve living standards, the environment, and public health for about 3 million residents. The program will also improve planning, management practices and the policies. It will target assistance to Uzbekistan Communal Services Agency (UCSA), State Committee for De-monopolization and Supporting Competition and Entrepreneurship (SCDM), local governments, and town level vodokanals (water supply companies), focusing on financial, managerial, and technical performance. | |||
| Geographical Location | Uzbekistan | |||
| Summary of Environmental and Social Issues | ||||
| Social Aspects |
Preliminary analysis indicates that some Tranche 1 subprojects may need land acquisition and resettlement (LAR). Due diligence is being carried out on this. A LAR framework is being developed for the MFF program.
Indigenous Peoples (IP) in the program area does not include communities that could be treated as IP under the ADB IP Policy. Gender concerns are related to gender inequality and participation in decision-making. These results will be analyzed and addressed in a gender action plan (GAP). An objective is to have a strong gender mainstreaming concept. |
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| Environmental Aspects | The program is classified as category B according to ADBs Environmental Policy (2002) and Environmental Assessment Guidelines (2003). | |||
| Stakeholder Participation and Consultation | ||||
| During Project Implementation | Customers, government agencies at different levels, vodokanals, local NGOs, program affected persons, and other interested parties will be involved in all stages of program development and implementation. Workshops, focus group interviews and meetings, surveys and special awareness programs will be undertaken to ensure continued improvements in program implementation and its sustainability. | |||
| Procurement | ||||
| Consulting Services | The selection and engagement of consulting services to be financed by ADB will be carried out in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time) and the procurement plan. The following selection methods may be used: (i) Quality and Cost Based Selection (QCBS) method with a full or simplified technical proposal and a 80:20 quality-cost weighting; (ii) consultants' qualifications, for assignments costing less than $200,000 per contract; (iii) least cost selection for small assignments costing less than $100,000, and (iv) individual consultant selection. | |||
| Civil Works/Goods | A procurement plan will be prepared for each ranche of the investment program. All goods and works to be financed by ADB under the facility will be procured according to ADB's Procurement Guidelines (2007, as amended from time to time) and the procurement plan. The procurement plan will be updated, at least yearly, for the next 18 months of procurement activities. International competitive bidding procedures will be used for major civil works contracts costing more than $2,000,000 equivalent and supply contracts worth more than $500,000 equivalent. Civil works valued at $100,000-$2,000,000 and goods valued at $100,000-$500,000 will be procured through national competitive bidding (NCB) according to the NCB annex in the procurement plan, which summarizes modifications or clarifications needed in the Borrower's procedures to enable it to carry out NCB under ADB-financed projects. Shopping procedures will be allowed for works, materils, and equipment packages costing up to $100,000. To increase the contract size and contrctor participation, the procurement of similar equipment and materials, such as water meters, pump machineries, and pipes, will be centralized and equipment and materials will then be distributed by the PPMU to the PIUs for installation. | |||
| Responsible ADB Officer |
Ye Yong |
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| Responsible ADB Department |
Central and West Asia Department |
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| Responsible ADB Division |
Urban Services Division, CWRD |
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| Executing Agencies |
Uzbekistan Communal Services Agency Mr. Utkur Khalmukhamedov General Director 1, Niyozbek yuli street, Tashkent, Uzbekistan 100035 fmiryusupov@rambler.ru |
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| Timetable | ||||
| Concept Clearance | 19 Jun 2009 | |||
| Fact-finding | 27 May 2009 to 03 Jul 2009 | |||
| Appraisal | 31 Jul 2009 to 14 Aug 2009 | |||
| Board Approval | 29 Sep 2009 | |||
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